The Multilateral Convention for the Elimination of Double Taxation has been submitted to the Parliament for ratification


The draft law “Ratification of the Multilateral Convention for the implementation of the measures related to the tax agreements for the prevention of the erosion of the tax base and the shift of profits” was submitted to the Parliament by the Ministry of Finance.

This bill ratifies the Multilateral Convention for the Implementation of Measures Related to Tax Agreements to Prevent Corrosion of the Tax Base and Profit Shift. The Convention was adopted in Paris on November 24, 2016 and was signed by Greece on June 7, 2017.

It provides states with the tools they need to ensure that profits are taxed where the economic activities that produce them take place and where their value is created. Thus, the problem of loss of significant corporate tax revenue due to aggressive international tax planning is addressed, which results in the artificial shift of profits to territories where they are not subject to taxation or are subject to reduced taxation.

At the same time, it is ensured that dispute resolution mechanisms are improved so that the adoption of measures to eliminate cross-border tax evasion opportunities does not lead to uncertainty for taxpayers and unintentional double taxation.

According to the ministry, the goals of the draft law are:

In the short term, the rapid and coordinated amendment of the provisions of the existing tax agreements concluded by Greece, in order to avoid the need for bilateral renegotiation of each such agreement separately, a process that would become time consuming and less efficient. The international tax agreements to which Greece has entered into and which are in force amount to 57.

In the long run, the implementation of the OECD Final Recommendations to combat the erosion of the tax base and the shifting of profits, which are specifically aimed at preventing the circumvention of tax agreements, improving dispute settlement mechanisms related to tax agreements, artificially avoid creating a permanent installation and counteracting the effects of hybrid mismatches. Through the fight against these phenomena, the tax revenues of Greece are secured.

The ministry also points out that the benefits that are expected to result from the provisions are multiple. Including:

* Equal conditions of fair competition are established at international level. This enhances the competitiveness of businesses, leading to benefits for the budget as well.

* Transparency and tax security are enhanced, through the improvement of dispute resolution mechanisms, as well as the improvement in the organization and standardization of the relevant services of the state, which will significantly enhance the efficiency of its services.

* It is planned to contribute to the decongestion of the administrative courts, because issues arising from the implementation of the tax agreements concluded by Greece can be resolved at the level of tax administration through the mechanisms provided for resolving international tax disputes.

* The limitation of the resources that would be spent is achieved, in the absence of a synchronized amendment of provisions through the Multilateral Convention, in order for the bilateral renegotiation of each tax agreement that Greece has concluded and is in force separately.


Source: Zougla.gr by www.zougla.gr.

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