Tax Treaty Case Law around the Globe 2018

S. 113Chapter 11 Greece: Attribution of Profits to PE and Limitations of Deductible Expenses under Domestic Law

Katerina Perrou

11.1. Introduction

With its decision number 1290/2017, the Greek Supreme Administrative Court, Chamber B, had the chance to deal with the conflict between domestic rules on the deductibility of head office expenses and the treaty rules on the attribution of profits to PE in the context of the France-Greece Income Tax Treaty (1963) (hereinafter France-Greece double tax convention, DTC).

The case concerned taxable year 2000 and originated from a reservation that the taxpayer had filed at the time of filing the annual tax return. The tax authority did not reply to the reservation; after a 3-month period elapses, a reservation is considered to be silently rejected and the taxpayer can therefore take the case to the Court. Once the reservation was silently rejected, the taxpayer took the case before the Athens Administrative Court of First Instance, which decided in favour of the taxpayer.

The tax authority appealed against the decision of the Administrative Court of First Instance, but the Court of Appeals confirmed the decision of the lower court and rejected the appeal...