Transactions between associated enterprises – sales of goods, services, loans, licences – must be priced as independent enterprises would have priced them (arm’s length principle, Art. 50 Law 4172/2013). Above certain thresholds, Greek companies must also document these transactions and report them to the tax administration in a Summary Information Table (Art. 25 Law 5104/2024).
We support companies in documenting their related-party transactions, in determining arm’s length prices and in designing intercompany pricing policies that can be defended in a tax audit. Our analyses follow the Greek rules and the OECD Transfer Pricing Guidelines.
Our services
- Documentation: preparation and review of the Greek local file and the Summary Information Table, and support with the group master file
- Functional analysis: functions performed, assets used and risks assumed by each party, as the basis for delineating the controlled transactions
- Benchmarking studies: search for comparable independent companies or transactions and determination of the arm’s length range
- Transfer pricing policies: design and review of intercompany pricing policies, mark-ups, cost allocation keys and intercompany agreements
- Risk reviews: comparison of contracts, actual conduct, accounting records and the documented method before the documentation is due or a tax audit begins
- Tax audits: support in responding to transfer pricing enquiries of the tax administration and assessment of proposed adjustments
- Advance pricing agreements: advice on applications for an advance pricing agreement (APA) to the Governor of AADE
Who we work for
- Greek subsidiaries and branches of international groups
- Greek parent companies with foreign subsidiaries
- groups with related-party transactions within Greece
- groups planning a restructuring or new intercompany arrangements
Why Sigalas & Partners
As certified public accountants we assess transfer pricing together with the financial statements and corporate income tax, so that the documentation is consistent with the accounting records. We work directly in Greek, German and English and coordinate the Greek documentation with the group’s master file and the requirements of the parent company. For transfer pricing questions in an acquisition, see our tax due diligence.
Frequently asked questions
What is the arm's length principle?
Transactions between associated enterprises must be carried out on the terms that independent enterprises would have agreed under comparable circumstances. In Greece the principle is set out in Art. 50 of the Income Tax Code (Law 4172/2013); where the agreed terms deviate from it, the tax administration can adjust the taxable profit.
Which companies must prepare transfer pricing documentation in Greece?
Associated persons within the meaning of the Income Tax Code that enter into intra-group transactions, including Greek permanent establishments of foreign enterprises. Under Art. 25 of the Tax Procedure Code (Law 5104/2024) there is no obligation to keep a documentation file if the intra-group transactions of the tax year do not exceed, in aggregate, EUR 100,000 for companies with turnover up to EUR 5 million or EUR 200,000 for companies with turnover above EUR 5 million. Below these thresholds the pricing must still be at arm's length.
What does the Greek documentation consist of?
The documentation file consists, as applicable, of the master file with information on the group and the Greek local file on the transactions of the Greek company. It is accompanied by the Summary Information Table, which is submitted electronically to the tax administration (AADE).
What are the deadlines for preparing and submitting the transfer pricing documentation?
The documentation file is prepared by the deadline for filing the annual income tax return. The Summary Information Table is submitted electronically to AADE within the same deadline. On request, the documentation file must be made available to the tax administration within 30 days of receipt of the request.
What are the penalties if the documentation file is made available late or not at all?
If the documentation file is made available to the tax administration late, a fine of EUR 5,000 to EUR 20,000 per documentation file is imposed. If it is not made available at all, the fine is EUR 20,000 per documentation file. In this case you also lose the opportunity to present your rationale in adhering to the arm's length principle.
Why should the documentation not be prepared only when a tax audit requests it?
The documentation file is prepared by the deadline for filing the annual income tax return, not only when a tax audit requests it, and the Summary Information Table submitted by that deadline already requires an analysis of the transactions. In addition, prices are easier to correct before the financial year is closed: documentation prepared afterwards can only describe prices that have already been charged, and if these are not at arm's length, the tax administration adjusts the taxable profit.
What is a benchmarking study?
A benchmarking study identifies independent companies or transactions that are comparable to the controlled transaction and derives an arm's length range of prices or margins from them. It supports the chosen method in the documentation and in a tax audit.
Which transfer pricing method is appropriate?
This depends on the transaction, the functions performed, the assets used and the risks assumed by the parties, and on the comparable data available. The OECD Transfer Pricing Guidelines recognise the comparable uncontrolled price (CUP) method, the resale price method, the cost plus method, the transactional net margin method (TNMM) and the profit split method.
Can the transfer pricing method be agreed with the tax administration in advance?
Yes. Under Art. 26 of the Tax Procedure Code (Law 5104/2024), associated persons can submit to the Governor of AADE an application for an advance pricing agreement (APA) on the transfer pricing methodology for specific future cross-border transactions with associated persons. The approval decision is valid for no more than four years; a tax audit is then limited to verifying that the terms of the decision have been met.