The Supreme Court has delivered two landmark decisions on the highest stamp duty assessments on company loans to have occurred in the Greek market in recent years.
The Court has declared the imposition of stamp duty on interest-bearing loans granted by (non-banking) companies illegal, while reversing its previous case law, which has consistently confirmed the applicability of stamp duty on such loans.
The Court has endorsed the legal argumentation of law firm Zepos & Yannopoulos that the granting of interest-bearing loans by companies engaging in activities within the scope of VAT, constitutes a transaction falling within the scope of VAT (although exempt), which therefore cannot be subject to stamp duty, even if the granting of loans takes place occasionally.
This judgment is based on the currently applicable VAT legislation that explicitly provides that, stamp duty legislation has been abolished with respect to transactions falling within the scope of VAT, including their ancillary agreements.
In this context, the Supreme Court ruled that the provisions imposing stamp duty on interest-bearing loans have been abolished since 1.1.1987, when VAT was introduced in Greece.
These decisions blaze a trail for companies that have paid stamp duty on loans, to validly claim refund, subject to statute of limitation provisions.
The decisions are all the more important, taking into account that in the recent years, Greek tax authorities have been extremely aggressive, assessing very high amounts of stamp duty on all types of financing schemes implemented especially by multinational groups.
The decisions in question should enable companies currently challenging stamp duty assessments before the courts, to ensure the annulment of the assessments, provided that their cases fall within the framework of the Supreme Court’s decisions.