A Review of Greece’s Draft Pillar Two Law

On February 22, 2024, the Ministry of National Economy and Finance issued a draft law entitled “Incorporation of Council Directive (EU) 2022/2523 of 15 December 2022 providing for a worldwide minimum level of taxation of groups of multinational enterprises and large domestic groups in the European Union (Pillar II) and other customs and tax provisions“.

As provided in the EU Directive, the Law includes an income inclusion rule (IIR) and an under-taxed profits rule (UTPR).

The IIR is to apply to financial years beginning on or after December 31, 2023. The UTPR will generally apply to financial years beginning on or after December 31, 2024.

Article 12 of the Law provides that Greece will apply a domestic minimum top-up tax (intended to be a QDMTT) for financial years beginning on or after December 31, 2023.

In Greece, according to 2022 data, there are 19 Greek business groups and 900 – 950 subsidiaries of foreign groups that exceed the €750 million consolidated turnover threshold for at least 2 of the last 4 years before 2024.

Most aspects of the OECD Administrative Guidance are not reflected in the Draft Law, aside from the Safe Harbours and elements of the QDMTT design.