Taxation of Cross-Border Dividends in Greece: In Line with EC Law Requirements

Abstract

Using as a motive the infringement procedure of the European Commission against Greece for discriminatory tax treatment of inbound dividends and the subsequent judgment of the ECJ in Case C-406/07, Commission v. Greece, which formed the causa of a radical legislative reform of the Greek regime governing taxation of dividends, the author conducts, in this article, a detailed examination of the Greek dividend tax rules, under the perspective of Community law requirements in this field. In that respect, the author performs an analysis of the extensive case law of the ECJ on dividend taxation, and draws case law principles which, together with the Parent-Subsidiary Directive provisions, constitute the point of reference of the inquiry undertaken. With the example of the Greek dividend tax systems as a tool, the author displays how exemption, imputation and final withholding tax systems are applied in practice and how EC law affects their function and interaction in cases of crossborder dividend distributions.