With two important decisions of the Council of State (2163/2020 and 2323/2020) was held that the imposition of stamp duties on simple interest-bearing loans granted by a VAT taxable entity was deemed illegal as of 01-01-1987.
However, despite the existence of the relevant case law of the Council of the State, the Tax Authority had not issued a Circular providing instructions to the taxpayers and the tax auditors on how to deal with that rulings. Consequently, until now, in cases where stamp duty was imposed by a tax audit, the audited companies appealed to the Tax Disputes Resolution Directorate which annulled the charging act, if the relevant conditions laid down in the case-law were met.
In addition, with the enactment of Law 4972/2022, the controversial provision of the VAT Code on which the recent case law of the Council of the State was based, was amended retroactively, so that business loans granted from 01-01-2021 are subject to a proportional stamp duty of 2.4%, which will have to be paid until 31-12-2022.
Therefore, it is suggested that businesses should review their simple interest-bearing loans and other financing instruments (letters of credit, open account credit, credit cards from non-banking companies) agreed since 01-01-2021 so that, if necessary, to submit retrospective stamp duty returns by 31-12-2022.
It is noted that the manner of handling of credits granted up to 01-01-2021 has not yet been clarified, however, further guidance is expected to be issued by the Tax Authority which will exclude the imposition of the duty on credits granted until 01-01-2021.