by Ulrika Lomas, Tax-News.com, Brussels
The European Commission has asked Greece to end the discriminatory taxation of foreign-flagged ships and amend legislation on duty-free service stations.
Under Greek tax rules, Greek-flagged ships and certain vessels managed from Greece are exempt from income tax. They are instead subject to a lower, simplified tonnage tax for maritime activities.
Ships flying foreign flags are subject to the less favorable income tax regime. Greece also provides an income tax exemption for dividends from entities using Greek-flagged ships, but not for dividends from companies using foreign-flagged ships.
The Commission says that these provisions are contrary to European Union rules on the freedom of establishment, the freedom to provide services, and the free movement of capital.
Greece has also been asked to modify legislation that allows service stations at its land borders with Kipi (Turkey), Kakkayia (Albania), and Evzoni (Macedonia) to sell fuel without excise duties. The Commission believes that when a vehicle is tanked, the fuel should be considered as having been sold for consumption, and therefore cannot remain under a duty suspension regime.
The Commission says that excise duties should be charged on the sale of such fuel, in line with the European Directive on Excise Duties.
Greece must comply with these requests within two months. If it fails to do so, the Commission may refer the cases to the European Court of Justice.
