Lawyers provide a professional source of expertise that will be beneficial to most businesses during their operational lifetimes, whether it is to do with the start-up of their business, employment law related issues, debt recovery or registering a patent or trade mark.
Expert legal advice becomes even more important when a company is looking to conduct business in another country, such as Greece, where the legal requirements may be different from the organisation’s home country and local professional knowledge is essential to avoid falling foul of any of these unfamiliar laws.
Understanding local tax laws
One area that could prove very costly for businesses to get wrong when operating overseas is that of tax law. The rules and regulations relating to business taxes can vary from country to country, and companies can find themselves facing severe financial penalties if they misinterpret their liabilities and fail to pay the correct amount of tax at the required time.
Local expert knowledge is invaluable when it comes to ensuring that national law is complied with. In Greece, the lawyers at Kosmidis & Partners have in-depth working knowledge of Greek tax law and can advise overseas businesses on their tax liabilities for any operations that take place in Greece.
The payment of the correct tax is a concern for all European countries, including Greece, and the European Commission (EC) has recently taken action to tackle the problem of tax evasion and avoidance by setting up its ‘Platform for Tax Good Governance’.
The purpose of the Platform is to track the progress of each Member State in meeting Recommendations set out by the Commission last year, including:
- Taking a strong stance against tax havens over and above the existing international measures, by identifying existing tax havens and putting them on national blacklists.
- Aggressive Tax Planning, which suggests ways of blocking off openings used by companies to avoid paying tax, such as strengthening the anti-abuse provisions in bilateral tax treaties and the use of both national and EU corporate legislation. Under this recommendation, Member States are advised to ignore any artificial arrangement put in place by companies for the purposes of tax avoidance and instead to tax these companies based on actual economic substance.
„In battling tax evasion, we are battling to protect the fairness of our tax systems, the competitiveness of our economies and the solidarity of our Member States,” explained Algirdas Šemeta, Commissioner for Taxation, Customs, Statistics, Audit and Anti-Fraud.
“There is too much at stake for this battle to be lost. The renewed vigor amongst Member States to take up this fight is more than welcome. It must now be channeled into action,” he added.
Overseas companies operating in Greece are advised to contact the lawyers at Kosmidis & Partners for expert advice on how corporate tax liabilities are affected by both the country’s national laws and European regulations.
Greece improves global rankings
As a country, Greece continues to benefit from direct intervention from Europe that has been designed to boost the country’s trade prospects and wider economy. In June of this year, the European Investment Bank agreed to provide up to €500 million in trade financing to support small and medium sized companies (SMEs) in Greece in their international trade operations.
These interventions, together with internal improvements made by the country’s governing authorities themselves, are having a very positive impact and increasing Greece’s attractiveness as a destination for international business. So much so in fact that the 2013 Doing Business report from the World Bank Group, which tracks the impact of regulatory reform on business in 185 different economies, found that the improvements to its business climate have been so successful that Greece is included in the list of the ten most improved countries globally for 2011/12.
Facilitating the management of business insolvency
Another recent European development that could potentially affect overseas businesses operating in Greece relates to the issue of business insolvency. Member States have very different rules and regulations governing this subject, and this divergence can have a negative impact on cross-border trade and investment.
The EC recognises how difficult it can be for businesses to remain prosperous in these difficult economic times. Figures from the EC show that as many as 200,000 businesses go bust every year across the EU on average, and up to 25% of these bankruptcies involve an element of cross-border operations.
In December 2012 the EC published details of proposals to reform insolvency laws, and committed to look further at the problem of how best to manage business failure across Europe in light of the fact that different national laws were so diverse on the subject.
As a follow up to this commitment, the EC has now launched a consultation on a common European approach to business insolvency, which seeks views on a number of important issues, including:
- Harmonizing the “time to discharge” (how long it takes to close a business that has failed), which can have a significant impact on whether the business can be restarted. This timing currently varies widely across the EU from four months to as much as six years, and some countries make no provision at all for a failed entrepreneur to ever obtain a discharge.
- The rules that control the exercise of the profession of liquidators.
- Whether problems are created by the current rules governing the duties and liability of directors in insolvency.
- Whether EU rules are required to ensure that fraudulent managers who are disqualified from managing a company in one country are also automatically prevented from doing so in another Member State.
The consultation also asks “whether the legal uncertainty arising from the different conditions under which an act of an insolvent debtor which is detrimental to their creditors can be avoided before national courts has created problems in practice.”
Debt recovery and insolvency is a serious matter in Greece, as with the rest of the EU, and the correct interpretation of the different rules and regulations can have important implications for businesses operating in Greece.
Contact Kosmidis & Partners law firm today for expert professional advice from our English speaking lawyers on any disputes relating to these subjects, or for any other legal issue that might arise through overseas business operations in Greece.