The control of intra-group transactions and transfer pricing is now one of the central pillars in the search for hidden tax assets, with constant reports from the audit authorities, and is therefore a very important subject of corporate tax control.

The term “Intra-group transactions” refers to transactions between related parties.

Which are considered Associated Parties

Article 2 of Law 4172/2013 describes the link between enterprises, between natural persons and enterprises and between natural persons.

Natural persons are related to each other when there is a conjugal relationship or a relationship of ascendants or descendants in a direct line. That is, the androgynous couple is connected to each other, but there is also a connection to every ancestor or descendant without limit (grandfather/grandmother/father/mother-son/daughter/grandson/granddaughter).

The connection between businesses as well as between individuals and businesses is divided into three main categories by law:

• Direct connection, where a person has a stake of at least 33% in another person then these persons are considered to be related
• The indirect link which can be:
  • or where a third person has a holding of at least 33% in two or more persons, those persons shall be regarded as related
  • or where a person has an interest in another person who in turn has an interest in another person and the first person has a combined interest of at least 33% in the latter, then these persons are considered to be related (first-last)
• The connection through influence which can be:
  • either direct, where one person has the ability to exercise or exerts decisive influence over another person, then those persons are regarded as related
  • or indirect, where a third party has the ability to exercise or has the power to exercise decisive influence over two or more persons, then those persons are considered to be related

What are the obligations

According to article 21 of Law 4174/2013, there are two basic obligations for those who carry out intra-group transactions:

• The maintenance of an Intra-Material Transaction File
• The submission of the Summary Table of Intra-group Transaction Information, which is submitted electronically to TAXIS

The above obligations are:

• Legal entities that carry out intra-group transactions of more than 100,000 euros cumulatively with all related parties, regardless of whether it is income or expense.
• If the turnover of legal persons is more than 5,000,000 euros then the above limit is adjusted to 200,000.

Businesses are required to submit a Documentation File, which is prepared by the deadline for submitting the annual income tax return and is accompanied by a Summary Information Table, which is submitted electronically to the Tax Administration within the same deadline.

The deadline for companies that close their financial year on 31/12/2022 is ³⁰ June 2023, and the fines are high in cases of non-compliance.