25.06.2015

In the European Commission building in Brussels a hearing was held on Bulgaria's complaint under Article 259 of the Treaty on the Functioning of the European Union (TFEU) against Greece. The hearing was chaired by Heinz Zourek, Director General of Taxation and Customs Union Directorate-General and Johannes Laitenberger, Deputy Director of the Commission's Legal Service; 10 representatives of EC, 4 representatives of Greece and 3 representative of Bulgaria took part in the hearing.

Bulgaria presented its position on the complaint and the main arguments on the breach of EU law, in particular of the fundamental principles enshrined in the TFEU. These are the free movement of goods, services and capital, the freedom of establishment, and the principles of legal certainty, non-discrimination and proportionality. Further arguments were also presented on the draft decision of the Greek Ministry of Finance to implement Article 21 of Law 4321/2015 as the provisions of the decision created greater legal uncertainty for persons and considerable increase of the administrative burden and costs for the businesses.

Greece presented its position on the complaint and the reasons underlying this tax reform - protection of the national corporation tax base - and which had been developed on the basis of different documents (recommendations, communications) issued by OECD and EC related to the introduction of measures against the lowering of the tax base and the transfer of profits/BEPS. Greece was of the opinion that it was not infringing the EU law. The Greek position was not substantiated. They only argued that they were using the best practices against tax avoidance and aggressive tax planning without giving any specific examples.

Bulgaria presented additional arguments on the position of Greece, including on documents developed by the OECD under the BEPS plan although the dispute was regarding to what extent the Greek primary and secondary provisions were consistent with EU law and no documents or opinions of the OECD should be used as arguments. Bulgaria pointed out that it was included in the Greek list only because of the 10% rate of its corporation tax and Greece was the only state that had included in the list of countries with preferential tax regimes EU Member States. Member States have adopted national lists of countries with preferential tax regimes pursuant to Commission Recommendation 8805/2012, but the Recommendation explicitly provides that this pertains only to third countries which do not observe the minimum good governance standards.  The measures, in respect of third countries inclusive, must be compatible with Union law, in particular with the fundamental freedoms enshrined in the TFEU. Greece did not present any arguments on Bulgaria' additional arguments but only stated that the measures were focused on combating tax avoidance.     

The European Commission asked questions of the representatives of both parties and when preparing its reasoned opinion it would take account of the considerations expressed both verbally and in writing. The EC opinion is expected to be announced by 18.08.2015.