I OVERVIEW OF M&A ACTIVITY
Following many years of deep recession and increased levels of unemployment, Greece is now trying to recover and restore stability in the Greek economy. Increased taxation and social security are not helpful, and enterprises are awaiting for stability and solutions to structural problems of the Greek economy, which will allow extrovert business, new investments and the creation of new jobs.
At the same time, the government has started to make some progress with the privatisation procedures already announced as part of the policy framework. After significant delays, the implementation of several projects in the area of privatisations, such as Ellinikon, the privatisation of Thessaloniki port and the privatisation of DESFA, has eventually gone through to a significant extent. In addition, the new hyper fund was created with the aim of promoting privatisations in a much wider spectrum compared with what was planned some years ago. However, it remains to be seen how the government will finally treat this politically sensitive situation.
In addition, Greece has been heavily involved in the refugee crisis, which has significantly affected an economy and society that was already under pressure, adding further problems to be managed by the government and Greek society, and creating an odd environment in the country.
The private sector, to the extent that it is not dependent on the state, has shown it is capable of surviving despite these difficulties. Under improved circumstances in the financial environment, it should be able to grow rapidly and recover relatively quickly.
II GENERAL INTRODUCTION TO THE LEGAL FRAMEWORK FOR M&A
The Greek M&A legal framework is mainly composed of the following:
- Law 4548/2018, on public limited companies;2
- Law 4601/2019 (corporate provisions for business transformations);
- Law 4172/2013 (tax incentives for business transformations);
- Law 2166/1993 (tax and other incentives for business transformations (e.g., merger, split, spin-off));
- Law 1297/1972 (tax incentives for business transformations);
- Law 3049/2002 on privatisations, and Law 3985/2011 and Law 3986/2011 on the Privatisation Fund;
- Law 3864/2010 on the Hellenic Financial Stability Fund;
- Law 3777/2009 on cross-border mergers of limited liability companies (implementation of Directive 2005/56/EC);
- Law 3401/2005 on prospectuses in the case of public offers of securities; (implementation of Directive 2003/71/EC), which was amended by Law 4374/2016 (adopting EU Directives 2013/50 and 2014/51);
- Law 3461/2006 on public takeovers (implementation of Directive 2004/25/EC);
- the Athens Stock Exchange Regulation; and
- Law 3959/2011 on Greek merger control provisions.
III DEVELOPMENTS IN CORPORATE AND TAKEOVER LAW AND
An important legislative initiative took place in 2018, aiming to modernise the provisions governing the société anonyme and create a more attractive framework. In this respect, the old L2190/20 has now been abolished and replaced by new L4548/2018. Within the same modernisation framework, a new L4601/2019 has been further introduced, covering all types of potential corporate transformations (including conversions, mergers, spin-offs), regardless of corporate form. Some further initiatives are currently in progress regarding the Commercial Registry and the revision of the corporate governance rules.
Indeed, requests from the business community concern more important measures that need to be taken to increase the competitiveness of Greek enterprises in their daily operations, such as fast-track permit procedures.
IV FOREIGN INVOLVEMENT IN M&A TRANSACTIONS
Notwithstanding the above efforts, the business environment in Greece remains to a large extent characterised by bureaucracy, administrative procedures and actual disincentives for foreign investors. One of the recent legislative initiatives refers to the reform of the framework for strategic investments, the results of which remain to be seen in the near future.
Other than that, within the privatisation programme run by the Hellenic Republic Asset Development Fund, the majority stake of Thessaloniki Port Authority was sold to a German-led, French and Russian consortium. In addition, the tender process concerning the sale of 66 per cent of the state-controlled Greek gas operator DESFA SA went through successfully, with the Snam–Enagás–Fluxys consortium being awarded as the preferred bidder of the process. On the other hand, the attempted sale of a 50.1 per cent stake in Hellenic Petroleum ended in failure, as neither of the two consortiums that had originally expressed an interest submitted a binding financial offer, while the ongoing process for the concession of Egnatia Odos is significantly delayed.
V SIGNIFICANT TRANSACTIONS, KEY TRENDS AND HOT INDUSTRIES
There have been a couple of M&A deals during the past 12 months. In the banking sector, probably the most interesting deal was the merger between Eurobank Ergasias and Grivalia Properties REIC. It was respectively announced that the merger creates the best-capitalised bank in Greece, and the deal was successfully completed in the second quarter of 2019. In gambling sector, OPAP proceeded with the acquisition of 51per cent of Stoiximan SA (Greek and Cyprus activities), one of the leading online betting companies in the region. Another interesting deal concerned the further investment by CVC Capital in the health sector by further acquiring Hygeia SA hospital after last year having acquired both the Metropolitan and IASO hospitals.
The real estate sector, after having suffered severely from the effects of the crisis, is already recovering, with a lot of ongoing investments especially in the tourism sector (e.g., Four Seasons Astir Palace Hotel Athens, Grand Hyatt Athens). It is worth mentioning that the recent trend in favour of short-term leases (e.g., through the Airbnb platform) have assisted in this development, but the commercial leasing of stores and offices has also started improving.
It is also finally worth noting the trend of several Greek companies to seek an alternative to bank financing through the issuance of bond loans. This tendency has continued in the past year especially through bonds listed on the regulated market of the Athens Stock Exchange.
VI FINANCING OF M&A: MAIN SOURCES AND DEVELOPMENTS
As far as mergers are concerned, there is no practical need for financing since they are implemented through an exchange of shares. Acquisitions can either involve an exchange of shares (which was the case in several past deals, especially in the banking sector) or a cash consideration, in which case financing is required. Such financing normally takes the form of one of the two following alternatives:
- self-funding by the shareholders of the acquiring company: the procedures for an increase in share capital are rather formal, as per the EU directives, especially when made in cash. A main point of interest is the price offered for the new shares to be issued (which cannot be less than market value), because this is linked with the valuation of the company and determines the balance between shareholders; or
- bank financing, which can either be in the form of a classic bank loan or that of a bond loan (common or convertible) issued by the company: experience shows a tendency in favour of bond loans due to their favourable tax and other treatment, as well as due to the easy transfer of bond titles, if needed. It cannot be ignored that, contrary to the recent past, the severe financial situation has heavily affected and practically eliminated bank financing for M&A.
In a case of intra-group financing, attention should be paid to the applicable provisions of Law 4548/2018 regarding related party agreements. In any case, one must also be cautious about the arm's-length principle, in accordance with transfer pricing rules.
VII EMPLOYMENT LAW
Employment legislation was not further developed during 2018 or to date in 2019 as far as M&A activity is (directly) concerned, except for a couple of provisions pertaining to the protection of employees' rights in the case of ship transfers (as part of the business to be transferred).
On the one hand, there is a plethora of special provisions of law regarding, inter alia, mergers and restructurings of state-owned enterprises (SOEs) and within the banking sector. Numerous provisions have been further instituted on an ad hoc basis to regulate the employment relations of specific state organisations (see, for instance, Article 3 of Law 4138/2013 regarding the merger of local development organisations). However, no generally applicable rule can be derived therefrom that would be of any interest for the private sector; past governments very often established special legislative texts for M&A of SOEs due to their politically sensitive nature.
On the other hand, as a general rule, in the case of a merger there is a full succession of the surviving (absorbing) entity regarding all the rights and obligations of the merged company. Accordingly, the latter becomes fully liable for any and all labour obligations of the former. In the case of acquisitions, there are protective provisions regarding transfers of businesses (implementation of European law) that provide that both the transferor and the transferee shall be jointly and severally liable in respect of labour obligations that existed at the date of transfer. It is worth mentioning that the means of transfer (i.e., if it takes place via a contract – even an invalid one – or by law, or even by a simple assignment of the operation of the business without transfer of tangible or intangible assets) is irrelevant, but the transfer and succession in the employer's position is examined on a case-by-case basis.
Since 2010, it has been expected that the downturn in the Greek market and the crisis in the Greek economy would generally give rise to significant changes in employment law, which might not refer directly to M&A topics but which would nevertheless have an impact, since the labour perspective is generally a critical point of assessment in an M&A deal. As part of the agreement for the financial support of the country, Greece undertook to proceed quickly with radical changes in many sectors of the Greek economy and in the labour market. The main areas that have been affected from a labour law perspective are as follows:
- introducing restrictions in the system of collective labour agreements or negotiations, and a more flexible regime;
- abolishing the procedure of referring collective labour disputes to an organisation for mediation and arbitration;
- increasing the thresholds in the case of group dismissals and, eventually, abolishing the authorities' prior approval;
- decreasing severance pay and allowing its repayment in instalments;
- introducing more flexible employment terms (sub minima) for workers under the age of 25;
- extending probationary periods, facilitating greater use of part-time work, moderating wages for overtime and introducing remuneration connected to the productivity of a business; and
- keeping salaries temporarily frozen (initially) for three years after the conclusion of the previously mentioned memorandum.
There have been quite a few examples of the implementation of the above-mentioned guidelines during the past seven years. For instance, the Ministers' Council issued Act No. 6/2012, which instituted an obligatory decrease of 22 per cent in minimum wages under the national collective labour agreement, and abolished the possibility of unilaterally resorting to arbitration in cases where collective bargaining fails. Law 4093/2012 further reduced the termination severance (mainly by preventing the accrual of seniority rights after November 2012), facilitated the split of annual leave, decreased the requirements for the operation of temporary work agencies and instituted a number of additional favourable provisions for the labour market. Most importantly, however, Law 4093/2012 abolished the system of determining the minimum wage through collective bargaining procedures by introducing the minimum wage itself. Finally, it vests the government with the power of adjusting the minimum wage.
In general, the purpose of the above amendments was to reduce the cost of labour and make the Greek employment market more competitive. On the other hand, various provisions have been instituted to protect vulnerable groups, such as older employees. Thus, it is obvious that, due to the financial support of EU Member States and the International Monetary Fund, Greece has been obliged to proceed more quickly to implement those measures to ensure the 'flexicurity' of the employment market.
However, based on the experience of recent years, the measures implemented so far have not efficiently served these purposes. The above situation, apart from rendering any reforms ineffective, has made it unclear whether each provision of this multitude of recent laws affecting the employment terms in the public and private sectors would survive if contested before the Greek courts. There had been various judgments of first instance courts (within the framework of injunction measures) that considered certain provisions concerning public sector employees as being contrary to the provisions of the Greek Constitution and European law. In addition, such legislative initiatives of the government had raised multiple concerns for the Committee on Freedom of Association of the International Labour Organisation's governing body, especially as to what regards the weakening and eventual abolishment of collective bargaining rights and the overall scope of collective bargaining laws. It must be noted, however, that said changes and restrictions on collective bargaining agreements seem to be reduced after the expiration of the middle-term bailout programme, and the competent authorities will start interpreting the respective terms in a way that is more favourable to the unions' side. For instance, a collective bargaining agreement at the level of a business could include provisions deviating from the agreement made for a specific market or profession and introduce provisions weakening workers' rights and even reducing salaries, which is no longer the case as, since August 2018, said option is considered as no longer valid. Similarly, the government has reinstated the obligatory extension of collective bargaining agreements, which had been suspended until the end of the economic adjustment programme.
Moreover, the government has made use of the option to define the minimum wage, and by the end of 2018 had increased the minimum wage to €650 per month (the previous minimum wage was €586.80), and abolished the distinction between the minimum wage for young (up to 24 years old) workers and employees that gained a gross salary of €511.00. Said increase also impacted the social security contributions for both employers and employees, as well as of other professionals, as the new minimum wage is the basis for the calculation of the minimum social security contribution for professionals (e.g., lawyers, engineers). On the other hand, since 1 January 2019, a decrease in the social security contributions for this category of professionals has been introduced equal to one-third of the percentage calculated on the total income of the individual, but a suspended auxiliary social security contribution for these professionals started to be implemented as of 1 January 2019, although not any more as a percentage on the individual's income but just on the minimum wage amount (as determined with a calculation of years of service); therefore, the hit on the market seems to be less hard than was expected. In 2014, the Administrative Supreme Court found certain provisions of Ministers' Council Act No. 6/2012, and in particular the ones requiring the consent of both parties (employer and trade union) for the initiation of an intermediation and arbitration process, to be non-compliant with the constitutional provisions, which led to the reinstatement of the previous regime of the unilateral application of the interested party (Law 4303/2014).
In 2016, the government launched a dialogue regarding the introduction of a new social security system, which was however rejected by, inter alia, the trade unions and professional associations. The draft bill comprised several structural changes in the area of social security, with the major ones being to have all social security funds and organisations merged into one; and the implementation, for all categories of employees, self-employed persons and other professionals, of a uniform treatment with regards to the calculation of their contributions based on their annual or monthly income falling within a range of 25 to 36 per cent. There were a variety of reactions about this restructuring of the social security concept (e.g., Greek lawyers abstained from their duties for almost six months), but the government managed to pass the legislation (Law 4387/2016). In terms of employment, a direct impact of the recent Social Security Act is employees being subject to more than one social insurance organisation (e.g., through being employees and self-employed at the same time), who are now required to pay more (approximately double) social security contributions without being entitled to additional pension amounts.
In 2017, Law 4472/2017 introduced a radical change pertaining to the collective dismissals legal framework by abolishing the ministerial veto that used to apply under the previous legal regime, which provided for an information and consultation procedure between the parties involved as well as the prior approval of the competent authorities in cases where the parties failed to reach an agreement. New Law 4472/2017 set out a different procedure on collective layoffs, including the extension of the consultation process of up to 30 days and the supervision of the procedure by a new supervising body, the Supreme Labour Council. Pursuant to these new statutory provisions, the Supreme Labour Council is now in charge of the collective layoffs process, and is also responsible for checking whether employers have abided by the consultation and information requirements set out in law. If the Supreme Labour Council finds that these requirements have been met, an employer is free to proceed with the intended group dismissal. On the other hand, non-compliance with these requirements would be the only reason for the government to discontinue a collective redundancy process, in the sense that the government's role is now limited to the inspection of the existence of these typical consultation requirements.
Until very recently, Presidential Decree 178/2002 on the protection of employees' rights in the event of a transfer of business (which harmonised EU Directive 2001/23) was not applicable in the case of ship transfers. Through Law 4532/2018, said protection is now extended to transfers of ships under the Greek flag, but only when they are part of the business to be transferred and on the conditions set forth in Law 4532/2018.
Finally, the government recently adopted the wording of the Revised European Social Charter as to what regards the termination of an employment agreement, and introduced into Greek employment law the compulsory 'causal' redundancy. Until the introduction of Law 4611/2019 (Article 48), Greek law provided that the termination of an employment agreement should not be grounded on a specific cause if it was made in writing and the employee was receiving legal severance. Today, the right of an employer to terminate must be grounded on a specific cause as per Article 24 of the Revised European Social Charter (ratified by L4359/2016), and the employer must prove that these conditions have been met in cases where the validity of the termination is challenged. This new condition will probably affect and reduce the right of termination of employers, especially in cases of no apparent reason a termination.
VIII CIVIL PROCEDURE CODE
One of the first measures adopted by the parliament directly after the conclusion of the July 2015 agreement with the EU institutions was the adoption of a new Civil Procedure Code. Law No. 4335/2015 has introduced amendments in most areas of civil disputes aimed at expediting the process up to the hearing of cases (which, prior to this change, could take more than three to four years). The new Code provides that the whole process starts with the filing of a claim, without setting a more specific date for its hearing, which will take place within a maximum of 160 days from its submission. The process is concluded without a real hearing, and based only on documents and affidavits of the parties, while the presence of barristers is no longer necessary and grounds for the deferral of a hearing are practically abolished. Furthermore, the new Code has adopted a much quicker process for the enforcement of judicial decisions and a swift procedure for the collection of debts. The new Code came into force on 1 January 2016.
The first couple of years of implementation showed a slight improvement in the courts' addressing of civil cases and delivering judgments more speedily. However, it seems that the main purpose and aim of the new Code will not be satisfied entirely, as the courts are showing that they cannot deal with the number of the cases addressed to them: hearing dates are now set in most cases eight to 12 months or more from the final submission of the pleadings of the litigants, and the publishing of judgments has started to show significant delays.
A new tool for dispute resolution was introduced in the past 12 months with the aim of helping the government in its effort to relieve the courts of the volume of cases and claims pending. Law 4512/2018 provides for a compulsory mediation before the start of any judicial proceedings in certain areas of day-to-day business activity (e.g., disputes over trademarks, patents and IP rights in general may not be submitted for resolution to the competent court before the claimant can prove that mediation has been attempted but failed). Other kinds of disputes that have to be addressed through mediation before any submission of claims to the competent courts are, inter alia:
- claims based on medical malpractice;
- compensation and claims from car accidents;
- the collection of professional fees; and
- claims based on stock exchange contracts.
Mediators should be accredited by the Central Mediation Committee, and are full-time professionals with special training in mediation techniques. The Law provides that the maximum length of the mediation process is 24 hours in total (which may be extended by the parties), and for a short period for the conclusion of the process within 15 to 30 days from the appointment of the mediator. This process initially was planned to be implemented on October 2018 after the accreditation of the new mediators, but it has been suspended for another year following several reactions of the local bars.
IX TAX LAW
Following the complete replacement of the Code of Income Taxation (CIT) and the introduction of a new Code of Fiscal Procedure, both of which came into force on 1 January 2014, as of 1 January 2015 the Greek Accounting Standards3 abolished the Code of Transactions Tax Reporting and the Greek accounting legislation, thereby becoming more compliant with the International Accounting Framework.
During 2018, changes in the tax legislation continued, mostly aiming at implementing reforms agreed by the government within negotiations for financial support and enhancing the collection of public revenues, but also adopting EU rules and complying with commitments under international treaties.
The most important tax issues are as follows.
i Transfers of shares
From 1 January 2014, any capital gain that derives from a transfer of shares of non-listed companies is subject to a 15 per cent tax if the transferor is an individual (Articles 42 and 43 CIT). In the case of legal entities, the capital gain shall be added to the gross income and, should there be a profit from the business activity, it shall be subject to the tax rates that apply to income from business activities (i.e., 28 per cent for fiscal year 2019). For the calculation of the capital gain, the acquisition cost is deducted from the price.
The aforementioned tax is also imposed on the transfer of shares of listed companies provided that the following conditions are cumulatively met: the transferor participates in the share capital of the company with a stake of at least 0.5 per cent, and the shares to be transferred have been purchased after 1 January 2009. In any case, a tax on stock market transactions is also imposed.
ii Corporate income tax rate
The corporate income tax rate for public limited companies, limited liability companies, private capital companies, Greek branches of foreign corporations and, in general, any company that maintains double-entry accounting books, which was raised from 26 to 29 per cent for fiscal years 2015 onwards, shall be gradually reduced to 28 per cent (for fiscal year 2019), 27 per cent (for fiscal year 2020), 26 per cent (for fiscal year 2021) and 25 per cent (for fiscal years 2022 onwards) (Article 58, Paragraph 1 CIT).
iii Taxation on dividends
For profits distributed from 1 January 2019 onwards, a withholding tax of 10 per cent is applicable on dividends. From 1 January 2017 until 31 December 2018, the rate of said tax was 15 per cent.
Withholding of the aforementioned tax exhausts the tax liability, provided that the taxpayer is an individual (Article 36 Paragraph 2 CIT) or a legal entity that is not a Greek resident and does not have a permanent establishment in Greece (Article 64 Paragraph 3 CIT). Under specific conditions, which are set out by Article 63 CIT (adopting Directive 2011/96/EC), intra-group dividends may be totally exempt from withholding taxation.
Dividends distributed to Greek legal entities or legal entities with a permanent establishment in Greece are also subject to withholding tax at a rate of 10 per cent, although an exemption under the conditions of Article 63 CIT may apply in the case of intra-group dividends. However, their income from dividends is added to their annual gross income and taxed as a profit at a rate of 29 per cent. In such a case, the tax withheld is credited against the tax payable.
Pursuant to Article 48 CIT, intra-group dividends received by a legal entity that is a tax resident of Greece are totally exempt from tax, provided that:
- the recipient holds a minimum participation of at least 10 per cent of the value or number of the share capital, core capital or voting rights of the legal entity that makes the distribution of profits;
- the aforementioned minimum participation is held for at least 24 months; and
- the legal entity that makes the distribution of profits:
- has a legal status that is included in the list of EU Directive 2011/96/EC;
- is a tax resident of an EU Member State, in accordance with the laws of that state, and may not be considered as a tax resident of a third country (non-EU Member State) by virtue of the double taxation treaty that has been signed with that third country; and
- is subject to one of the taxes listed in EU Directive 2011/96/EC.
In such cases, dividends received by the legal entity must form a tax-free reserve until they are further distributed to the entity's shareholders.
Pursuant to Directives 2014/86/EC and 2015/121/EC, intra-group dividends are exempt from taxation to the extent that the respective dividends have not been deducted by the subsidiary. Furthermore, the aforementioned exemptions (of Articles 48 and 63 CIT) shall be alleviated in cases where it is considered that a non-genuine arrangement exists (i.e., an arrangement that has not been put into place for valid commercial reasons reflecting the economic reality).
iv Transfer pricing
The new CIT and the Code of Fiscal Procedure include transfer pricing (TP) provisions that differ in some ways when compared to the previous legal framework, and that are applicable for fiscal years starting as of 1 January 2014. It should be noted that under the new legal framework, an advanced pricing agreement may be established with the Ministry of Finance.
Taxpayers having intra-group transactions exceeding the thresholds provided in the above legislation have two main obligations: preparation of a TP report for the documentation of intra-group transactions within the deadline for submission of the annual tax return (the report is submitted to the tax authorities upon request and within 30 days of the request), and the filing of a summary information table within the same deadline. TP legislation provides serious penalties for the violation of the arm's-length principle and for the failure to comply with the above obligations. There are also new penalties provided for the inadequacy, inaccuracy or late submission of the summary information table and TP report. Finally, the new TP legislation specifically refers to the OECD Transfer Pricing Guidelines for the documentation of intra-group transactions. There are also various circulars of the Ministry of Finance issued to date that establish special rules for the documentation of intra-group transactions.
In accordance with the new CIT, losses incurred abroad cannot be used against profits of the same tax year or against future profits unless there is income that derives from other EU or EEA Member States and there is no provision in a double taxation treaty that provides a tax exemption for it. By virtue of a recent circular issued by the Ministry of Finance, losses incurred abroad shall be monitored per country and may be used against future profits incurred in the same country. Moreover, by virtue of a more recent circular, before the deduction of said losses in Greece, Greek entities shall need to prove before the fiscal authorities that they have made every effort to deduct losses abroad and have failed to do so.
In addition if, during a fiscal year, direct or indirect ownership of the share capital or voting rights of a company is changed by more than 33 per cent of its value or number, the transfer of losses ceases to apply as regards losses incurred during that fiscal year and the previous five years, unless it is proven by the company that the change of ownership has been exclusively made for commercial or business purposes, and not for tax-avoidance or tax-evasion purposes.
vi Deductibility of interest – thin capitalisation rules
According to the CIT, borrowing costs are not recognised as deductible business expenses to the extent that the surplus of the interest expenses against income from interest exceeds a rate of 30 per cent of taxable profits before interest, taxes, depreciation and amortisation (EBITDA). The term borrowing costs includes, apart from interest on loans, inter alia, other costs economically equivalent to interest and expenses incurred in connection with the raising of finance, as well as the finance cost element of finance lease payments and the capitalised interest included in the balance sheet value of a related asset. It should be noted that the aforementioned rate used to be higher during previous fiscal years, and was gradually reduced.
However, interest expenses shall be recognised as fully deductible business expenses up to an amount of €3 million net-registered interest expenses per year. Any interest expense that is not deductible pursuant to the aforementioned rules shall be carried forward with no time limit. This does not apply to credit institutions or to leasing and factoring companies.
vii The new CIT definitions and provisions
The new CIT introduces certain new definitions and provisions, the most important being terms for legal entity and legal form, and the introduction of the true place of exercise of management criterion.
The Code of Fiscal Procedures introduces definitions of tax avoidance, whereas a general anti-abuse clause has been introduced pursuant to which:
the tax administration shall ignore any arrangement or a series of arrangements which, having been put into place for the main purpose or one of the main purposes of obtaining a tax advantage that defeats the object or the purpose of the applicable tax law, are not genuine, having regard to all relevant facts and circumstances.
viii Statute of limitations
The statute of limitations period varies depending on the category of tax and the fiscal year.
The basic statute of limitations for fiscal years 2014 onwards is five years, which may be raised to 20 in cases of tax evasion, which covers a very broad number of cases. The 20-year statute of limitations also applies to fiscal years that had not been time-barred on 1 January 2014. However, by virtue of a more recent opinion given by the state's Legal Council, the 20-year statute of limitations shall not be applicable for fiscal years up to and including 2011.
For a very long time, the expiry of the statute of limitations has been continuously extended by special laws. According to a recent decision of the Supreme Administrative Court in Plenary Session, in brief, such extensions of the statute of limitations have been judged to violate the Constitution.
Another aspect of the statute of limitations concerns fiscal years 2011 to 2013, during which the tax audit for sociétés anonymes was required to be carried out by a Greek certified auditor issuing a tax certificate under the then-applicable Law 2238/1994. According to certain jurisprudence, the tax authorities do not have the right to conduct an audit on sociétés anonymes with no comments in the tax certificate after the lapse of 18 months from the end of each relevant year unless exceptional circumstances exist. For periods starting from 1 January 2014 onwards, acquisition of an annual tax audit certificate does not affect the statute of limitations.
X COMPETITION LAW
Merger control provisions are included in Law 3959/2011 regarding the protection of free competition (Articles 5 to 10) and are enforced by the Hellenic Competition Commission (HCC), an independent administrative authority.
The Greek merger control system provides for pre-notification to the HCC (30-day deadline) in cases of concentration where the following two thresholds are cumulatively met: all participating enterprises have an aggregate worldwide turnover exceeding €150 million, and at least two of them each has a national (Greek) turnover of at least €15 million. In such a case, the transaction cannot be completed without the clearance of the Competition Commission. The latter theoretically has the power to block a transaction (but has not blocked any application to date).
There is currently no post-notification obligation for minor mergers under Greek law.