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Brussels, 29 January 2009

Direct Taxation: The European Commission opens a new infringement procedure against Greece for failure to comply with a Court judgment concerning capital duty

The European Commission has decided, under Article 228 of the EC Treaty, to open a new infringement procedure against Greece. Despite a 2007 European Court of Justice judgment, Greece has not communicated any changes to its legislation on charging capital duty in the event of transfer of the registered office or the effective centre of management of a company and to the general exemption from that duty to maritime companies. If Greece fails to comply with the letter of formal notice, the Commission may address a reasoned opinion to Greece before bringing the matter to the Court of Justice for a second time, seeking the imposition of penalty payments.

Greece applies capital duty when a company transfers its registered office or place of effective management to Greece. However, a general exemption from capital duty is given to maritime companies. The Commission considers that these rules are contrary to the Directive concerning indirect taxes on the raising of capital (69/335/EEC Directive) which allows Member States to subject only the formation of companies, not their transfer, to capital duty and which does not allow for the exemption of companies operating in specific economic sectors, such as shipping companies, from the tax.

In 2005, the Commission referred the case to the European Court of Justice (see IP/05/349). The Court, in its judgment Commission/Greece (C-178/05 of 7 June 2007), declared that "as a result of its legislation relating to the charging of capital duty in the event of transfer of the registered office or the effective centre of management of a company and to the exemption from that duty of co-ownership of vessels, shipping consortia and any form of shipping company, Greece has failed to fulfil its obligations under the Directive".

Member States are obliged to take the necessary steps to put an end to the infringement and to inform the Commission accordingly. However, to date the Greek authorities have not formally communicated any amendments to the legislation at issue.

The Commission's case reference number is 2004/2051.

For the press releases issued on infringement procedures in the taxation or customs area see:
For the latest general information on infringement measures against Member States see:

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