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European Commission - Press release

Taxation: Commission refers Greece to Court regarding the inheritance tax treatment of bequests to non-profit organisations

Brussels, 26 March 2015

The European Commission has decided to refer Greece to the Court of Justice of the European Union regarding its inheritance taxation of bequests to non-profit organisations in another EU Member State or EEA State.

The Greek legislation treats legacies bestowed on certain non-profit entities established in Greece more favourably than those bestowed on similar entities established in other EU/EEA States. A preferential tax rate of 0.5% is automatically available to certain Greek non-profit entities, whereas similar non-profit entities established in other EU/EEA States can only benefit from the preferential tax rate in Greece if legacies to Greek non-profit entities also have access to a preferential tax treatment in such other EU/EEA State. If this reciprocity condition is not met, the applicable tax rate varies between 20-40%, depending on the taxable value of the property.

Therefore, Greece taxes legacies more heavily where the beneficiary is a comparable non-profit entity established in another EU/EEA State that does not grant a reciprocal preferential tax treatment to Greek non-profit organisations. As a consequence, this legislation has the effect of reducing the value of the property bequeathed to these foreign non-profit entities. Such a reduction in the value of an inheritance entails a restriction on the free movement of capital which cannot be justified and is contrary to Article 63 TFEU and Article 40 EEA Agreement.

The Commission sent a request taking the form of a reasoned opinion to Greece on 20 November 2013 (MEMO/13/1005), asking Greece to amend its legislation. As the national legislation was not amended, the case is now being referred to the Court of Justice of the European Union.

Useful links

More information on the case is available at: http://europa.eu/rapid/press-release_MEMO-13-1005_en.htm

For press releases on infringement proceedings in the areas of taxation and customs see:
http://ec.europa.eu/taxation_customs/common/infringements/infringement_cases/index_en.htm

For the most up-to-date general information on infringement proceedings initiated against Member States, see:
http://ec.europa.eu/eu_law/infringements/infringements_en.htm

On the March infringement package decisions, see MEMO/15/4666

For more information on EU infringement procedures, see MEMO/12/12

IP/15/4674

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