Our tax litigation team has successfully represented a major multinational group before the Supreme Court, against a multi-million stamp duty assessment on a cash pooling scheme the group had implemented in Greece. The Supreme Court has just delivered a landmark decision ruling that the imposition of stamp duty is illegal.
More specifically the Supreme Court, accepting our relevant argumentation, has qualified the deposits made in the context of the cash pooling as loans and to the extent the respective balance in the cash pooling account is interest bearing, it ruled that such loans fall within the scope of VAT and therefore outside the scope of stamp duty. To be reminded that Greek VAT legislation excludes from stamp duty the transactions that fall within the scope of VAT.
The decision of the Supreme Court ends a years-long ambiguity as regards the tax treatment of cash pooling, which had led to massive stamp duty assessments and had in many instances discouraged multinational groups from implementing such schemes with their Greek subsidiaries.
The decision blazes a trail for companies that have paid stamp duty on cash pooling to validly claim refund, subject to the statute of limitation rules, provided that their cases fall within the framework of the Supreme Court’s decision. Furthermore, it will allow more tax certainty on the implementation of cash pooling schemes from now on.