Greece vs Hamios S.A., March 2025, Supreme Administrative Court, Case No A464/2025

Category: Burden of Proof, Disallowed Deduction | Tag: , , , ,
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The dispute centered on whether management services paid by HAMIOS S.A. to other companies within the group were deductible for tax purposes.

The Administrative Court of Appeal had held that the service contracts in question were vague, the supporting documentation insufficient, and that Hamios S.A. had not proven that the services were actually provided or that they related to its business operations. It therefore upheld the assessment disallowing the deduction of management service expenses.

An appeal was then filed by Hamios S.A. with the Supreme Administrative Court.

Judgment

The Supreme Administrative Court dismissed the company’s appeal and upheld the lower court’s judgment.

The Court agreed with the reasoning of the Court of Appeal. It emphasized that, under Greek tax law, intra-group service fees must be substantiated with adequate documentation showing that the services were indeed rendered, that they served the needs of the business, and that they were agreed upon under conditions of economic reality. Since HAMIOS S.A. had failed to meet this burden of proof, the expenses were correctly deemed non-deductible.

 
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Related Guidelines

  1. TPG2022 Chapter VII paragraph 7.55While low value-adding intra-group services may provide benefits to all recipients of those services, questions may arise about the extent of the benefits and whether independent parties would have been willing to pay for the service or perform it themselves. Where the MNE...
  2. TPG2022 Chapter VII paragraph 7.54As discussed in paragraph 7.6, under the arm’s length principle an obligation to pay for an intra-group service arises only where the benefits test is satisfied, i.e. the activity must provide the group member expected to pay for the service with economic or...
  3. TPG2022 Chapter VII paragraph 7.32It may be necessary to perform a functional analysis of the various members of the group to establish the relationship between the relevant services and the members’ activities and performance. In addition, it may be necessary to consider not only the immediate impact...
  4. TPG2022 Chapter VII paragraph 7.18The fact that a payment was made to an associated enterprise for purported services can be useful in determining whether services were in fact provided, but the mere description of a payment as, for example, “management fees” should not be expected to be...
  5. TPG2022 Chapter VII paragraph 7.17These services may be available on call and they may vary in amount and importance from year to year. It is unlikely that an independent enterprise would incur stand-by charges where the potential need for the service was remote, where the advantage of...
  6. TPG2022 Chapter VII paragraph 7.11In general, no intra-group service should be found for activities undertaken by one group member that merely duplicate a service that another group member is performing for itself, or that is being performed for such other group member by a third party. An...


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