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Greece vs ‘BIC BIOLEX S.R.O., October 2023, Supreme Administrative Court, Case No Α1804/2023, ECLI:EL:COS:2023:1019A1804.19E1922

Posted on October 19, 2023 | By Courts of Greece | No comments

Category: Disallowed Deduction, Financial Transactions | Tag: Dividends, Interest deduction, Interest limitation, Intra-group loan, Loan

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BIC BIOLEX S.R.O. had received a loan from a related party for repayment of outstanding dividends to its shareholders.

The tax authority disallowed the interest expenses on the loan, finding that the receipt of the loan was not in compliance with the provisions of paragraph a of Article 22 of Law No. 4172/2013, since the loan was not used in the interest of the company but to pay dividend to the shareholder. Although the funds were made available for the fulfilment of obligations, they did not contribute to the generation of income or the development of the company’s business.

BIC BIOLEX S.R.O. filed an appeal which was dismissed by the Administrative Court and later the Administrative Court of Appeal.

An appeal was then filed with the Supreme Administrative Court.

Judgment of the Court

The Court dismissed the appeal of BIC BIOLEX S.R.O. and upheld the decision of the Court of Appeal and the assessment issued by the tax authority.

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