“SH Loan Ltd” had provided a loan to its shareholder/manager and claimed that it did not expect any profit (interest) from this transaction, since it was not a bank.
The tax authorities issued an assessment where additional interest income was added to the income of the company due to a loan granted to its sole shareholder.
The additional interest income for the company was determined based on the relevant interest rates from the Bank of Greece’s Financial Situation Statistics.
SH Loan Ltd filed an appeal.
Judgement of the Court
The court dismissed the appeal and upheld the decision of the tax authorities.
“Because Mr. , is a person related to the applicant, in accordance with the provisions of Article 2(g) of Law No. 4172/2013, since he is a shareholder (100%), legal representative and member of the Board of Directors. (Chairman and Managing Director), and the granting of the loans in question to the related person was made on economic terms different from those that would apply between unrelated persons, whereas if the loan had been granted to an unrelated person, it would have earned interest income, as calculated in detail on pages 38 to 50 of the relevant audit report, in the total amount of € 22,372.58 for the three years under audit, in accordance with the provisions of Article 50 of Law No. 4172/2013.
Because, contrary to the applicant’s claims, in order to find the interest rates, the audit did not act arbitrarily, but referred to the Bank of Greece’s Statistical Bulletins of Economic Trends, issues 160 (January – February 2015), 166 (January – February 2016) and 172 (January – February 2017).
Since the findings of the audit, as recorded in the audit report of 13/12/2018 by the auditor of the C.E.M.E.P. on which the contested acts are based, are considered to be valid, acceptable and fully reasoned, the Head of the above audit centre was right to issue the contested acts and the present appeal must be dismissed.”