Greece: Introduction of omnibus account at AthexCSD and sales tax-related obligations for transactions outside AthexCSD - Update VI
Note: This announcement, originally published on 19 March 2021 and updated on 1, 9, 23, 30 April, 7 and 19 May 2021, has been further updated with details on fees and penalties applied for the sales tax, a description of different scenarios where the Greek sales tax applies, the entities which have the reporting obligation. Changes in the relevant section have been highlighted.
Clearstream Banking1 would like to inform customers of the upcoming changes to be introduced by AthexCSD linked to its authorisation under the Central Securities Depositories Regulation (CSDR) and the impact of those changes on customers.
12 April 2021
AthexCSD has been authorised as CSD under CSDR and has introduced a new account type, i.e. omnibus account, into its system.
With the introduction of this account type, new reporting, tax collection and payment obligations will fall on AthexCSD participants, registered intermediaries (e.g. entities in whose name the omnibus account is opened, such as Clearstream Banking), as well as other intermediaries in the custody chain, e.g. Clearstream Banking customers. These obligations are detailed below. Further details are still awaiting confirmation in the market and will be communicated as soon as available.
Clearstream Banking together with its custodian will migrate the securities to the new omnibus account on 12 April 2021. Customers should note that the opening of the new omnibus account at AthexCSD will not have any impact on customers’ or their counterparties’ settlement instructions.
The new law, L. 4799/2021, published in the Greek Government Gazette, foresees different scenarios in which the Greek sales tax is applicable. In addition, the reporting obligation falls to different entities according to the scenario.
Impacted transactions and securities
- If AthexCSD is the issuer CSD, all securities are taxable for either Greek or foreign resident sellers;
- If AthexCSD is not the issuer CSD, securities listed in a Greek Market can be subject to the Sales Tax:
- If settlement occurs in AthexCSD, the securities are taxable for Greek and foreign resident sellers. [art. 9 par. 2 case c’ of L. 2579/1998, as amended by L. 4799/2021];
- If settlement occurs in the custody chain of an AthexCSD omnibus account, the securities are taxable for Greek and Foreign resident sellers (i.e. this is the case if the assets are held in Clearstream on the link to Greece). [art. 9 par. 2 case d’ of L. 2579/1998, as amended by L. 4799/2021];
- If settlement occurs outside of the custody chain of an AthexCSD omnibus account, only Greek resident sellers are taxable. [art. 9 par. 2 case e’ of L. 2579/1998, as amended by L. 4799/2021].
Settlement of sales transactions within AthexCSD
The current processing of sales tax at the rate of 0.2% being charged on sale transactions continues to be applicable. Customers do not need to include these transactions in the new reporting. Indeed, for all securities held in an omnibus account and settled in AthexCSD, Greek sales tax is calculated and reported by AthexCSD.
Settlement of sales transactions outside AthexCSD
Sales transactions (and in some cases FOP deliveries) settling on an Athex omnibus account or on any account belonging to the custody chain of this omnibus account, are reportable to AthexCSD and subject to 0.2% sales tax, payable to the Greek Tax Authorities, on the value of the transaction. In the latter case, the omnibus account holder will be responsible for the Sales Tax calculation and declaration to the Greek Tax Authorities, as well as its payment.
The sales tax is calculated in Euros on the sale value of the shares and borne by the seller. If no price has been recorded, the tax is calculated on the Athex Stock Exchange closing price at the settlement date.
For sales of non Greek securities (i.e. Athex is not the issuer CSD) listed in the Greek Stock Exchange and settled outside AthexCSD, or not held in the custody chain of an omnibus account at AthexCSD, only Greek tax residents are taxable and will have to calculate the tax and report it to the Tax Authorities.
The Greek law provides some exemptions from sales tax which are outlined at the end of this document.
As a registered intermediary in the settlement chain, Clearstream Banking will:
- Prepare tax declaration files on internal delivery versus payment (sales) transactions settled in Clearstream Banking’s books and send them to Citibank Athens, our local custodian, for further reporting to AthexCSD and the Greek Tax Authorities.
Customers will be responsible for reporting to Clearstream Banking:
- Free of payment deliveries (FOPs) settled in Clearstream Banking’s books;
- Free of and against payment deliveries settled within customers’ books;
- Any transfers outside customers’ books of which the customer has knowledge. Customers must ensure appropriate arrangements with their underlying clients and throughout the custody chain for the purposes of fulfilling the compliance with this reporting requirement.
Customers can find the format and content of the declaration file as provided by AthexCSD in the Annex below.
Clearstream Banking will send the declaration files received from customers to Citibank Athens for further reporting to AthexCSD and the Greek Tax Authorities.
Payment of sales tax
Clearstream Banking will:
- Calculate the sales tax amount (0.2%) on the internal delivery versus payment (sales) transactions and debit the tax amount from customers’ accounts;
- Debit the tax amount from customers’ accounts as reported by customers in their tax declaration files;
- Pay the sales tax on all transfers identified and/or reported as subject to sales tax to Citibank Athens for further credit to AthexCSD and the Greek Tax Authorities.
AthexCSD advised on 29 April that they expect to debit on 10 May 2021 the sales tax for the transactions that settled in April and were identified as taxable. Consequently, Clearstream Banking expects to debit the sales tax from customers’ accounts on the same date for the transactions that settled in the previous month and were identified as taxable.
As an annex to this announcement, customers can find the latest version of the MS Excel template to be filled in and converted into csv format to submit sales tax file declarations to Clearstream Banking of transfers settled outside AthexCSD.
Please note that the MS Excel template may still be subject to modifications either by AthexCSD or by the Greek Tax Authorities. We will advise customers as soon as we receive this information.
How to submit declarations
Starting from settlement date 12 April 2021 and until settlement date 11 June 2021, customers should send their declaration files directly to Clearstream Banking via an email to GreekSalesTaxReporting@clearstream.com. The Excel template must be password protected and the password sent via separate email. Password must be sent via separate email.
As from 14 June 2021, customers will be able to use the same tools applicable for the purposes of reporting French FTT and Spanish FTT. Further details will be shared in due course.
Deadline for submitting declarations
Customers are required to submit their declaration files to Clearstream Banking by the second business day of the month, following the month in which the reportable transfer was settled.
Fees and penalties
AthexCSD has announced that a fee of EUR 100 will be charged per late submission of the sales tax declaration file.
In addition to the above fee applied by AthexCSD, the Greek Tax Authorities have announced that a fee ranging from EUR 100 to EUR 2500 will be applied in case of missing submission, late submission of declarations, in case of incomplete information provided by the taxpayer and in other cases in accordance with the art. 54 of the Law 4174/2013.
In addition to this fee, in case of late payment of the due tax amount, the taxpayer is obliged to pay interests on that amount for the period between the expiration date and the settlement date, as foreseen in art. 53 of the Law 4174/2013.
However, in case of recurrence of the same violation within five years, the fine can raise up to four times the original tax amount.
If the tax amount declared is less than the amount assessed by the tax administration, the tax person is liable to a fine up to 50% of the amount of the difference (art. 58 of the Law 4174/2013).
Any such charge incurred by Clearstream Banking in the Greek sales tax process will be passed on to the relevant customer on an “upon receipt” basis.
Exemptions from Greek sales tax
Pursuant to the Greek law, several exemptions from the Greek sales tax have been inserted through various legislative texts. These exemptions are provided for information purposes only. It is the responsibility of the customer to determine the eligibility for exemption as relevant.
- Tax exemption due to transfer of another non-taxable product (Bonds, ETFs, DSS, Rights, ELPIS, ADR, Warrants);
- Transfer of securities with no change of beneficial ownership;
- Transfers of securities from a usufructuary to the legal owner for the establishment of a usufruct, as this does not constitute a transfer of securities per L. 4569/2018;
- Transfers of securities to or from a Joint Investor Share scheme;
- Transfer of securities by Special Negotiators in the framework of transactions involving Mutual Funds (Decision 1121862/10014/Β0012/18.1.2008);
- Transactions involving transfer of securities to and from the International Finance Corporation (Chapter 9 Art. VI of L.3759/1957 and Individual Administrative Decision 3/2017);
- Transactions involving transfer of securities to and from the European Bank of Reconstruction and Development (Art. 26 L.4416/2016);
- Transfer of securities to a foreign exchange market, to the extent that the Greek exchange market has a common settlement mechanism with that foreign exchange market and an equivalent FTT is levied on the foreign jurisdiction (Art. 16 L.3842/2010);
- Exemption from the imposition of FTT based on decision by the Ministry of Finance (cases of transposition or contribution of shares in case of a share capital increase);
- Transfer of shares due to Donation/Parental Benefit or inheritance.
Retention and disclosure of documentary evidence
Documentary evidence of details of all transactions and, where applicable, proof of exemption must be retained by the customers and must be submitted upon request from Clearstream Banking or Greek Tax Authorities. By holding Greek securities in an account with Clearstream Banking, customers will be deemed to appoint Clearstream Banking and Clearstream Banking's depository for Greek securities as their attorneys-in-fact for the purpose of providing the information to the Greek Tax authorities, if requested by the latter.
Roles and responsibilities
With regard to reportable transfers for which the customers are responsible, neither the content nor the accuracy of the reports will be assessed by Clearstream Banking and the customers will assume the full responsibility of the accuracy of the return.
Note: This Announcement is provided for information purposes only and does not aim to give any legal or tax advice. Clearstream Banking strongly recommends that customers assess whether and how their business is impacted.
Clearstream Banking therefore makes no guarantees, representations or warranties and accepts no responsibility or liability whatsoever as to the veracity, accuracy or completeness of these documents and under no circumstances will be liable for any loss or damage caused by reliance on any opinion, advice, statement made or any information provided in this document.
It is the responsibility of the Clearstream Banking customer to fulfil all requirements and obligations that result from the introduction of the Greek Sales Tax and customers acting on behalf of their clients should analyses whether and how to support the processing of the Sales Tax for their clients.
To comply with all the requirements of the new law, customers are requested, before instructing an actual transaction, to secure the advice and guidance of a professional tax advisor who is familiar with the relevant facts.
The customer is deemed to indemnify Clearstream Banking for any taxes, penalties, interest thereon and other costs that Clearstream Banking may incur as a result of Clearstream Banking's reliance on the information reported by the customer to Clearstream Banking, including the amount of sales tax indicated by the customer or the claim to be entitled to exemption from sales tax.
For further information, please contact Clearstream Banking Client Services or your Relationship Officer.
1. Clearstream Banking refers collectively to Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248, and Clearstream Banking AG (for Clearstream Banking AG customers using Creation Accounts), registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500.