A. GENERAL
Regarding the Registry of Rightful Proprietors as per Greek Law 4557-2018 in Greece, as well as the under number 67343 ΕΞ 2019 decision of the Minister of Finance of Greece, please have a look – for your information – at the article we have posted on our web-page
https://www.oikonomakislaw.com/el/mitrwo-pragmatikwn-dikaiouxwn-tou-n-4557-201/
B. CLARIFICATION OF CERTAIN SIMPLE TERMS
- Legal Owner is supposed to be the owner of the shares or of the corporate capital shares, the way he/ she has been officially registered with the Greek Authorities
- Beneficial Owner is supposed to be the rightful proprietor of the shares or of the corporate capital shares, the way he/ she has been registered according to the provisions of Greek Law 4557/2018 regarding the Registry of Rightful Proprietors in Greece
- Beneficial Owner of a Bank Account is supposed to be the Beneficial Owner of the shares or of the corporate capital shares (Beneficial Owner), i.e. the one who according to Law must be notified to the Bank, both in the beginning as well as during the contractual relationship with the Bank, as per the existing legislative and statutory framework regarding the prevention of making use of the financial system in order to legalize income from criminal activities, and of the funding of terrorism, and the framework regarding the international tax compliance and the automatic exchange of information on financial accounts within which the Bank operates
- Guardian and/ or Nominee of these shares/ or capital shares (Nominee Shareholder) is supposedly the one handling all shares or capital shares on behalf of the Beneficial Owner
- Third Natural or Legal Person is the Straw Man who operates in the forefront as a the proprietor of the shares or the capital shares on behalf of a third party (bearing, in the end, the responsibility as such according to article 1 and 687 paragraph 3 of the Commercial Law of Greece, article 211 of the Civil Code of Geeeceon direct representation, and articles 713 and 714 on mandate and responsibility born by the Assignee as properly adjusted to the aforementioned provisions of the aforementioned Commercial Law in light of preserving the safety of transactions)
- Source of Money constitutes the obligation of the tax payers in Greece to prove the sources of acquiring properties among which shares and capital shares
- Tax avoidance constitutes the ways of offensive tax planning in order to artificially diminish tax obligations
- Tax evasion constitutes the conscientious exploitation of the weaknesses of both the international and national tax system in order to avoid and, in the end, diminish the tax burden. However, tax evasion practically identifies itself with the outcomes of tax avoidance: the deprivation of natural funds from Pubic Finance as well as the disproportional financial benefit of tax payers
- Artificial Settlement constitutes the part of the General Rule of Law against Tax Avoidance. In particular, when estimating tax, the Greek Tax Authority may ignore any artificial arrangement or line of arrangements that could nd up in the avoidance of taxation and thus, in getting a taxation advantage. These certain arrangements could be seen, in terms of tax purposes, by bringing forward the features of their financial state of being (article 38 paragraph 1 of the Greek Tax Law Code).
- COMPULSORY AUTOMATIC EXCHANGE INFORMATION TAX SECTOR (CRS / DAC2). Within the framework of constantly improving the international tax compliance status, and as per the provisions of the Greek Law under nr. 4428/2016 it was ratified by the Hellenic Republic the Multimember Agreement of Competent Authorities of the Organization for Economic Co-operation and Development – OECD-, on the Automatic Exchange Information on Financial Accounts on an International Level, through the application of a universal standardized model of automatic exchange, the Common Reporting Standard Αναφοράς (CRS), on the deprivation of tax avoidance. Respectively on a European level, as per the Greek Law under nr. 4170/2013, as amended by Greek Law 4378/2016 and currently applicable, the european provisions of the EU Directive 2014/107/ΕΕ (DAC 2) have been incorporated in the Greek legal system, according to which the compulsory automatic exchange in the tax secore of the European Union has been adopted as per the CRS framework. The aforementioned provided legal status is to be applied both to natural and legal persons, and it aims to the transparency of the tax sector through the exchange of financial accounts’ data
- Joint Accounts form kind of the baking accounts as per Greek Law under nr. 5638/1932 having as special feature the existence of many beneficiaries, each of whom may in total or partially make use of the account, without the participation of the rest of the co-beneficiaries.
C. RANDOM QUESTIONS
- Have you notified the Bank with the details of the Beneficial Owner of the Bank Account of your company?
- Is he/ she the exact same person with the Legal Owner or/ and the Beneficial Owner of the Company?
- Is there a differentiation, distinction and/ or contradiction among the aforementioned?
- Could it be perceived that the Legal Owner operates as a Guardian and/ or Nominee of the shares or capital shares (Nominee Shareholder) on behalf of the Beneficial Owner, or as a Third Natural or Legal Person –Strawman of his/hers?
- Does the aforementioned situation constitute a lawful or not procedure and structure of the tax planning as per the provisions of the Greek Law, i.e. an Artificial Settlement?
- Could it be that relevant structures and related diversions regarding the role of persons to be perceived as plain tools to the end of tax avidance, tax evasion or even money laundering, by ending up in such ways into tax investigations or of the sort of Public Prosecutor’s ones?
- What should be the relevant line of defense in such investigations and allegations?
- Could the Registry operate as a mechanism of correlation between capital and its origins in a way that false corporate roles are disclosed as well as “ghost” companies?
- Could it operate so as to disclose efforts by shareholders who transfer unreasonably money from one company to the other by practically revealing in this way the operation of “shell companies”?
- Could it break the chain of impermissible financial transactions that happen to occur through shell companies?
- Could it reveal the cases of companies that proceed into triangular financial relationships, overcharging and undercharging?
- What’s the responsibility of the Beneficial Owner when he/ she does not coincide with the Legal Owner, how is the “Source of Money” question dealt with, what happens in case of tax responsibilities and charges, how is it verified and crosschecked his/ her financial status and his/ her banking obligations in terms of the Compulsory Automatic Exchange Information Tax Sector (CRS / DAC2)]?
- What happens in case of interference of the Joint Accounts?
Do you wish to have Legal Answers and Assistance with the aforementioned?
Please, do not hesitate to contact us; do let us know in written on your interest by contacting us at global@oikonomakislaw.com
