The government of Greece is considering the introduction of preliminary tax decisions, internationally known as Advance Tax Rulings (ATRs), as part of a broader strategy to improve tax certainty and predictability for businesses operating in the country. The move is intended to align Greece more closely with international best practices and to address long-standing concerns about uncertainty in the application of tax law.
The proposed framework aims to reduce the ambiguity that companies and investors often face when planning investments or structuring business transactions. By providing advance clarity on how tax rules will be applied to specific future arrangements, the authorities hope to foster a more stable and attractive environment for economic activity, particularly at a time when competitiveness and investment inflows are high on the policy agenda.
Advance Tax Rulings are not a new concept internationally. They have been in place for decades in several European countries, including Belgium, Germany and the Netherlands. In these jurisdictions, ATRs serve as a formal mechanism through which tax authorities provide an official, and usually binding, interpretation of tax legislation as it will apply to planned transactions. This allows taxpayers to proceed with greater confidence, knowing in advance how their activities will be taxed.
Rulings are issued at the request of the taxpayer and can cover a broad range of issues, from the taxation of intra-group transactions and transfer pricing arrangements to the application of tax incentives and exemptions. They are typically available not only to large multinational groups, but also to small and medium-sized enterprises and, in some cases, to individuals. Their key value lies in offering upfront certainty on tax treatment, rather than leaving critical questions to be resolved retrospectively through audits or litigation.
The International Monetary Fund has analysed the use of Advance Tax Rulings extensively, describing them as a hallmark of mature and well-functioning tax systems. According to the Fund, such rulings allow taxpayers to understand in advance how tax law will be applied in specific circumstances, significantly reducing the risk of future disputes with tax authorities and contributing to higher levels of voluntary tax compliance overall.
At the same time, the IMF has cautioned that the introduction of an ATR regime is not without risks. When rulings are kept confidential and are not subject to any form of publication, concerns may arise over transparency, potential revenue losses, or even the granting of selective advantages that could be construed as hidden state aid. To mitigate these risks, the Fund recommends the establishment of a clear legal framework, the handling of rulings by a specialised and centralised unit within the tax administration, and the publication of decisions in anonymised form. This approach is seen as essential to ensure equal access to information and to prevent preferential treatment.
Another critical element highlighted in international experience is the binding effect of Advance Tax Rulings. As commonly designed, they should bind the tax authority but not the taxpayer. This means that, provided the taxpayer complies with the conditions set out in the ruling, they are protected from additional taxes, penalties or surcharges, while still retaining the option not to proceed with the transaction if circumstances change. Careful calibration is also required in terms of the scope of rulings and the administrative burden involved, particularly in countries where tax administrations face capacity constraints.
Finally, the cross-border dimension of Advance Tax Rulings is increasingly important. Decisions issued in one country can have implications for the tax bases of others, especially in cases involving multinational groups. This makes cooperation and information exchange essential within frameworks developed by the European Union and the OECD, which seek to balance tax certainty with transparency and fair competition across jurisdictions.
