Greece has repealed a 26 percent withholding tax on business transactions with Cyprus following pressure from the European Commission. The tax, which was introduced by Greece in March, applied to transactions with Bulgaria, Cyprus, and Ireland – territories that were targeted due to their low corporate tax rates.
The European Commission concluded that the levy contravened EU law principles on the free movement of goods and free provision of services. Subsequently Greece was sent a reasoned opinion, which requested that it amend its law to bring it into line with EU law.
Greek lawmakers agreed to repeal this levy as part of the country’s third bailout, which was recently agreed by Greece’s Parliament and EU finance ministers.