Greece mulls scrapping tax liability for foreign bondholders for 2012-13

ATHENS Fri May 16, 2014 10:46am EDT

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ATHENS May 16 (Reuters) - Greece plans to scrap the tax liability on capital gains for foreign holders of Greek bonds booked over 2012-13, to soothe investor fears that Athens was planning to collect the tax retroactively, two finance ministry sources told Reuters.

The government was forced to deny on Thursday that it instituted a retroactive tax on foreign holders of Greek bonds after a government tax circular helped push Greek 10 year-bonds to near two-month highs. It later revoked the document, but that failed to erase uncertainty over the liability.

"The government intends to scrap the law which imposes taxes on capital gains of foreign bondholders for 2012-13," a finance ministry official told Reuters on condition of anonymity.

A second official said the government was still deciding on the method by which it will scrap the liability, possibly through a new law.

(Reporting by Lefteris Papadimas, editing by Deepa Babington)
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