According to Law 1607/2012, the profits transferred by a branch or a PE to a related company abroad are considered dividends. Therefore, if the profits were not taxed at the branch or PE level, they are subject to withholding tax at a rate of 33 %. Nonetheless, if the profits were taxed at the branch or PE level, there is no additional tax on their transfer.
According to the tax code, the (deemed) dividends are deemed to be perceived by the foreign company when the PE effectively transfers the profits.
Prior to the 2012 Tax reform, profits transferred by a branch to foreign companies were not included in the definition of dividends. As a result, they were not subject to any additional tax, even if they had not been taxed at the level of the branch.