* 10-year bond yields rose to two-month high
* Govt says revokes government circular that spooked
* Govt says document tried to clarify previous regime
(Adds finance ministry statement)
By Lefteris Papadimas
ATHENS, May 15 Greece's government on Thursday
denied it had instituted a retroactive tax on foreign holders of
Greek bonds, and revoked a tax document that spooked investors
and sent yields to near two-month highs.
Traders cited a document detailing a retroactive tax on
non-resident holders of Greek bonds as the reason for Greek
10-year bond yields shooting up.
Greek officials, however, said that document - a government
circular - had only sought to clarify that the previous tax
regime of 33 percent on foreign legal entities and 20 percent on
individuals had been abolished starting this year.
A finance ministry official had said the document was
"probably misinterpreted" but the ministry later in a statement
said it had revoked the document. It did not provide details
clarifying the impact of the withdrawal.
In an effort to make Greek bonds attractive to foreign
investors, the Greek government passed a law in March scrapping
taxation on capital gains from Greek bonds from the start of
"There is no taxation on capital gains from transfers of
Greek government bonds by foreign investors that took place from
January 1, 2014 onwards," a statement from the finance ministry
said, confirming what finance ministry officials told Reuters
earlier on Thursday.
"Consequently, the reports referring to retroactive taxation
or intention for retroactive taxation are completely untrue."
Greek 10-year yields rose as high as 6.84 percent, up 53
basis points on the day.
A copy of the document published on the Deutsche Boerse
website and seen by Reuters was last updated on May 5.
Greece returned to international bond markets in April,
raising 3 billion euros ($4.11 billion) through the sale of a
five-year bond, its first since the country plunged into a debt
crisis in 2010.
It is also considering tapping bond markets again in the
next 12 months to raise between 3 and 6 billion euros.
($1 = 0.73 euro)
(Writing by Deepa Babington; Editing by Andrew Roche and Eric