In short: the application of tax law in Greece
Compliance with tax laws
How does the tax administration verify compliance with tax laws and ensure that taxes are paid on time? What is the usual procedure followed by the tax administration to examine a tax return and how long does the examination take?
Normally, when submitting a tax return, the tax is assessed without further action by the tax administration, either simultaneously with the submission of the tax return, or shortly thereafter in the case of returns. annual income tax. However, following a tax audit, the tax administration may issue a corrective tax notice, provided that the audit shows that the previously submitted tax declaration was inaccurate or erroneous.
If the taxpayer does not file a tax return despite their respective obligation, an estimated tax assessment can be issued unless the taxpayer files a late tax return.
In cases of extreme urgency, for example when there are indications that the taxpayer intends to leave the country, thus jeopardizing the collection of taxes due, in particular through the transfer of assets, The tax administration can issue a preventive tax notice before the date of filing the respective tax declaration. In such a case, the taxpayer either pays the tax indicated on the preventive tax notice at a flat rate or guarantees payment by constituting a guarantee or by accepting a real estate pledge for the benefit of the tax authorities for the total amount of the tax. tax payable. .
Types of taxpayers
Are the different types of taxpayers subject to different reporting obligations? Can they be subject to different types of review?
Different types of taxpayers are subject to different reporting requirements. Employees and retirees are subject to limited reporting and essentially annual income tax reporting. These individuals are usually audited if an unjustified increase in their assets is found (usually following an audit of their bank accounts). Individuals of a certain fortune are audited by a special audit center.
Companies (natural or legal persons) are subject to reinforced reporting standards, which imply the keeping of accounting books on the basis of the principle of simplified or double-entry accounting. Although efforts have been made to reduce the number of reports required, Greece remains a country with complex and intensive requirements. Companies are also subject to various tax audits, including, for example, a full audit, a partial audit (for a certain tax item), and an audit for VAT refunds.
Over the past year, the Greek tax authorities have developed a digital platform (named myDATA), which in the near future will allow businesses to keep e-books and record invoice and tax receipt data. Said platform is announced and is expected to be implemented by the end of 2021.
What types of information can the tax administration request from taxpayers? Can the tax administration question the taxpayer or his employees? If so, are there any restrictions?
Upon written request from the tax authorities, the taxpayer is required to provide copies of his books and records or any other related document for the determination of the tax liability of the taxpayer, including the lists of customers and suppliers, as well as any other information, within five working days of notification of the request. There is also an obligation for certain third parties (for example, banks, undertakings for collective investment in transferable securities and notaries) to provide the tax authorities with all the requested information in their possession concerning the taxpayer within 10 days. , with the exception of information and documents. In the case of data and information in a foreign language, an official translation into Greek must be submitted.
Interviews with the taxpayer or his employees are not required by Greek tax law. However, in practice, during a tax audit, the auditors can discuss with the taxpayer the questions raised by the audit. In addition, before the notification of the final assessment, the tax control authority is obliged to inform the taxpayer of its preliminary findings and to request the taxpayer’s written position.
Agency action available
What actions can agencies take if the taxpayer does not provide the required information?
Failure to respond to requests from the tax administration to provide the required information constitutes a procedural failure and a penalty is imposed on the taxpayer. In addition, if the information not provided refers to the business books and records kept and issued by the taxpayer, the tax administration may use indirect methods to determine taxable income by calculating the gross income and outflows of the taxpayer on the basis of generally accepted principles and techniques. audit. These methods include analyzing the taxpayer’s liquidity; the net position of the ratio between the selling price and the total turnover; and the amount of bank deposits and cash expenditures.
Collection of overdue payments
How can the tax administration collect overdue tax payments as a result of a tax audit?
As soon as the tax is notified to the taxpayer, the tax administration issues the taxpayer a payment notice before taking any coercive action. In the event of non-payment of the amount due within 30 days of notification of the payment notice, the tax administration may proceed (without a court decision) to the imposition of a seizure on the movable property, immovable property, property rights, claims and, in general, to all the assets of the debtor or, in the case where the debtor is a legal person, to all the assets of administrators jointly and severally liable (the latter is applicable under the conditions provided for by law). Based on the above conditions, the tax administration may also take appropriate interim measures.
Failure to pay the tax due for a period exceeding four months is a criminal offense (a misdemeanor – this is the failure to pay taxes above 100,000 â¬).
Under what circumstances can the tax administration impose penalties?
The tax authorities may impose penalties for violations of Greek tax law. These sanctions distinguish between sanctions for procedural infringements and sanctions for infringements observed following an audit by the tax administration.
Procedural offenses include (indicative):
- the non-presentation or late submission of an informational declaration or a tax declaration or a declaration of withholding at source;
- failure to comply with a request from the tax administration for the provision of information or data;
- non-cooperation during a tax audit;
- failure to notify the tax administration of the appointment of a tax representative;
- non-registration in the tax register; and
- failure to comply with an obligation to keep books and deliver records according to Greek accounting standards, among others.
The offenses observed following a tax administration check include (for information only):
- filing an inaccurate tax return;
- failure to file a tax return;
- non-payment of VAT;
- non-issuance of a tax file for a transaction subject to VAT;
- issuance of false tax statements;
- issuing and receiving fictitious tax files; and
- falsification of tax records, among others.
There are also special penalties for violations of transfer pricing legislation.
How are the penalties calculated?
The penalties for procedural offenses are fixed and depend on the simplified or complex accounting status of the taxpayer; that is, different penalties are imposed on taxpayers who are not required to keep accounting books and on those who are required to keep accounting books on the basis of simplified or double-entry accounting principles. The repetition of any offense within five years results in the imposition of a double penalty, while a quadruple penalty is imposed for a second repetition.
The penalties in the event of an infringement found following a control by the tax authorities depend on the amount of the difference and are calculated as a percentage of the value of the infringement, depending on whether it is the forgery. , the falsification and concealment of taxable income or the non-payment of taxes or the fraudulent reimbursement of taxes.
Penalties for violations of transfer pricing legislation are calculated as a percentage of declared gross profits.
What defenses are available if sanctions are imposed?
The taxpayer can raise any arguments concerning defects in the formal process of the tax act (for example procedural violations or a lack of competence), as well as contesting the basis or the reasoning of the imposition. Force majeure arguments are extremely difficult to prove, and reliance on the advice of a lawyer or accountant is prohibited.
Under a change in tax law, no penalty can be imposed on taxpayers if they have acted in accordance with the written instructions of the tax administration.
Are there any criminal consequences that can result from a tax review? Are they different for different types of taxpayers?
The legal provisions governing criminal tax evasion have been incorporated into the Greek Code of Tax Procedures, under which tax evasion is considered to be committed by persons who:
- intentionally avoid the payment of taxes (e.g. income tax, uniform property acquisition tax, special property tax, VAT, turnover tax, premium tax, withholding taxes and chargeable, costs or contributions, shipping tax) by not paying or paying unduly or reimbursing or compensating or deducting or withholding taxes at source; and
- intentionally issuing false or fictitious tax records as well as receiving fictitious tax records or modifying such records, whether or not they evade the payment of taxes.
In the Greek penal system, legal persons do not incur criminal liability. For this reason, natural persons who participate in the effective management, administration and representation of a legal person (either by exercising specific executive functions or by exercising de facto managerial functions) are considered to be the perpetrators or accomplices of tax fraud.
What is the recent record of law enforcement authorities?
Due to the covid-19 pandemic, uncollected taxes owed have increased significantly and reached around 109,085 billion euros at the end of April 2021 (latest available data).
Declaration date of the law
Indicate the date on which the above information is correct.
Aug 26, 2020