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Looming deadline for Voluntary Tax Disclosure

04/09/2017

As the deadline for Voluntary Tax Disclosure based on Law 4446/16 approaches (the 30th of September 2017), taxpayers are called to decide whether to make use of it and take into consideration some serious factors.

This regulation covers every tax, levy or levy obligation, but also to any informative statement, provided that the deadline for submission of the original declaration expired by 30 September 2016.

In order for taxpayers, natural or legal persons, to decide whether to take advantage of the law, they should take into account the upgraded data collection capabilities of the tax authorities and the consequences of tax evasion.

Undeclared income that is revealed by tax auditing and considered an "unwarranted increase in wealth" will be subject to taxes and surcharges of 90-100% of these incomes, while the possibility of criminal prosecution should not be ignored.

On the other hand, taxes and surcharges for cases of hidden income, to be disclosed voluntarily, range from 45% to 55%, along with the solidarity levy, depending on the year in which the tax liability arose. They are significantly smaller in the case of inheritances, donations or parental benefits.

Taxpayers should take into account the following:

(a)
Tax audits, particularly of natural persons, have been intensified of late and are accompanied by the opening of bank accounts, to which the tax authority now has direct access. This means that the taxpayer may be called upon to justify a plethora, in many cases hundreds, of deposits or withdrawals / payments, and to provide supporting documents, such as contracts, invoices, receipts, etc. Often, the audit is also extended to the co-beneficiaries of the audited bank's accounts, as well as counterparties to whom significant payments have been made by checks or remittances, such as suppliers, manufacturers, contractors, etc.

(b)
The tax authorities will soon be able to obtain information through the "Automatic Information Exchange" for bank deposits, offshore companies, trusts, financial products, etc. of Greek taxpayers in more than 80 countries. In particular, as of September 2017, the tax authorities will have access to the names of Greek depositors in many countries, such as Cyprus, Malta, Luxembourg, Romania, whereas in others, such as Switzerland, Monaco, Singapore, Saudi Arabia, in 2018. Attention is also drawn to cases where foreign taxpayers' deposits (from taxable income declared or exempted) may be justified, but no revenue, has been declared in Greece, such as dividends, interest or capital gains that have been incurred for a number of years from their deposits / investments abroad. The argument that the aforementioned have been taxed in the country where they occurred is not valid, since for these incomes, in most cases, there is an obligation to declare and tax them in Greece with the possibility, subject to conditions, of deduction of the tax paid abroad.

(c)
Concerning tax years exempt from audits due to limitation, following the recent ruling by the Council of State, the authorities’ view is that if new evidence emerges, for example, from the opening of bank accounts or inaccuracy in a tax return already submitted, the limitation period is ten years.

What sort of data may be considered as new evidence and justify the 10-year limitation period will be clarified by the Council of State with a new ruling, expected to be issued shortly.

The experienced and expert team of AS network accountants, lawyers, tax advisors and consultants will guide you safely and in full compliance with the Greek law to the best choices for you and your business, covering most effectively every need in the present and providing for the challenges of the future!

G. Samothrakis, Tz. Panou
Posted on Sunday newspaper Kathimerini, 03/09/2017