What’s new in the fight against tax evasion in Greece and internationally


The economic crisis and political uncertainty, over-taxation in others, the ease of transferring funds internationally, banking secrecy and the creation of "tax havens" by states seeking to attract wealth, have all been factors that in recent years have led to an increase in tax evasion on a global scale.

Offshore companies, trusts, foundations, investment and insurance products, and the transfer of the 'tax residence” in countries with little or no taxation, along with deposits in overseas banks, were and still are vehicles for concealment of income and wealth.

The evasion of taxable material to tax havens was more pronounced from countries where property tax (wealth tax) exists or there were indications of its upcoming application.

Following the financial crisis in 2008 and a series of scandals, it was almost a world priority to fight against tax evasion on the initiative of both the OECD and the European Union. The result of these efforts is to establish uniform rules for the exchange of information between states on the financial accounts of natural persons and companies / entities both between EU Member States and with OECD member countries.

Greece, after the incorporation of Directive 2014/107 / EU, with Law No. 4378/2016 on the exchange of information in the field of taxation, it has ratified Law 4428/2016 the "Multilateral Agreement of Principles for the Automatic Exchange of Financial Accounts Information" and at the same time incorporated in Greek law OECD’s "Common Standard of Reference" on reporting rules by banks, brokerage and insurance companies, collective investment institutions, etc.

Also, with the recent Law 4493/2017 ratified the agreement with the USA to provide information on financial data for American taxpayers in Greece, while the laws 4484/2017 and 4490/2017 integrated EU directives and the OECD for the exchange of information by country by the parent companies of the large multinational groups.

Simply put, the aforementioned regulatory grid largely means the end of banking secrecy, since any bank account now either belongs to an individual or belongs to an offshore company or trust or institution or other entity, will be declared.

In particular, since the end of September 2017, the Greek supervisory authority should have received data not only from EU Member States, but also from third countries such as the Isle of Man, Jersey, Liechtenstein, and in 2018 will receive data from countries such as Switzerland, Monaco, the Bahamas and others.

These data will be transferred on a yearly basis and refer to bank account balances, custodian accounts, interest, dividends, insurance returns and capital gains. Transferring data authorities, such as banks, brokerage firms, etc., are required to identify the real beneficiaries, shareholders / companies, trusts, institutions and other entities.

Information includes, among other things, the name, address, VAT number, date and place of birth of each "Registered Person" who is the beneficiary of the account or the owner of a company or entity. In our country the CRS / DAC2 Data Submission System has already been put into operation. According to that, the banks will submit the above and the relevant circulars 1130/17, 1140/17 and 1137/17 have already been issued. The automatic exchange of information, in addition to abolishing bank secrecy, marks the limitation of "tax havens" and the need to revise the tax strategy of individuals and companies.

It is obvious that tax evasion will not be eliminated immediately, but it is clear that the audit authorities of most states (over 100 have agreed to cooperate) will now have significant ammunition for this battle and it remains to be seen how effectively they will put them to use.

G. Samothrakis, J. Panou
Posted on Sunday newspaper Kathimerini, 06/11/2017

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