In a concerted effort to curb tax evasion, the Greek Parliament is gearing up for the submission of two crucial bills, the first of which is scheduled for this month. These legislative initiatives aim to harness the power of electronic tools and advanced technologies to combat tax evasion effectively. The impact of these tools has already been felt, with VAT revenues witnessing a substantial increase of 2 billion euros since 2019. This surge can be attributed primarily to electronic transactions, along with other innovative measures like electronic books and sophisticated data analysis methods that have exposed tax evaders who were previously slipping under the radar.
The second bill, currently under meticulous scrutiny by officials at the Ministry of Finance, focuses on the identification of professionals who declare incomes below 10,000 euros. Importantly, it should be noted that the Minister of National Economy and Finance, Kotsis Hatzidakis, has clarified that the tax rates for professionals will remain unchanged. Instead, a new system will be devised to identify those individuals who declare low incomes and effectively evade taxes.
Hatzidakis explained, "There is an issue of dealing with tax evasion; therefore, the system we will adopt will compel those who are evading today, not because tax rates will increase, but because there will be a system in place." He further emphasised the alarming statistic that six out of ten professionals declare incomes below €10,000. In essence, this means that six out of ten professionals declare an income lower than that of their employees, assuming they have employees, who are paid the minimum wage—a situation that defies common sense.
The draft law on tax evasion encompasses several key measures aimed at fortifying Greece's efforts to combat this pervasive issue:
- Expansion of Point of Sale (POS) Usage: The use of POS devices will be extended to encompass more economic activities. Currently, POS devices are not mandatory in numerous business sectors, such as gyms, tutoring centres, car parks, and cinemas. This expansion of electronic payments aims to cover the entire retail market, reducing the use of cash in favour of digital transactions.
- Integration of Cash Registers with POS: By spring 2024, approximately 450,000 cash registers will be integrated with POS systems. This integration will streamline financial reporting and enhance transparency.
- Electronic Invoicing: Efforts are underway to implement electronic invoicing systematically. This shift promises faster tax refunds, a three-year statute of limitations on tax-related cases, and enhanced depreciation benefits for technology equipment. By mandating electronic invoicing, the government aims to minimize VAT fraud and the use of fictitious data.
- Digital Shipping Slips: Starting from January, all e-commerce data will be forwarded to the Independent Authority for Public Revenue (AADE). This real-time data sharing will facilitate better control over the movement of products, including those in the construction and agricultural sectors.
- Welfare Benefits via Credit Cards: The government plans to provide welfare benefits primarily through credit cards, promoting digital financial transactions while ensuring the efficient distribution of social support.
- Penalties for Large Cash Transactions: A fine, equivalent to double the transaction value, will be imposed on cash transactions exceeding 500 euros. This measure discourages large cash transactions, promoting electronic payment methods.
- Electronic Payments for Real Estate: Effective from January 1, 2024, real estate purchases and sales will be conducted primarily through electronic payments. This move effectively reduces the use of cash in real estate transactions.
- VAT and Accommodation Tax for Airbnb Properties: As of January 1, 2024, VAT and accommodation tax will be levied on income derived from short-term rentals of three or more Airbnb properties. This taxation measure aims to bring Airbnb properties under the tax umbrella, ensuring fair and equitable contributions to the country's finances.
The forthcoming draft law on tax evasion in Greece represents a significant step forward in the battle against tax avoidance. With a comprehensive set of measures encompassing technology, transparency, and taxation reforms, Greece is poised to enhance its revenue collection while promoting fair fiscal practices across the board. The legislative proposals will undoubtedly be closely watched as they make their way through Parliament this October, with expectations running high for their positive impact on the country's financial health.
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