Reduction of company taxes

The Ministry of Finance is focusing on tax fraud hunting. The tax bill approved by the cabinet provides that:
-The crime of non-use of VAT and tax withholding is turned from instant to lasting. This practically means that anyone found not to have accounted for VAT on any level can be arrested and put on trial.
- The offense of not returning overdue debts to the State, if the delay exceeds a reasonable time (eg. 6 to 8 months), is converted to a lasting offense. The same process applies as above.
-Suspension or modification of the sentence is not allowed in tax evasion crimes, if outstanding taxes have not been paid to the State.
-Appealing against a primary decision does not suspend the enforcement of the penalty and suspension of the execution of the penalty is not allowed if taxes have not previously been paid in full.
-In fiscal crimes classified as felonies, besides the usual caveats (financial security, a ban on leaving the country, etc), temporary detention may also be imposed since the law rules that if released, the individual might be likely to commit similar crimes.

Also introduced are:
-A three-year program to combat tax evasion, which is going to define concrete actions and fiscally measurable targets. The first Operational Programme will be published in late February and will come into effect in March. The program will be adopted by decision of the Intergovernmental Panel on combating tax evasion.
-The appointment of the Attorney General for Fiscal Crimes, who will hold a seat in the Financial Crime Division.

Who will be targeted

The focus of targeted checks will come primarily from established professionals who declare very low incomes, in specific professional sectors, especially traders who pursue the professions of medicine, dentistry, veterinary surgeons, lawyers, architects, engineers, surveyors, economists, business consultants, accountants or tax accountants, if their net income does not exceed 25000 euros, and they are based in cities with a population of over two hundred thousand inhabitants, 20000 euros for cities with more than fifty thousand residents and 15000 euros for cities less than fifty thousand residents, all subject to priority review by the supervisory authorities.

In addition, there are:
-Gains from the sale of listed shares. The rate is increased from 1.5% to 2% for sales of shares held either within the Athens Stock Exchange (ASE) or foreign stock, from 1/1/2011 and any time after that. Furthermore, expressly provided is the fact that on any shares acquired from 1/1/2012 onwards, there is not Trade tax levied, but provisions of taxation of capital gains still apply.
-Taxation of legal persons (SA, Ltd) and dividends. Starting from 1/1/2011, the tax rate is reduced from 24% to 20% and applies to all earnings. On the matter of distributed profit there is a scaling of tax withholding to 25%. Dividends are included in the tax bracket, essentially though they avoid tax liability (20% on a level of legal persons and 25% on dividends withholding), for the majority of shareholders. For those with low incomes there is a provision on refunding of the withheld dividends tax.
-An increase of the percentage of approval from 25% to 50%. If there is no administrative settlement, and this results in an appeal to the courts for tax difference, the rate increases from 25% to 50% of the disputed principal tax. The fine remains at 25% after key provisions for conciliation at one third.
-Receipt card. For the convenience of record-keeping by taxpayers in order to reach the amount of required evidence, an alternative system shall record the particulars of receipts of retail sales or services through a magnetic card that is anonymous and not obligatory.
Tax secrecy is removed, and the Minister of Finance can publicize any information he or she sees fit to divulge:
-On State debtors, if they have outstanding debts and delayed payments for periods exceeding one year, and if the amount owed exceeds a certain limit (eg 150000 euros)
-On offenders of the Financial Books and Data Code, if there exists an infringement of false or fictitious registration and information or falsification of data or inaccurate registration data that point to tax evasion, or false entries in market entry books.

A Procedure for the separation of arrears to the state’s collection initiative and not susceptible to failure of collection:
The inclusion of the category of overdue payments is made after an accordance decision by the Court and after a consultation of officials and the lapse of thirty days from the publication of the list of integration into the Internet category of “uncollectible” debt. In any case, the failure to recover will not be deleted. At the end of each year, decisions of the Special Court will be merged within a submission to Parliament. The debts identified as not liable to be recovered will be these for which all necessary steps to identifying sources of repayment and enforcements of debts, will have been exhausted.

Refereed resolution of tax disputes
A special House of Tax Referees (SFD) will be introduced as an independent authority established in Athens. The work of the SFD will be the settlement of tax disputes through arbitration, if the object in question exceeds the sum of one hundred and fifty thousand euros. Tax referees are appointed persons of recognized standing and professional competence.
The dispute will be settled by three arbitrators. The chairman of the arbitrators and the arbitrators appointed by the Chairman will hold hearings going by alphabetical order of surnames. The arbitration hearing for resolving the dispute cannot take place more than two months after the receipt of a positive declaration of the State for an arbitrary settlement.
Submission of VAT returns and payment of due taxes will have to be made in 6 monthly installments: The possibility of receiving periodic VAT returns without paying the whole amount due. Specifically, when a statement is made of at least 40% of the total due amount and the remaining 60% of the unpaid balance, which is due to the late collection, the rate will be increased by 1% and will be paid in two equal monthly installments. The installment should not be less than 300 euros.

A certificate of VAT under supervision can be paid in 6 installments. The possibility of having VAT payments in 6 installments is established after following an administrative settlement or on a finalized transaction through the non-application and final action of determination of tax proceedings or repealed taxes.