Greek Ministry of Finance is introducing new rules to enhance tax compliance

Date: 15th September 2020

The Greek Ministry of Finance is introducing new rules to enhance tax compliance and accelerate processes, boost the economy post covid-19 and strengthen an investor friendly business environment.

New Tax Dates of Critical Importance

September 2020

Tax legislation enacted recently, introduces new tax regimes, transposes EU legislation, and sets deadlines for actions by taxpayers that should potentially be complied with. In particular:

By September 30, 2020;

Change of tax residence; incentive measures for retirees to relocate to Greece

New income tax rules in place (the “Pensioners’ Regime”), providing that retirees, non-Greek residents, relocating to Greece may be subject to the flat rate of 7% for their non-Greek income earned annually for a period of 15 consecutive years; non-Greek income is further exempted from the payment of annual solidarity levy whilst any Greek income gained does not qualify for said special tax treatment and is subject to normal Greek tax rules (tax scale rates, solidarity levy, etc.).

To qualify for the Pensioners’ Regime, individuals should apply to this effect to Greek tax authorities by March 31 of the relevant tax year, be non-Greek residents in a country having an administrative cooperation agreement with Greece and for a period of 5 out of the last 6 years, and be entitled to pension income.

Especially for tax year 2020, the application above to the Greek tax authorities, may be filed by September 30, 2020 while a transitional regime is provided for retirees who have already transferred their tax residence in Greece during 2019 and wish to take advantage of the Pensioners’ Regime.

Note: The issue of Ministry of Finance implementing circulars is pending; nevertheless qualifying individuals interested in the Pensioners’ Regime should examine submission of an informal application by the lapse of
the deadline above to safeguard eligibility requirements.

By October 7, 2020;

Court hearing of tax cases that were irrevocably rejected due to non-payment of Court fees due

Parties to a tax dispute, brought before the Administrative Courts, may apply for the re-hearing of their tax case (which was irrevocably rejected by the Court, due to non-payment of Court fees due) provided: i) an application to this effect is filed with the Court within a period of 100 days as of 29.06.2020, and ii) Court fees due are paid before the hearing date set anew.

By December 31, 2020;

Out of Court Dispute Resolution procedures for tax disputes pending before the Supreme Court, the Administrative Courts, and the Dispute Resolution Committee

New rules in place introducing an Out of Court Dispute Resolution Committee (“OCDRC”) with specific powers and lifespan; An OCDRC is established and will operate up until May 28, 2021 to judge on petitions for tax disputes, following an electronic request to this effect submitted by the taxpayer.

Eligible tax disputes are those pending before the Supreme Court and the Administrative Courts that have not been heard by October 30, 2020. Tax disputes pending before the Dispute Resolution Committee by October 30, 2020 are also eligible provided a related court action is filed with the Administrative Courts by December 30, 2020.

Interested taxpayers should file their electronic request by December 31, 2020; Filing of the electronic request results in the suspension of the process before the Courts.

The OCDRC powers are limited and a judgement may be issued only for the following reasons:

• The tax assessment was issued following the lapse of the statute of limitations time period for its issue;
• The tax assessment was issued against the statute of limitations time period provided for taxpayers who received a statutory auditor’s tax report with no reservation;
• The tax assessment was issued based on incorrect calculations or by mistake;
• A beneficial tax treatment may be claimed with retroactive effect; and
• A reduction in the amount of penalties, interest and additional charges may be claimed.

Electronic requests that are not examined by May 28, 2020 are deemed rejected. An OCDRC judgement issued is binding on the taxpayer (and ends the process before the Courts), if explicitly accepted by the taxpayer and payment of an amount corresponding to 30% of the total assessment amount is paid within a period of 5 days as of acceptance. Payment of the remaining amount may be effected in installments; reduction in the amount of penalties, interest and additional charges due is further provided for.

In the event the OCDRC judgment does not prove binding, or no judgement is issued, the process before the Courts continues.

By January 30, 2021;

Reporting under DAC6; Mandatory reporting of cross-border arrangements that may entail a tax avoidance (or tax evasion) risk

New rules in place implementing as of July 1, 2020, Dir 2018/822/EU (amending Dir 2011/16/EU) and Dir 2020/876/EU; Intermediaries and/or taxpayers have an obligation to report to local tax authorities crossborder arrangements that may entail a tax avoidance (or tax evasion) risk; Legislation enacted aims at providing tax authorities with an early warning mechanism on new risks of tax avoidance and thereby enable them to carry out audits more effectively. Information acquired locally is thereafter exchanged between Member States; Reporting obligation has a retroactive effect and goes back to reportable crossborder arrangements as of June 25, 2018. VAT and custom/ excise duties are excluded from the scope of
application of the new rules.

Arrangements are reportable if they meet the following criteria:

i) are cross-border; participants reside in different Member States or a Member State and a third country is involved, and

ii) meet specific hallmarks; i.e. specific characteristics considered to involve a tax avoidance risk. Two subcategories are further established; category A includes generic hallmarks while category B includes specific hallmarks. Arrangements falling within category A may lead to a reporting obligation only if they further meet the “Main Benefit” test, i.e. only if one of main objectives of the arrangement is to obtain a tax advantage.

Reportable arrangements are being reported by:

(a) intermediaries; either any person that designs, markets, organises or makes available for implementation or manages the implementation of a reportable cross-border arrangement is an intermediary, or any person that provides, directly or by means of other persons, aid, assistance or advice
with respect to designing, marketing, organising, making available for implementation or managing the implementation of a reportable cross-border arrangement; or

s.anagnostou@lambadarioslaw.gr(b) the taxpayer, in the event the intermediary is a non-EU intermediary, when no intermediary is involved, or when the taxpayer is notified that an intermediary has the right to a waiver due to legal professional privilege.

It is noted that Greece opted for adopting the waiver provided for in the directive, and ruled that intermediaries operating within the limits of the Greek law regulating the lawyers’ profession are exempted from reporting, where reporting would result in breach of the attorney-client privilege.

Reporting of cross-border arrangements should generally take place:

within a period of 30 days from the time they either become available for implementation, or implementation starts, or advice/ assistance for implementation is provided for. Member States exchange reported information quarterly, within a month from the lapse of relative quarter.

Exceptionally:

• cross-border arrangements, that started being implemented, or made available for implementation, or for which advice/ assistance for implementation was provided – during the period July 1, 2020 – December 31, 2020, should be reported by January 30, 2021;
• cross-border arrangements, that started being implemented during the period June 25, 2018 – June 30, 2020, should be reported by February 28, 2021; and
• the first information will be exchanged by Greek Tax Authorities by April 30, 2021.

For any questions and further information on the above, please feel free to reach out to Smaro Anagnostou at s.anagnostou@lambadarioslaw.gr and Melina Katsimi at m.katsimi@lambadarioslaw.gr.