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Revival of 2010 Tax Amnesty Scheme to Benefit Economy
The Greek Tax Amnesty Law has been resurrected, and offers enterprises the option to settle their unaudited fiscal years ending 31 December 2009. The scheme applies to companies whose fiscal year ends on or prior to 31 December 2009. Businesses with fiscal years ending after 31 December 2009, will not benefit from this scheme. However unlike 2010, the revised tax amnesty scheme is available to a wider circle of enterprises, namely, enterprises with reported annual gross revenues in excess of EUR 20 million but not more than EUR 40 million. It is also available to enterprises whose shares are listed on the Athens Stock Exchange. Taxand Greece discusses the revival of the 2010 tax amnesty scheme and specifically how it will be calculated.
Taxpayers wishing to take advantage of the revised tax amnesty scheme must accept the calculation of the additional tax liability as set out in the relevant settlement Clearance Notes, within five (5) days as from the official service. Taxpayers may file on their initiative a relevant clearance note settlement, in order to apply this scheme. The relevant procedure is not in place yet and is expected to be clarified soon by a Ministerial Decision. Taxpayers also have the right to submit Settlement Clearance Notes until 31 October 2011, before the initiation of a tax audit. The tax amnesty scheme does not apply to shipping tax, real estate tax, large real estate tax, real estate duty, special real estate tax, real estate transfer tax, or inheritance and gift tax.
The statutory settlement is based on the assessment of an additional amount of tax (the tax already assessed on the basis of the relevant tax return(s) is not offset or deducted), which is calculated by a fairly complex method and is offered to the taxpayer on a 'take-it-or-leave-it' basis, as follows:
A 2% tax disallowance rate is applied to reported gross revenues. Then the resulting amount is multiplied by a special progressive rate (depending on the level of gross revenues). Income tax is then levied on the resultant amount at a rate of 20% or 25% (especially for Greek corporate entities, i.e. A.E.s and E.P.E.s).
Certain aggravating factors (i.e. certain serious infringements of the Greek Code of Books & Records, the concealment of taxable items, or the failure to file an annual VAT return) will be taken into account in the relevant calculation and will increase the amount of tax due. There is a minimum amount of tax to be assessed for each settled fiscal year, irrespective of the result of the calculation and depending on the category of fiscal books kept by the enterprise and on the nature of the companies' business (i.e. free lancers or other enterprises etc.) thereof (i.e. EUR 300, EUR 500, EUR 700, and EUR 1.000). Tax losses reported in connection with the last settled fiscal year cannot be carried forward to subsequent fiscal years if, in the last fiscal year to be settled under the scheme or in the four previous fiscal years, the concealment of taxable items or certain serious infringements of the Code of Books & Records took place. No offset of the four previous fiscal years' tax losses can be made if serious tax violations took place.
Settlement of unaudited VAT cases may require certain adjustments resulting in the payment of additional VAT, e.g. if concealment of taxable items has taken place. The credit VAT balance reported in the last settled fiscal year and transferred to the subsequent unaudited fiscal year may be verified in the course of a preliminary tax audit under certain conditions, and if the enterprise has concealed taxable items or committed certain serious infringements of the Code of Books & Records, the credit VAT balance reported in the last settled fiscal year will be added to the overall tax liability and any refund of such balance will be cancelled.
The activation of the tax amnesty scheme presupposes a down payment of 20% of the total amount of tax assessed under the scheme, while payment of the remaining 80% may be made in several equal monthly instalments, depending on the amount due, with a further 10% discount applying if the tax due is paid in a lump sum.
With this new tax amnesty scheme being opened up to a wider circle of enterprises, the Greek government hopes to collect a large amount of revenue from unaudited fiscal years. This additional revenue will help boost the Greek economy.
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