On 20 December 2017, the Independent Public Revenue Authority released official guidance (Ministerial Decision POL 1209/2017) on the definition of tax evasion, in line with article 66 of Law 4174/2013. Zepos & Yannopoulos, Taxand Greece, explains.
The guidance clarifies that the assessment of corporate income tax of an amount exceeding Euro 100,000, does not constitute tax evasion, to the extent that such assessment results from the readjustment of taxable profits, following:
(i) disallowance of ordinary business expenses, and/or
(ii) transfer pricing readjustments.
The guidance also refers to fictitious transactions, as an example of an intentional concealment of taxable income that may be treated as tax evasion, within the scope of article 66 of Law 4174/2013.
The guidance is expected to have a significant impact on the market, as it reduces the scope of application of (i) the 20-year Statute of Limitation, which applies in the event of tax evasion and (ii) legal provisions on criminal liabilities of BoD members of Greek corporations.