Overview

Legislation

What is the relevant legislation relating to tax administration and controversies? Aside from legislation, are there other binding rules for taxpayers and the tax authority?

The applicable legislation relating specifically to tax administration is the Code of Tax Procedure (L 4174/2013), which regulates, among other matters, the process of tax audits and controversies up to the stage of recourse to Greek courts, and the Code of Administrative Procedure (L 2690/1999), which is in general applicable to the relations of citizens and any public law entity. The applicable legislation relating to controversies with the Greek state (including tax controversies) is the Code of Administrative Courts Procedure (L 2717/1999).

Moreover, the Independent Authority for Public Revenues issues circulars that are binding on the tax authority for the interpretation and implementation of tax legislation. However, said circulars are not binding on taxpayers.

Greece has signed and ratified bilateral treaties for the avoidance of double taxation with a long list of countries in the areas of both income tax and inheritance tax. What is more, Greece deposited its instrument of ratification for the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting with the Organisation for Economic Co-operation and Development on 30 March 2021.

Relevant authority

What is the relevant tax authority and how is it organised?

Every tax authority falls under the jurisdiction of the Independent Authority for Public Revenues (in Greek: ΑΑΔΕ), which, as of 2017, is an independent authority, released from state control and monitoring. The Authority is governed by the administrative council, a governor and a European Commission expert. The European Commission has appointed two officials in the council.

The competent tax office is determined by the registered seat of the legal entity or the residence of the taxpayer. The three major cities (Athens, Piraeus and Thessaloniki) have separate tax offices for limited liability corporations (sociétés anonymes). For individuals who have their residence abroad, the competent tax office is determined by the residence of their tax representative. For non-Greek tax residents with an obligation to be registered in Greece, the Tax Office of non-Greek Residents (residents abroad) is competent.

For large enterprises and for individuals of a certain wealth, audit authority has been granted to specific audit centres in Athens and Thessaloniki. Pursuant to an already published announcement, six new audit centres will be established in summer 2022, four of which will operate in Athens and two in Thessaloniki.

Enforcement

Verification of compliance with tax laws

How does the tax authority verify compliance with the tax laws? Does this vary for different taxpayers or taxes?

Normally, on submission of a tax return, tax is assessed without further action by the tax authorities, either simultaneously with the submission of the tax return or shortly after in the case of annual income tax returns. However, following a tax audit, the tax authorities may issue a corrective tax assessment, provided that the audit shows that the previously submitted tax return was inaccurate or mistaken.

If the taxpayer does not file a tax return despite his or her respective obligation, an estimated tax assessment may be issued unless the taxpayer files a late tax return.

In extremely urgent cases, such as when there are indications that the taxpayer intends to leave the country, thus jeopardising the collection of taxes due, especially through the transfer of assets, the tax authorities may issue a preventative tax assessment prior to the date for submission of the respective tax return. In such a case, the taxpayer either pays the tax indicated on the preventative tax assessment as a lump sum or secures its payment by providing a guarantee or by accepting a lien of property in favour of the tax administration for the total amount of the tax liability.

Tax return review procedure and limitation periods

What is the typical procedure for the tax authority to review a tax return and how long does the review last? What limitation periods apply?

Different types of taxpayers are subject to different reporting requirements. Employees and pensioners are subject to limited reporting and essentially to an annual income tax return. Such individuals are usually subject to an audit if an unjustified increase in their assets is found (usually following an audit of their bank accounts). Individuals of a certain wealth are audited by a special audit centre.

Businesses (either individuals or legal entities) are subject to increased reporting standards, which involve maintaining accounting books on the basis of the simplified or double-entry accounting principle. Although efforts have been made to reduce the amount of reporting required, Greece is still a country of complicated and intensive requirements. Businesses are also subject to a variety of tax reviews, including, for example, full audit, partial audit (for a certain tax item) and audit for VAT refund.

Over the last year, Greek tax authorities have been developing a digital platform (named myDATA), which in the near future will enable businesses to maintain electronic books and record invoice and tax receipt data.

Tax authority requests for information

What types of information may the tax authority request from taxpayers? Can the tax authority interview the taxpayer or the taxpayer’s employees? If so, are there any restrictions?

Upon written request of the tax authorities, the taxpayer is obliged to provide copies of its books and records or any other related documents for the determination of the taxpayer's tax liability, including lists of customers and suppliers, as well as any other information, within five business days from the notification of the request. There is also an obligation for certain third parties (eg, banks, undertakings for collective investment in transferable securities and notaries) to provide the tax authorities with all the requested information they possess in relation to the taxpayer within 10 days, with the exception of privileged information and documents. In the case of data and information in a foreign language, an official translation in Greek should be submitted.

Interviews with the taxpayer or the taxpayer’s employees are not required by Greek tax legislation. However, in practice, during a tax audit, the auditors may discuss issues raised by the audit with the taxpayer. Additionally, before notification of the final assessment, the tax audit authority is obligated to inform the taxpayer of its preliminary findings and request the taxpayer’s written position.

Taxpayer failure to provide information

What actions may the tax authority take if the taxpayer does not provide the required information?

Failure to respond to requests by the tax administration to provide the required information constitutes a procedural infringement and a penalty is imposed on the taxpayer. Moreover, if the information not provided refers to the business books and records kept and issued by the taxpayer, the tax authorities may use indirect methods to determine the taxable income by calculating the taxpayer’s gross income and outflows on the basis of generally accepted principles and techniques of auditing. Such methods include analysis of the liquidity of the taxpayer; the net position of the relation between the sales price and the total turnover; and the amount of bank deposits and expenses in cash.

Protecting commercial information

How may taxpayers protect commercial information, including business secrets or professional advice, from disclosure? Is the tax authority subject to any restrictions concerning what it can do with the information disclosed?

Data concerning third parties in their transactions with taxpayers are not covered by professional secrecy and therefore there is an obligation to provide such data. However, professional secrecy may be lifted if written permission from the competent prosecutor for the granting of data covered by such secrecy is provided.

Employees of the tax administration are obliged to keep confidential all of the taxpayer’s data and information that they receive during the exercise of their duties (duty of confidentiality). If they fail to do so, they are personally liable (for both civil and criminal purposes).

In the case of outstanding debts of more than €150,000, the name of the taxpayer may be published without the taxpayer’s consent.

Limitation period for reviews

What limitation period applies to the review of tax returns?

As of 1 January 2014, the tax assessment may be issued within five years from the end of the tax year and may be extended under certain conditions, which were recently defined by the Greek Administrative Supreme Court.

By virtue of a recent amendment to tax legislation, the aforementioned five-year limitation period may be extended up to 10 years if new evidence comes to the knowledge of the tax authority after the five-year period or no tax return has been filed.

Alternative dispute resolution

What (if any) alternative dispute resolution (ADR) or settlement options are available

As of 1 January 2014, an administrative appeal is provided as an extrajudicial mandatory remedy for challenging any act or omission of the tax authority (administrative appeal is a precondition for the admissibility of the judicial appeal lodged before the competent administrative court). Thus, prior to any judicial review, a re-examination of the disputed act or omission is conducted by a special administrative authority specifically formed for this purpose: the Dispute Resolution Directorate (DRD). The administrative recourse may be submitted to the DRD within 30 days of the date of notification of the final corrective assessment act or other tax dispute, or 60 days for taxpayers residing abroad. The DRD must issue a decision within 120 days from the filing of the administrative appeal; otherwise, the appeal is considered tacitly rejected.

By virtue of L 4714/2020 (as recently amended) an Out-of-Court Tax Dispute Resolution Committee has been established, which however has limited application and time scope. This committee is authorised to review and resolve tax disputes pending before administrative courts, as well as the Supreme Administrative Court. For this purpose, any taxpayer in a pending tax may submit an application by 31 December 2022, provided that the dispute is pending, and no hearing has taken place as of 29 July 2022. The application before the committee may only contain the allegations that are specified in the law (including statute of limitations matters, obvious lack of tax liability or numerical error, retroactive application of the most favorable tax sanction principle etc). The committee, based on case – law criteria, may propose full or partial acceptance or rejection of the application and submit a specific proposal to the applicant taxpayer, who then has five working days to either accept or reject this proposal. In the case of acceptance by the applicant taxpayer of the Committee's proposal, the tax difference is finally and irrevocably resolved, without any objection to it and by any legal means. In the case of rejection, the suspended trial is continued.

Finally, since 2020, the provisions of Directive (EU) 2017/1852/EU of the Council of the EU of 10 October 2017 on tax dispute resolution mechanisms in the EU have been incorporated into Greek legislation.

Collecting overdue payments

How may the tax authority collect overdue tax payments following a tax review?

As soon as the assessment is notified to the taxpayer, the tax administration issues the taxpayer with a payment notice prior to proceeding to any enforcement action. In the event of non-payment of the amount due within 30 days from the notification of the payment notice, the tax authorities may proceed (without a judicial decision) to the imposition of a seizure of movable assets, real estate, property rights, claims and, in general, all of the debtor’s assets or, in case of the debtor being a legal entity, to all of the directors’ assets bearing joint liability (the latter is applicable under conditions specified by the law). On the basis of the above conditions, the tax authorities may also proceed to take appropriate interim measures.

Non-payment of tax due for a period of time longer than four months is a criminal offence (a misdemeanour – this refers to non-payment of taxes over €100,000).

Penalties - scope of application

How are penalties calculated?

The penalties for procedural infringements are fixed and depend on the simplified or complex accounting status of the taxpayer; that is, different penalties are imposed on taxpayers who are not liable to maintain accounting books and those who are liable to maintain accounting books on the basis of simplified or double-entry accounting principles. Repetition of any infringement within five years results in the imposition of a double penalty, whereas a quadruple penalty is imposed for a second repetition.

Penalties for infringements found following an audit by the tax authority depend on the amount of the discrepancy and are calculated as a percentage of the value of the infringement, depending on whether it concerns the fictitiousness, forgery and concealment of taxable income or the non-payment of taxes or the fraudulent refund of taxes.

Penalties for infringements of transfer pricing legislation are calculated as a percentage of the declared gross profits.

What defences are available if penalties are imposed?

The taxpayer may raise all arguments regarding flaws in the formal process of the act of assessment (eg, violations of procedure or a lack of competence), as well as disputing the basis or reasoning of the assessment. Force majeure arguments are extremely difficult to prove and reliance on the advice of an attorney or accountant is disallowed.

By virtue of an amendment to tax legislation, no penalties may be imposed on taxpayers if they have acted following written instructions from the tax administration.

In what circumstances may the tax authority impose penalties?

The tax authority may impose penalties in cases of infringement of Greek tax legislation. These penalties distinguish between penalties for procedural infringements and penalties for infringements found following an audit by the tax authority.

Procedural infringements include (indicatively):

  • non-submission or late submission of a statement of informative character or a tax return or a withholding tax return;
  • non-compliance with a request of the tax administration for the provision of information or data;
  • non-cooperation during a tax audit;
  • non-notification to the tax administration of the appointment of a tax representative;
  • non-registration before the tax registry; and
  • non-compliance with an obligation regarding the keeping of books and issuance of records according to Greek accounting standards, among others.

 

Infringements found following an audit by the tax authority include (indicatively):

  • filing of an inaccurate tax return;
  • non-filing of a tax return;
  • non-payment of VAT;
  • non-issuance of a tax record for a transaction subject to VAT;
  • issuance of false tax records;
  • issuance and receipt of fictitious tax records; and
  • falsification of tax records, among others.

 

There are also special penalties for infringements of transfer pricing legislation.

Penalties – calculation

How are penalties calculated?

Penalties for procedural infringements range between €100 and €2,500. The exact amount of the penalty depends on the type of books that are maintained by the taxpayer, as well as the type of violation. If the infringement is repeated within five years, the penalty is doubled, whereas in case of a second repetition within the same five years, the penalty is quadrupled.

For infringements found following a tax audit, the penalties are calculated as follows:

  • if the infringement refers to filing of an inaccurate tax return:
    • if the amount of tax imposed by the tax audit exceeds 5 per cent to 20 per cent of the tax arising from the tax return, a penalty of 10 per cent on the amount of the difference is imposed;
    • if the amount of tax imposed by the tax audit exceeds 20 per cent to 50 per cent of the tax arising from the tax return, a penalty of 25 per cent on the amount of the difference is imposed; and
    • if the amount of tax imposed by the tax audit exceeds 50 per cent of the tax arising from the tax return, a penalty of 50 per cent on the amount of the difference is imposed;
  • if the infringement refers to non-filing of a tax return, a penalty of 50 per cent on the amount of tax corresponding to the non-submitted tax return is imposed; and
  • especially for infringements relating to VAT and withholding taxes, a penalty of 50 per cent on the tax that would incur from the non-submitted return or of the difference, respectively, is imposed.

 

Penalties imposed for the delayed filing or non-filing or filing of inaccurate Summary Information Table as well as for the delayed submission or non submission of the TP Documentation File are calculated based on the value of intra-group transactions.

Penalties – defences

What defences are available if penalties are imposed?

The taxpayer may submit to the Independent Authority of Public Revenue an application for the exemption from penalties in case that force majeure is provided, with the exception of infringements referring to submission of inaccurate tax returns and infringements relating to tax evasion.

Collecting and calculating interest

In what circumstances may the tax authority collect interest and how is it calculated?

In cases of late payment or non-payment of any amount of tax (the latter being found following a tax audit), the taxpayer is obliged to pay interest for the period from the end of the legal deadline until the date of payment of the tax. The determination of the interest rate is a decision made by the Deputy Minister of Finance. The interest rate, according to the ministerial decision currently in force, is set at 8.76 per cent.

Although up until 31 December 2019, interest was calculated on a monthly basis, from 1 January 2020, it should have been calculated on a daily basis. Although in force, said amendment has not been adopted by Greek fiscal authorities yet. The significance of this differentiation lies in the fact that if a debt is paid on the 15th day of the month, according to the former calculation, the taxpayer would be called upon to pay interest for the entire month. In contrast, from 1 January 2020, the same taxpayer should have been called upon to pay 15/365 of the relevant interest (which corresponds to the 15 days that the payment was delayed).

Criminal consequences

Can criminal consequences arise as a result of tax non-compliance? Are these different for different types of taxpayers?

Legal provisions governing criminal tax evasion have been incorporated in the Greek Code of Tax Procedures, pursuant to which tax evasion is considered to be committed by persons who:

  • intentionally avoid the payment of taxes (eg, income tax, uniform tax on the acquisition of ownership, special real estate tax, VAT, turnover tax, premium tax, withholding and imputable taxes, fees or contributions, shipping tax) by not paying or paying incorrectly or reimbursing or setting off or deducting or withholding taxes; and
  • intentionally issue false or fictitious tax records as well as receiving fictitious tax records or altering such records, irrespective of whether they evade paying taxes or not.

 

Under the Greek penal system, legal entities do not bear criminal liability. For this reason, individuals who are engaged with the effective management, administration and representation of a legal entity (either by holding specific executive positions or by exercising de facto management duties) are considered to be the perpetrators or accomplices of tax evasion.

Tax avoidance

Are there specific rules or provisions regarding perceived tax avoidance?

Greek tax legislation has incorporated a number of anti-avoidance rules, both general (GAAR) and targeted ones (TAAR), namely as follows.

 

The GAAR provided under article 38 L 4174/2013

GAAR was initially based on the European Commission’s Recommendation on Aggressive Tax Planning (EU GAAR), published on 6 December 2012 (C(2012) 8806 final). By virtue of article 13 L 4607/2019, GAAR was amended in order to transpose article 6 of the anti-tax avoidance directive (EU)2016/1164 (ATAD).

By virtue of GAAR, it is provided that tax authorities shall ignore any arrangement or a series of arrangements that, having been put into place for the main purpose or one of the main purposes of obtaining a tax advantage that defeats the object or the purpose of the applicable tax law, are not genuine, having regard to all relevant facts and circumstances.

 

The TAAR for tax losses forfeiture provided under article 27 L 4172/2013

The TAAR refers to the fact that it is not possible to carry forward losses in the event of a change of more than 33 per cent of the direct or indirect holding or the voting rights in a legal person or entity, provided that there is also a change of activity of the legal person or entity in a percentage exceeding 50 per cent of its turnover in relation to the immediately preceding tax year from the change of shareholding structure or voting rights.

 

The TAAR for corporate restructurings provided under article 56 L 4172/2013.

TAAR on corporate restructurings is aligned with the provisions of 2009/133/EU Directive and applies for all restructurings (mergers, full or partial demergers, spin offs, share exchanges or transfer of the registered seat) effected under article 52-55 L 4172/2013. By virtue of the TAAR, to the extent that tax avoidance or tax evasion is identified as the main or one of the main objectives of the companies under restructuring, all benefits granted in accordance with the above-mentioned articles are fully or partially disallowed. The fact that a transaction is not performed for valid economic reasons, such as the restructuring or the rationalisation of the activities, may constitute an evidence that the main or one of the principal objectives of the transaction is the tax avoidance or tax evasion. 

There are other anti-avoidance rules included in the Greek tax legislation, such as interest limitation rules (which, in general, provide that interest expenses shall not be deductible to the extent that the surplus of interest expenses compared to interest income exceeds 30 per cent of ΕΒΙΤDΑ) as well as CFC rules (which, also in general, provide that the undistributed passive income of a foreign legal person or entity satisfying certain conditions shall be attributed to and taxed in the hands of the Greek resident controlling shareholder).

Enforcement record

What is the recent enforcement record of the authorities?

Because of the covid-19 pandemic, uncollected taxes due have increased significantly and reached about €111,398 by the end of April 2022 (latest available data).

Third parties and other authorities

Third-party involvement with tax reviews

Does the tax authority cooperate with other authorities within the country? Does the tax authority cooperate with the tax authorities in other countries?

The tax authority may cooperate with every authority within the country.

Greece has adopted EU Directive 2011/16/EU on administrative cooperation in the field of taxation, by which every member state’s authority may request information from other member states.

Greece has also signed and applies the Convention on Mutual Administrative Assistance in Tax Matters, which was developed jointly by the Council of Europe and the Organisation for Economic Co-operation and Development (OECD) and promotes international cooperation in the assessment and collection of taxes.

Furthermore, Greece has adopted the Automatic Exchange of Information tax standard, developed by the OECD, under which jurisdictions obtain financial information from their financial institutions and automatically exchange that information with other jurisdictions on an annual basis. The Automatic Exchange of Information tax standard came into effect in September 2017.

In January 2017, Greece and the United States signed an intergovernmental agreement to facilitate compliance with the US Foreign Account Tax Compliance Act by financial institutions in Greece.

Can a tax authority involve third parties as part of the authority’s review of a taxpayer’s returns?

The tax authority has the right to request any kind of information from third parties such as other public entities (authorities, organisations or companies owned by the state), judicial or prosecution authorities or other third parties, such as financial institutions, investment funds, chambers of commerce, notaries, registrars, heads of land registry offices, economic or social or professional associations or organisations. The right is restricted for pending criminal cases or investigations where the granting of a relevant permission by the court or the prosecutor is required to request the information.

Third parties bound by professional confidentiality (including lawyers) may provide information related to their economic transactions with the taxpayer. However, for the rest of the information covered by the confidentiality obligation, the tax authority should request permission from the competent prosecutor on proving that the taxpayer is suspected of tax evasion and invoking the reasons for which it wishes to obtain the information by the third party.

A fine ranging from €100 to €500 will be imposed if third parties refuse to provide the above-mentioned information to the tax authority.

Cooperation with other authorities

Does the tax authority cooperate with other authorities within the country? Does the tax authority cooperate with the tax authorities in other countries? (Describe, for example, tax information exchange agreements.)

Between Greece and the EU member states, Directive 2011/16/EU (incorporated with L 4170/2013) regarding the administrative cooperation in the field of direct taxation, is applicable. This Directive has been amended by the following.

  • Directive 2014/107/EU, effective from 1 January 2016, which introduced the automatic exchange of financial accounts information (incorporated with L 4378/2016). Based on the provisions of this Directive, the EU has concluded agreements on the automatic exchange of information with Switzerland, Andorra, Monaco, San Marino (incorporated with L  4515/2018) and Liechtenstein (incorporated with L  4516/2018).
  • Directive 2015/2376/EU, effective from 1 January 2017, which introduced the automatic exchange of information on advance cross-border rulings and advance pricing arrangements (incorporated with L 4474/2017).
  • Directive 2016/881/EU, effective from 5 June 2017, which introduced the automatic exchange of information on the country-by-country report (incorporated with L 4484/2017).
  • Directive 2016/2258/EU, effective from 1 January 2018, which introduced the access of tax authorities to mechanisms, procedures, documents and information in order to combat of money laundering from illegal activities (incorporated with L 4569/2018).
  • Directives 2018/822/EU & 2020/876/EU, which introduced the mandatory automatic exchange of information on reportable cross-border arrangements (incorporated with L 4714/2020).

 

Between Greece and other (non-EU) countries, administrative cooperation in the field of taxation is based on the following agreements:

  • The European Convention on Mutual Administrative Assistance in Tax Matters of 25 January 1988 (as amended in 2010 – ratified with L 4153/2013), the scope of which  covers specific categories of direct and indirect taxes. The Convention provides for three kinds of information exchange, namely: upon request, spontaneous and automatic exchange of information.
  • The Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information (ratified with L 4428/2016), which provides for the exchange of information corresponding to that defined in the Directive 2014/107/EU.
  • The Multilateral Competent Authority Agreement on the Exchange of (Country-by-Country Reports (ratified with L 4490/2017), which provides for the exchange of information corresponding to that defined in the Directive 2016/881/EU.

 

Between Greece and the USA, administrative cooperation in the field of taxation is based on the following agreements:

  • Agreement to improve International Tax Compliance and to Implement Foreign Account Tax Compliance Act ((FATCA) – ratified with L 4493/2017).
  • Arrangement on the Exchange of Country-by-Country Reports (ratified with L 4534/2018), which provides for the exchange of information corresponding to that defined in the Directive 2016/881/EU.

 

Moreover, Greece has signed and ratified 57 bilateral treaties for the avoidance of double taxation, which include a provision for administrative assistance.

Financial or other hardship

Voluntary disclosure and amnesties

Do any special procedures apply in cases of financial or other hardship, for example when a taxpayer is bankrupt?

If a taxpayer is declared bankrupt, the Greek state enjoys a priority right after the claims of secured creditors for claims of VAT, including any kind of surcharges thereof, and it ranks fifth after other priority creditors.

Concerning the declared bankrupt, if the Greek state has announced its claims within the bankruptcy procedure, it may request a settlement to be granted by the Minister of Finance. If the debt exceeds €600,000, the State Legal Council may accept a settlement that may involve:

  • the payment of the total amount of debt along with the partial or total release from late payment surcharges, tax surcharges and fines;
  • the payment of the basic debt and the late payment surcharges in monthly instalments (up to 90); or
  • a combination of the previous two.

 

A new insolvency framework was enacted with L 4738/2020 enabling households and businesses to settle their debts, including debts to the state, social insurance funds, banks, servicers and other private creditors.

Are there any voluntary disclosure or amnesty programmes?

There are currently no voluntary disclosure programmes in force. However, a new debt settlement scheme has been recently introduced, through which taxpayers can settle their tax liabilities in up to 24 or 48 instalments (depending on the debt).

Rights of taxpayers

Rules protecting taxpayers

What rules are in place to protect taxpayers when dealing with the tax authority?

The aforementioned Code of Tax Procedure and the Code of Administrative Procedure protect taxpayers, as well as the general principles of the Greek Constitution.

Requesting information from tax authority

How can taxpayers obtain information from the tax authority? What information can taxpayers request?

Taxpayers may file a petition to the tax authority to receive copies of any public or private document within 20 days provided that they prove a legitimate interest. In practice, the authorities response period may be longer and the legitimate interest may not be accepted. If the document is related to the private or family life of a third party, is protected by confidentiality under a special provision, or is crucial to a police, judicial or administrative investigation, the tax authority may deny the petition.

Oversight of tax authority governance

Is the tax authority subject to non-judicial oversight?

Every tax authority is subject to the control and monitoring of the Independent Authority for Public Revenues, which as of 2017 is an independent authority, released from state control and monitoring. The Authority is governed by the administrative council, a governor and a European Commission expert. The European Commission has appointed two officials in the council.

Before the taxpayer initiates pre-court or court actions against an act or omission by the tax authority, he or she may file a complaint to the Greek Ombudsman, an independent authority that intervenes in cases involving public bodies, including tax authorities. Upon examination of the complaint, the Greek Ombudsman should attempt to contact the tax authority and resolve the issue.

Court proceedings

Competent courts

Which courts have jurisdiction to hear tax disputes?

Tax disputes fall within the jurisdiction of administrative courts, on two levels: the Administrative Court of First Instance and the Administrative Court of Appeals.

Tax disputes up to €60,000 and tax disputes arising from the enforcement of tax claims by the tax authority (eg, seizures) fall under the competency of the single-member Administrative Court of First Instance.

Tax disputes from €60,000 up to €150,000, as well as non-monetary tax disputes, lie within the competency of the three-member Administrative Court of First Instance.

If the tax dispute is valued at €150,000 or more, the three-member Administrative Court of Appeals has exclusive jurisdiction as a first and final instance.

Decisions issued by the Administrative Courts of First Instance for tax disputes valued at more than €5,000 may be appealed by any of the parties.

The territorial jurisdiction is determined by the seat of the tax authority that issued the contested act (or omission).

Final decisions issued by the Administrative Court of Appeals valued at more than €40,000 are subject to a petition for cassation before the Supreme Administrative Court on limited exclusively legal grounds and if no prior jurisprudence of the Administrative Supreme Court exists or if the decision of the Administrative Court of Appeal contradicts prior jurisprudence of the Administrative Supreme Court or other Supreme Court or irrevocable decision of an administrative court.

Greek law has introduced the ‘pilot trial’, a process by which any legal matter of an appeal before the administrative courts may be examined first by the Supreme Administrative Court directly upon the filing of a petition by the interested party, provided that the matter is of great importance and it affects many taxpayers. Moreover, an administrative court itself may issue a preliminary decision, initiating a pilot trial before the Supreme Administrative Court. The final decision by the Supreme Administrative Court is binding on the court that initiated the pilot trial and any party that was involved in the pilot trial and constitutes jurisprudence on the legal matter in the way described in the previous paragraph.

Lodging a claim

How can tax disputes be brought before the courts?

Tax disputes are brought before administrative courts as a recourse against any act or omission of the tax authority (including assessment of taxes and fines or the denial of refunds to the taxpayer, etc). Recourse may be brought by any taxpayer who has a legitimate interest affected by the contested act or omission, on any legal or factual grounds and without any threshold.

Recourse may also be brought independently by individuals or entities who are jointly liable for tax obligations of legal persons or entities. Tax disputes may not be brought before the courts by the tax authority.

The Code of Tax Procedure requires that before recourse to administrative courts, an administrative appeal before the Dispute Resolution Directorate (DRD) of the Independent Authority for Public Revenues is filed as mandatory. The administrative recourse may be submitted to the DRD within 30 days of the date of notification of the final corrective assessment act or other tax dispute, or 60 days for taxpayers residing abroad. The DRD must issue a decision within 120 days from the filing of the administrative appeal; otherwise, the appeal is considered tacitly rejected.

The taxpayer has the right to challenge such rejection judicially by submitting an appeal to the administrative courts within 30 days of the date of notification of the decision issued by the DRD, or the expiry of the 120-day period if no decision was issued by the DRD. In any case, he or she is obliged to pay upon filing a court fee amounting to 1 per cent of the tax in dispute up to €1,000. Another court fee of up to €2,000 is payable for the hearing of the appeal at first instance. An additional court fee of up to €12,000 may be imposed by the court.

Relief sought is limited to total or partial annulment or modification of the contested act, including an obligation to refund any amounts unduly paid to or due by the tax authority, with interest. In case of contestation of an omission by the tax authority, the taxpayer may request the court to determine the amount of the taxpayer’s claim.

Combination of claims

Can tax claims affecting multiple tax returns or taxpayers be brought together?

In principle, each contested act or omission by the tax authority is subject to a separate appeal. However, coherent acts may be contested in one appeal, especially in cases of tax audits covering multiple taxations and fiscal years. In any case, the admissibility of the appeal is judged separately for each contested act (deadline or court fee, etc). In cases where multiple persons or entities are jointly liable for payment of any amount of tax, an appeal may be brought together or separately for all or any of them. ‘Collective’ appeals by taxpayers are not permitted under Greek law.

Pre-claim payments

Must the taxpayer pay the amounts in dispute into court before bringing a claim?

Payment of the amounts in dispute is not a prerequisite for the filing or hearing of an administrative appeal before the DRD or an appeal at first instance (except for the court fees).

The submission of an administrative appeal or an appeal at first instance suspends the payment of 50 per cent of the amount in dispute, provided that the remaining 50 per cent is paid. In any case, the taxpayer may seek suspension of the whole amount in dispute by the DRD or (more commonly) by the court, by proving inability to pay entailing irreparable damage in the case of enforcement of the claim by the tax authority. In practice, it is difficult to obtain suspension and it requires the disclosure of the global income and assets of the taxpayer and his or her family members or, in the case of legal entities, of jointly liable individuals, main shareholders and affiliated entities.

In the case of an appeal before the administrative court of appeals against a decision of the Administrative Court of First Instance, the payment of 20 per cent of the amount determined by Court of First Instance until the date of hearing before the Court of Appeal is a prerequisite for the appeal to be heard.

Cost recovery

To what extent can the costs of a dispute be recovered?

The costs of a tax dispute may be sought by both the taxpayer and the tax authority. These only include costs connected to the proceedings before the court, in all instances. In practice, Greek courts only grant rather symbolic amounts as costs (a few hundred euros, even for the Supreme Court). Court fees paid are refunded in full or in part in the case of acceptance of the appeal.

Third-party funding

Are there any restrictions on or rules relating to third-party funding or insurance for the costs of a tax dispute, including bringing a tax claim to court?

Greek law has no restrictions or rules relating to third-party funding or insurance for the costs of any dispute.

Availability of jury trials

Who is the decision maker in the court? Is a jury trial available to hear tax disputes?

In the case of multi-member courts, the opinion expressed by the majority of judges prevails for the issuance of the decision. No jury trial is provided by Greek legislation for tax disputes.

Time frames

What are the usual time frames for tax hearings?

Time frames in Greek administrative courts used to be notoriously long, but the situation has gradually improved (especially before the Courts of Appeal). An appeal before the Administrative Court of First Instance of Athens may be heard within two to four years from filing, and a decision is issued within six to 12 months from the hearing. The time frames before administrative courts in other cities are shorter.

However, tax disputes involving amounts exceeding €150,000 are brought directly before the Administrative Courts of Appeal and heard within six to 12 months from filing. A decision is usually rendered within six months from the hearing.

The time frames before the Supreme Administrative Court range from one to three years, depending on the importance of the case.

Because of the covid-19 pandemic and the non-functioning of the administrative courts for a long period of time (during both 2020 and 2021), the aforementioned time frames may be extended.

Disclosure requirements

What are the requirements concerning disclosure or a duty to present information for trial?

In principle, in trials before the administrative courts, there is not a specific requirement to present information and each party bears the burden of proof of its own pleadings. In any case, if the court does not have enough evidence, it may issue a preliminary ruling ordering a re-audit or supplementary audit with a limited scope, which is carried out by the tax authority.

Permitted evidence

What evidence is permitted in tax hearings?

Tax trials usually do not involve testimonies other than sworn statements (affidavits). In any case, the taxpayer is not accepted as a witness. The persons most commonly providing sworn statements or testimonies in tax trials include accountants, employees of the taxpayer or counterparties in various transactions. Experts or persons providing technical reports or legal opinions are also permitted to testify. All written evidence in other languages must be translated into Greek. Sworn statements or testimonies by non-Greek speakers are carried out with the assistance of a translator.

Permitted representation

Who can represent taxpayers in a tax trial? Who represents the tax authority?

In tax trials with amounts in dispute exceeding €600, taxpayers must be represented by an attorney at law. The tax authority is represented either by its director or by members of the State Legal Council, a special body of lawyers representing the Greek state before all courts.

Publicity of proceedings

Are tax hearings public?

All trial hearings before administrative courts are public but, as explained, the procedure essentially takes place on paper.

Burden of proof

Who has the burden of proof in tax hearings?

In principle, in trials before the administrative courts, each party bears the burden of proof of its own pleadings. However, in Greek tax law, the taxpayer has the burden to prove all the elements that are necessary for a tax assessment that constitute the reasoning of such tax assessment (usually in the form of a tax audit report). As a result, a tax assessment or audit may be annulled on the grounds of lack of reasoning. As an exception to this rule, Greek tax legislation often introduces presumptions of the indirect proof of the existence of taxable matter; in these cases, the burden of proof is reversed. Also, according to recent case law, in some extreme cases (eg, of tax evasion), the court may decide on an adhoc allocation of the burden of proof, subject to judiciary review by the Supreme Administrative Court.

In any case, if the court does not have enough evidence, it may issue a preliminary ruling ordering a re-audit or supplementary audit with a limited scope, which is carried out by the tax authority.

Case management process

What is the case management process for a tax hearing?

In preparation for a tax trial, all evidence should be collected and translated, and usually sworn statements are prepared. In certain cases, where additional legal grounds for the initial appeal exist, they can be submitted to the court 15 days before the hearing and notified to the other side, and they become part of the appeal. Proxies or authorisation documents on behalf of the client should be submitted to the court at least one day before the hearing. The arguments of the appeal, the evidence and the counter arguments against the Greek state’s position are analysed in the legal memorandum submitted within three days from the hearing; and in the following three days, the legal memorandum of the Greek state (if any has been submitted) can be rebutted.

Appeal

Can a court decision be appealed? If so, on what basis?

Either party may file an appeal against a decision of the Administrative Court of First Instance within 60 days from the notification of the decision. A prerequisite for the filing of the appeal is payment of 20 per cent of the tax levied. The appeal may include any legal or factual ground.

Against decisions of the Administrative Court of Appeals, a petition for cassation may be filed within 60 days from the notification of the decision, or 90 days if the taxpayer resides abroad.

Update and trends

Key developments of the past year

What are the current trends in enforcement of tax controversies? What are the current concerns of the authorities and taxpayers in relation to the enforcement and handling of tax controversies and are these likely to change? Are there proposals to change the relevant legislation or other rules?

The current trends in tax controversies have been shaped by four recent decisions of the Greek Administrative Supreme Court.

In Decision Νο. 432/2020, the court sustained a five-year limitation period for stamp duties for fiscal years up to 2013, overturning its fixed case law, pursuant to which a 20-year limitation period was applicable. There is no explicit limitation clause in the Code of Stamp Duties.

In Decision No. 320/2020, the court held that, for the tax years 2011–2013, a valid closure of the relevant tax cases takes place after an 18-month period following the issuance of a 'clear' tax certificate. Thus, should there be no specific reasoning for it, the Greek state may not conduct a tax audit after the aforementioned period of time.

In Decision No. 658/2020, the court found that information coming to the attention of Greek tax authorities regarding deposits in foreign banks constitutes (according to income tax legislation) 'additional data' for tax audit. Thus, the 10-year limitation period provided by law is applicable in said cases.

In Decisions No. 2163-4/2020 and 2323-5/2020, the court ruled that the granting, even occasionally, of an interest-bearing cash loan by a person subject to VAT (ie, a business) is exempt from stamp duty. 

Coronavirus

What emergency legislation, relief programmes and other initiatives specific to your practice area has your state implemented to address the pandemic? Have any existing government programmes, laws or regulations been amended to address these concerns? What best practices are advisable for clients?

The Greek government has issued numerous emergency measures in response to the covid-19 pandemic, which include, among others:

  • deferral of tax payments for affected businesses, employees and lessors of affected businesses;
  • extension of payment deadlines, as well as the suspension of debt collection;
  • extension of deadlines for submission of tax returns and other filings;
  • tax reductions in case of timely payment;
  • reduction of VAT on specific products, as well as VAT exemption on imports granted for goods needed to combat the effects of the coronavirus outbreak; and
  • provision of financial aid by the Greek state in the form of repayable advances.

Law stated date

Correct on

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