New Tax Procedure Code
In late July 2013 a Tax Procedure Code was adopted by the Greek Parliament, in principle applicable from January 1st, 2014 onwards. The new law aims at incorporating into a single text all the provisions relating to administrative procedures applicable to taxation (e.g. tax returns, tax assessment, collection of taxes, tax audits, surcharges, complaints and appeals etc.). The most significant amendments introduced by the law are the following:
General Anti-Avoidance Rule (GAAR)
A general anti avoidance rule is introduced for the first time into Greek tax law. According to this rule, the tax authority may disregard any artificial arrangement or series of arrangements aiming at tax avoidance and leading to a tax benefit. An arrangement is deemed to be artificial if it lacks commercial substance. In order to decide whether the arrangement or the series of arrangements has led to a tax benefit, the tax authority compares the amount of tax due by the taxpayer after acceptance of this (these) arrangement(s) with the amount of tax that would be due by this taxpayer under the same circumstances but for such arrangement(s).
Surcharges
A new system of surcharges is introduced. Surcharges depend now on the kind of tax infringement (procedural or tax avoidance); furthermore, in case of late tax payment the law provides now for an interest liability. Finally, the law does no longer provide for a reduction of the surcharges in case of an out-of-court settlement.
Joint liability
The new law provides for a joint liability of shareholders of corporate entities at the time of dissolution participating by at least 10% therein in case where at the time of dissolution such entities have outstanding tax debts. The liability is limited to the amount of profits collected by said shareholders within the last 3 years prior to the dissolution. However, the joint liability does not apply to corporate entities whose shares are listed on the Athens Stock Exchange or any other recognized EU stock exchange.
Administrative appeal
If a taxpayer disagrees with a decision (explicit or implied) made by the tax authority, she/he is entitled to file an administrative appeal with the tax authority (Directorate Dispute Resolution), asking them to review the decision. However, if the taxpayer intends to file recourse with the competent administrative court, prior filing of the administrative appeal is a prerequisite; otherwise, the recourse shall be rejected as inadmissible.
The administrative appeal must be filed within 30 days of notification of the explicit or implied decision, whereas the Directorate’s decision thereon must be notified to the taxpayer within 60 days of filing of the administrative appeal; otherwise, the appeal is deemed to be rejected. If the taxpayer disagrees with the decision (explicit or implied) on the administrative appeal, she/he is entitled to file recourse with the competent administrative court within 30 days of the Directorate’s decision.
Filing of the administrative appeal postpones payment of 50% of the disputed amount if the rest 50% has already been paid or the taxpayer has requested postponement of payment thereof and the request has been approved (only on the grounds that payment of the disputed amount would cause an irreparable financial damage to the taxpayer, which the latter should substantiate based on her/his current financial situation).