The draft law was put to public consultation for the reform of the Tax Procedure Code, which was presented last week by the political leadership of the Ministry of National Economy and Finance. The consultation will run until 8 April.

The draft law includes a series of interventions that modernize the country’s tax system, take advantage of new technologies and strengthen the relationship of trust between the State and citizens on tax matters. Among them is the implementation already this year of the important reform to exempt 1 million taxpayers, who have income exclusively from wages and pensions, from the obligation to submit a tax return. In these cases, the tax return will be automatically drawn up by AADE and will also be finalized automatically, while the taxpayer will have the opportunity to raise objections within the deadline for submitting the tax returns.

The Minister of National Economy and Finance, Kostis Hatzidakis, said: “The Tax Procedure Code Bill is an important step forward in enhancing transparency, upgrading citizen service and reducing red tape. By exploiting the possibilities of modern digital technology and simplifying procedures, the citizen’s relationship with the tax authorities improves in practice.”

The Deputy Minister of National Economy and Finance, Haris Theocharis, said: “The main objective of the new Tax Procedure Code is to modernize and simplify the procedures for the interface of citizens with the AADE. The speed, efficiency, practicality of the procedures are the invisible but no less important side of tax justice. A bill that proves the practical will of the Government and the Ministry of National Economy and Finance to improve the everyday life of every Greek citizen”.

In detail, the main provisions of the bill include the following:

Pre-filled tax returns

The process of drawing up and submitting tax returns is practically abolished for taxpayers who have incomes exclusively from wages and pensions (calculated in 1 million citizens). The tax return is automatically pre-filled by the AADE and is also finalized automatically if the taxpayer does not raise objections within the deadline for submitting the tax returns. Currently, only the pre-filling of income from wages and pensions is applied, but the automatic finalization of the declaration does not apply.

Abolition of the obligation to present books

Taxpayers who keep books based on the simple accounting system (mainly self-employed and small businesses) are exempted from the obligation to submit their accounting records to the tax administration, as long as all relevant data (income – expenses) are transmitted to the myDATA platform. The previous regime provides for a fine of 2,500 euros for not presenting the books.

Furthermore, the deadline for providing the information, which AADE requests from taxpayers, increases from 5 to 10 days.

Digitization of procedures – Abolition of correspondence from and to AADE

The communication of the tax administration with the taxpayers will be done exclusively by digital means. Paper correspondence, which has been applied to a large extent until today, is being abolished. All documents will be shared by posting them to the account that every natural or legal person has in the AADE information system. The taxpayer will receive a notification in his e-mail and will enter the information system with his codes to take notice of the document. It is noted that this procedure is already applied for a series of notifications from AADE to the taxpayer (e.g. when an installment of income tax is paid, AADE sends an email to the taxpayer notifying him to enter the information system to “download” the proof of installment payment). Communication with the “classic” methods (letters, performances, etc.) will only be done exceptionally, in very special cases.

The main benefit from the digitization of procedures, beyond speeding them up, is their accurate recording, as a result of which the time, form and content of the communication cannot be disputed in court, relieving the Courts at the same time.

– The maintenance of all the records of the Tax Administration should also be done digitally, while the paper file of the AADE, which includes the documents it issues and receives, is digitized at the same time.

Faster issuance of tax information

Interoperability between the State bodies is adopted so that the AADE is informed about the existence or not of overdue debts of the citizen and accordingly grants or not the tax awareness certificate. In practice, with this regulation mainly the OTAs but also other public bodies will communicate with the AADE only electronically (instead of the letters they exchange today), either for the prohibition of providing information or for the lifting of this prohibition. Thus, cases are treated e.g. that the taxpayer has paid debts to the Municipality but cannot get tax information because AADE has not been informed about the payment.

Specific time frame for tax audits

A maximum time limit is set for the completion of the tax audit, in principle one year from the notification of the audit order with the possibility of extension for 6 months if the audit has started in the meantime and another 6 months provided that during this time it is possible the completion of the audit. Today there is no provision for the maximum duration of the audit, which is determined by the officials who carry it out.

The concepts of partial, full, on-site or remote control are also clarified.

Finally, the possibility of interim tax determination is established, in cases where there is a combination of criteria from which there is a direct and imminent risk of tax evasion (e.g. seasonal newly established businesses, or when there are specific indications that the taxpayer intends to leave the country). Today, there is a relevant provision in force for the preventive determination of the tax, which, however, is not practically applied, as it only concerns cases where there is evidence of fleeing the country. Now, the provision becomes more specific and effective in its application. The possibility of interim tax determination was deemed necessary by AADE as it is often observed that seasonal newly established businesses operate for a short period of time and close overnight without paying a single euro of tax.

Limitation

The notification of the tax determination act must be made within the five years provided for the statute of limitations. Until now, it was sufficient within the five-year period that only the issuance of the deed had been made, while from now on it must also have been notified to the taxpayer.