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Tax amnesty, lottery with receipts and transfer pricing

10 March 2015 / 19:03:54  GRReporter
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The Greek government proposes to its European partners a new list of reforms that allows for submitting a supplementary tax return without the imposition of fines, as a new version of tax amnesty.

In particular, the Ministry of Finance seems ready to urge all who have undeclared incomes abroad to declare them by paying a low tax in the range of 15% for example.

The most important point is that the declaration of income will not include a mandatory repatriation of capital, i.e. taxpayers will be able to leave the money abroad as long as they pay the tax due. Otherwise, they can lose up to 80% of their money in the form of fines and tax increases.

In other words, citizens with undeclared income and property:

- will be asked to submit additional tax returns,

- will not be subject to fines and tax increase,

- will only pay the tax due.

Checks of tripartite transactions between companies

Ways to close the "loopholes" for tax evasion allowed by the European legislation itself are also being explored.

Tripartite transactions involve three companies. Company Α, which is the supplier of goods, raw materials or services, company B, which is the actual recipient of the goods, raw materials or services, and company C, which mediates as a formal recipient of the goods, raw materials or services.

Under the model of tripartite transactions, company Α sells the goods, raw materials and services to company C that is headquartered in a tax haven or in a country with a preferential tax rate. Company C in turn sells the goods to company B, which is their final recipient. Through this tripartite transaction, both the profit of company B and the tax due have significantly decreased, the result being revenue loss to the state.

The Ministry of Finance proposes the following:

- Lottery with receipts to combat tax evasion

- Citizens will demand receipts, which will participate in a lottery.

- Each taxpayer will send to the Ministry of Finance, via his or her mobile phone, a text message with the reference number of the receipt.

- Those who do not want to use their mobile phone will be able to use a special online application.

- The number of the receipt will participate in a lottery.

- The draw will take place every month.

- The lucky ones can win from 500 euro to 1000 euro.

- The luckiest ones will have the chance to win up to 10,000 euro.

- Once a year, there will be a draw for cars or money (e.g. on the basis of the number of the New Year's lottery).

Other proposals by Minister of Finance Yanis Varoufakis that will be discussed with the technical teams include the following:

- Creating special groups of tax inspectors, including householders, tourists, students, etc. to carry out tax checks and fight tax evasion.

- Unprofessional tax inspectors will be changed every two months.

- Settlement of arrears.

- Adopting immediate measures to address the humanitarian crisis.

- Taxation of online gambling (planned revenue of € 500 million per year).

- Completing all transactions with the state electronically in order to avoid bureaucracy.

- Setting a maximum limit of government spending.

- Launching a fiscal council aiming to attain a primary surplus.

Tags: TaxesMeasuresGreek governmentTax reformsTax amnesty
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