Monday, 13 February 2017

Greece introduces a voluntary disclosure program

The Greek parliament passed the long-awaited bill on the voluntary disclosure program (VDP) on 21 December 2016.
The VDP sets out the mechanism under which Greek taxpayers (apparently, both individuals and legal entities) can report previously undeclared income (irrespective of the nature, origin or year of realization of the income) by filing a new or an amended tax return. Significantly reduced additional taxes will be levied on taxpayers participating in the VDP, as compared to the additional taxes levied in the absence of the VDP (which can be 60% or even 120% of the “main” tax due in certain cases). Additionally, the taxpayer will not be subject to further tax, administrative or criminal penalties or other measures (e.g. prosecution for money laundering or tax evasion, etc.).
Taxpayers can participate in the VDP by filing the relevant tax returns or statements starting from the date of publication of the VDP law (22 December 2016) until 31 May 2017.
The key features of the VDP are as follows:

  • The VDP will apply where a taxpayer failed to file or made a late or inaccurate filing of a tax return or statement, provided the original filing deadline was before 30 September 2016. The return or statement can relate to income tax, VAT, gift tax, inheritance tax, real estate tax, special solidarity tax, etc., as well as information reporting returns.
  • Where a taxpayer discloses previously unreported income and files the relevant tax returns, the main tax due will be calculated based on the tax rate that applied in the year in which the income should have been declared.
  • For income declared and tax returns filed by 31 March 2017, an additional tax will be calculated at a rate of 8% on the amount of the main tax due. For income declared and tax returns filed during the period from 1 April 2017 through 31 May 2017, the additional tax will be calculated at a rate of 10% on the amount of the main tax due.
  • Depending on the year in which the original tax obligation arose, late filing penalties will be readjusted at rates ranging from 0% to 25%.
  • Taxpayers that are under tax audit may participate in the VDP, but the additional taxes due will be assessed on the basis of increased rates that could range from 13% to 30%, instead of the 8% and 10% rates. 

Source: Deloitte