Arrangements to reduce bureaucracy, facilitate taxpayers, exploit modern technology in communication with and strengthen transparency include the draft law on the reform of the Tax Procedure Code, which it presented today at the same time, were presented by the Ministry of Finance and the changes to the Golden Visa that give priority to household housing needs and on the other hand allow investment to continue in new more balanced terms. The presentation was made by the Minister of National Economy and Finance, Kostis Hatzidakis, the Deputy Minister of National Economy and Finance, responsible for Tax Policy, Harry Theocharis, the Secretary-General for Economic Policy and Strategy, George Christopoulos, the Secretary-General for Taxation Policy, Mary Psylas and the Governor of AADE, George Pitsilis. The Minister of National Economy and Finance, Kostis Hatzidakis, stated: “The Tax Procedure Code bill serves the objectives for transparency, reduction of bureaucracy, better service to the citizen and the use of digital tools by AADE. Procedures which have so far been carried out by exchanging documents, resulting in delays or, in some cases such as issuing tax information, being wronged by the citizen, will now be done digitally, quickly and safely. Furthermore, we create the framework for hundreds of thousands of citizens to be exempt from the obligation to submit a tax declaration if their income is previously known to the tax authorities. At the same time, we are moving on to a balanced arrangement for Golden Visa, which primarily takes into account household housing needs, without forgetting the need to attract investment in the country. We introduce incentives to transform buildings into residences, take care to save preserved buildings that form part of our cultural heritage and put an explicit ban on the disposal of Golden Visa properties in short term leases. These arrangements are part of the government’s overall housing policy aimed, in cooperation with the private sector, at ensuring affordable and quality housing for all citizens, taking into account, however, the need to continue investment in more balanced terms.” Under Secretary of State for National Economy and Finance, Harry Theocharis said: “With the new bill of the Ministry of National Economy and Finance we are decisively proceeding to a radical reform of the Tax Procedure Code. I dare say that the bill attempts one of the most important cuts made in the last decades in the operation of the tax mechanism in Greece. By measures such as the introduction of automatic, pre-filled declarations, we exempt about 1 million employees and pensioners from the process of drafting and submitting a tax declaration. Similarly, we are actively charging the DOU and the Greek public, while with the same aim we also abolish the obligation to produce books to the tax office for skilled and small businesses. We are setting a specific time frame for tax controls so that there are no time-consuming outstanding issues that burden all those involved. More generally, the Tax Procedure Code bill constitutes a qualitative leap towards the digitisation of the state and the effective fight against bureaucracy. A bill that proves the Government’s will to change for the better the everyday life of every Greek citizen, especially in its dealings with economic and tax services.” The Governor of the Tax Code, George Pitsilis, said: “Utilizing the 10-year experience of implementing the Tax Procedure Code, we propose a number of improvements, with a view to increasing the effectiveness, transparency and professionalism of our services, reducing bureaucracy and environmental footprint and, at the same time, strengthening our relationship of trust with citizens and society as a whole. Digital communication with citizens and businesses, strengthening interoperability with other public bodies, new rules on the types and timing of tax controls, are very important steps in achieving our objectives.” The Secretary-General for Tax Policy, Mary Psylla, said: “By law we consider that the modernisation and adaptation of the Code of Tax Procedure to a Tax Administration for which the automation of procedures, simplification, digitization and transparency are the basis for its operation. With the provisions adopted, Tax Administration communicates electronically with the taxpayer – faster and more efficient. It uses secure digital applications in the context of wider public sector interoperability. The result is the best service to the taxpayer. At the same time, the Administration shall determine types of tax control and determination, time limits for carrying out such checks and shall specify the period of limitation on the basis of decisions of the Council of State. This protects the taxpayer and ensures the interests of the State more fully.” In detail, the basic provisions of the bill include the following: Pre-filled tax returns The procedure for drawing up and submitting tax returns is practically abolished for taxpayers who have income exclusively from salaries and pensions (calculated to 1 million citizens). The tax declaration shall be completed automatically by the ADE and shall also be finalised automatically if the taxpayer does not object within the time limit for submitting tax returns. It is now only possible to supplement wage and pension incomes, but the declaration is not automatically finalized. Repeal Tax collectors who keep books based on the simplified accounting system (mainly skilled and small enterprises) are exempt from the obligation to provide their accounting records to the tax administration, provided that all relevant data (incomes – expenses) are transmitted to the myDATA platform. The previous scheme provides for a fine of EUR 2,500 not to produce the books. Further, the deadline for the provision of information, requested by ADE from taxpayers, is increased from 5 to 10 days. Digitalisation of procedures – Removal of correspondence to and from AADE – The communication of tax administration with taxpayers will be done exclusively by digital means. The written correspondence which has been applied so far is abolished to a large extent. All documents will be communicated by posting them on the account of any natural or legal person in the AADE information system. The taxpayer will receive a notification in his email and enter the information system with his passwords to obtain the document. It is noted that this procedure is already in place for a series of notifications to the taxpayer (e.g. when an amount of income tax is paid, the ADE sends an email to the taxpayer which alerts him to enter the information system to download the payment receipt). Communication with the “classical” methods (letters, performance, etc.) will only be done exceptionally in very specific cases. The main benefit of digitising the procedures, beyond their acceleration, is their accurate capture, thus the time, form and content of communication cannot be questioned, while also unloading the Courts. – Compliance with all tax administration records should also be done digitally while the written file of AADE containing the documents it issues and receives is digitized. The issue of tax information is adopted more quickly, interoperability between public bodies is adopted so that ADE is informed of the existence or non-executive debts of the citizen and, respectively, to grant the tax information certificate. In practice, by this regulation, the TTAs and other public bodies will communicate only electronically with AADE (instead of the letters they exchange today), either on the prohibition of the performance of information or the lifting of this prohibition. Thus, cases are dealt with e.g. when the taxpayer has paid debts to the Municipality but cannot obtain tax information because AADE has not been informed of the repayment. Specific timeframe for tax audits A maximum time limit shall be set for the completion of the tax audit, in principle one year from the notification of the audit order with an extension option for 6 months if in the meantime the audit has started and another 6 months provided that the audit can be completed during this period. There is currently no provision for the maximum duration of the audit, which is determined by the officials carrying out it. The concepts of partial, complete, 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 a direct and imminent risk of tax evasion arises (e.g. seasonal newly established enterprises, or where there is specific evidence that the taxpayer intends to leave the country). Today, there is a provision in force for a preventive determination of the tax, but it does not actually apply, as it only concerns cases where there is evidence of a departure from the country. Now, the provision becomes more specific and effective in its application. The possibility of intermediate tax determination was considered necessary by AADE as it is often observed that seasonal newly established enterprises operate for a short period of time and close from one day to another without paying a single euro tax. Limitation The notification of the tax identification act must be made within the five years provided for in the limitation. Until now, it has been sufficient in the five years that the act has only been adopted and that it should be notified to the taxpayer. Golden Visa The arrangements aim to increase housing supply for long-term leases and to address Golden Visa’s impact on housing costs, while maintaining incentives to import investment funds into the country and develop the real estate market. For the granting of a 5 year residence permit to third-country citizens (Golden Visa), from 31 March 2024 the following conditions will apply: – In the Region of Attica, the Regional Units of Thessaloniki, Mykonos and Santorini and in the islands with a population of over 3,100 inhabitants, the value of the property to be held by the person concerned increases to 800,000 euros. In the rest of the country the value of real estate is €400,000. In each case the investment must be made in a property (not in more properties of less value) of at least 120 sq.m. Indivisible property ownership is allowed to be purchased, the minimum value of which is equal to EUR 800,000 and EUR 400,000 respectively. – For buildings that currently have different use and are converted into houses, the minimum investment level is €250,000. The conversion of the use must be completed prior to the submission of the application for the residence permit. – At 250,000 euros the limit is also set if it is an investment in a listed building that is to be restored. – Residence permits can be renewed for the same period (five years) as long as the real estate remains on the property of the investor. If it is an investment in a listed building, an additional condition for renewing the residence permit is that the restoration of the building is completed. If the investor sells the property then his residence permit is revoked and the buyer has the right to obtain a residence permit. – Investors can lease out the buildings they acquire, but they are not allowed to be made available through short-term leases, while in the case of conversion to residence they are also prohibited from using them as a headquarters or branch of an enterprise. In the event of an infringement, the residence permit shall be revoked and a fine of EUR 50,000 shall be imposed. – In addition to buying real estate, third-country citizens obtain a residence permit and with the conclusion of a long-term contract of complex tourist accommodation or a contract of time-share tourist accommodation, corresponding to an area of value (800,000 euros in Attica, etc., 400,000 euros in the rest of the country etc.). In order for the new system to be applied smoothly and not to disrupt the functioning of the market, a transitional period is provided for under the following conditions: Citizens of third countries who will pay the price or pay an advance of 10%, or sign a contract or private purchase agreement, proving the relevant credits by 30 September 2024 can complete their investment by 31 December 2024 under the conditions applicable until now. In such cases, if the purchase of the property is not completed, the buyer may complete his investment in another property always under the conditions applicable until now but not after 30 April 2025. With other provisions included in the amendment: – The exemption from the end of the week for farmers of normal status and fishermen with vessels up to 12 metres is fixed. – Provision is made for the payment of the income tax for the incomes of 2023, to be paid this year, in 8 monthly instalments. – The property owners in the areas of Crete affected by the earthquakes of 24 July and 27 September 2021 are exempt from the ENFIA of 2024.
All new tax arrangements – In detail the presentation of the Ministry of Finance
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