New Measure Against Tax Evasion with IRIS Expansion Starting November 1

The announcement by Kyriakos Pierakkakis and Stavroula Kampouridou regarding the expansion of IRIS usage to all businesses is no surprise, as the government has long emphasized its commitment to combating tax evasion through direct payment systems. In fact, the joint pre-announcement by the Minister of Finance and the Director General of DIAS for mandatory IRIS use by businesses starting November 1 was part of the Capital Market bill passed last month. The anticipated benefits are twofold: not only will citizens enjoy greater convenience with an additional payment method at businesses without any fees, but there will also be enhanced efforts to combat tax evasion by significantly reducing opportunities for professionals to hide their income. Under the new regime, businesses must compulsorily set up a professional account linked to the IRIS direct payment system and accept payments via IRIS from customers starting November 1. Account checks will be conducted through cross-referencing data from the AADE Registry, Payment Service Providers, and DIAS. Violators will face penalties and other sanctions for tax evasion. On the positive side, business owners need only upgrade their POS software to connect with IRIS, avoiding complete replacement. Customers will indicate whether they wish to pay by card or IRIS for the appropriate setting on the POS. Currently, all citizens can activate IRIS in their mobile banking app for transfers up to €500 daily without bank charges. With this expansion, all enterprises join freelancers and self-employed individuals in accepting direct payments. IRIS, combined with POS reform, forms a cornerstone of the government’s strategy to reduce tax evasion, aiming to collect an additional €2.5 billion annually by 2027. Efforts like these have reduced Greece’s VAT gap from 29% in 2017 to 13.7% today, targeting a 5% reduction by 2029, aligning with the EU average. The economic team emphasizes electronic payments to prevent hidden transactions, estimating that every €10 increase in digital payments corresponds to approximately €0.67 in undeclared VAT revenue. Last year’s POS reforms increased electronic payments by €7.5 billion, while in 2024 alone, verified VAT rose by €2.66 billion due to increased digital transactions, numbers the YPOI aims to surpass with IRIS expansion.