A highly favorable transitional provision, with which thousands of businesses and professionals who will be notified of a tax audit order by 30/9 can save 50% of the finesincludes the final provision of the new Tax Procedure Code.

Conditions are to submit overdue initial or amending declarations after notification of the tax audit order and through these declarations to declare the hidden taxable material and to accept the main debt of additional taxes (the taxes whose payment was avoided) up to 10 days after the notification of an act of temporary corrective tax assessment.

This is the provision of paragraph 3 of article 84 of the new Tax Code (law 5104/2024), according to which until 30-9-2024 any entrepreneur and self-employed person who is going to be tax audited has the right, after notification of the order audit, to submit overdue initial or amending declarations of income tax, VAT and other tax items, to declare through them the hidden taxable material which is to be determined by the audit or will have been attributed to him based on the temporary act of corrective tax determination, to pay the amounts of additional taxes arising from these declarations within 30 days from the notification of the temporary act of corrective tax assessment and to avoid 50% of the proportional fines provided for the violations he committed. In particular, taxpayers who will follow this procedure will be spared half of the fines that the audit would charge them for not submitting declarations or for submitting inaccurate declarations and which amount to 50% of the tax or the tax difference avoided to be paid due to said infringements. In essence, fines will be reduced from 50% to 25% of unpaid taxes or unpaid tax differences.

The previous regime provided for the same option but with a 40% discount on fines. The provision is transitional and valid until September 30, 2024, because from October 1, 2024, the new procedure for out-of-court settlement of the audited taxpayers with the tax audit services provided for in article 75 of the new Tax Code will be implemented in its full form.

Escalation of discounts in 5 stages

The context of discounts that will apply from October 1, 2024, for those who confess to the violations they committed, is as follows:

  1. Proportional fines will be reduced by 50% if a confession is made to violations of non-submission of declarations or submission of inaccurate declarations after the issuance and notification of an audit order and before the notification of a temporary corrective tax assessment act or if the main tax debt is accepted up to 10 days after notification of an act of temporary corrective tax assessment. A condition for the reduction of fines is, in the first case, that the relevant overdue initial or amending declarations be submitted before the notification of the act of temporary corrective tax assessment, and in the second case that the relevant declarations be submitted within 10 days of the notification of the act .
  2. Fines will be reduced by 40% if the main tax debt is accepted after notification of a final corrective tax assessment but before recourse to the Dispute Resolution Division (DDR).
  3. The fines will be reduced by 30% if the main tax debt is accepted before submitting an appeal to a competent administrative court.
  4. The fines will be reduced by 25% if the main tax debt is accepted before the start of the discussion before a competent court.
  5. In any case, after the reduction of the fines, 25% of the total debt must be paid within 3 days of the acceptance of the relevant application which must be submitted electronically through an online platform, the activation of which is expected on October 1, 2024.

The remaining debt, after the reduction, can be paid in up to 12 interest-bearing monthly installments. Alternatively, it can be paid off in up to 48 interest-bearing monthly installments with the fixed arrangement.

102,573 tax audits in the territory

Strengthening tax compliance and improving the service of citizens and businesses with projects to digitize services and procedures were priorities of the Independent Public Revenue Authority for the year 2023. This was pointed out by its governor AADE, Giorgos Pitsilis, handing over to the Speaker of the Parliament, Konstantinos Tassoulas, the Authority’s Assessment Report for the year 2023, accompanied by the planning of activities for 2024. As Mr. Pitsilis emphasized, the challenges and uncertainties of the international environment were dealt with effectively and public revenues exceeded the target by 4.4 billion euros. In the fight against tax evasion and smuggling, 102,573 tax audits, 106,680 customs audits, and large-scale crossings were carried out throughout the territory. He also reported that 2.4 million requests from citizens and businesses were processed, while taxes amounting to 7 billion euros were refunded. In addition, for the protection of public health and the safeguarding of the Excise Tax in the energy and alcoholic products sectors, 120,605 laboratory tests, inspections and operations were carried out. The President of the Parliament thanked the administrator of the AADE for the thorough information and indicated that he will forward the Report to the Standing Committee on Economic Affairs and the Special Standing Committee on Institutions and Transparency of the Parliament in order to inform the relevant MPs.

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