The Tax Authority has unveiled a series of robust enforcement tools at the start of the new fiscal year, aimed at enhancing compliance and improving state revenue collection. These measures, introduced as part of a broad tax reform, provide for the sealing of business premises and the pledging of shares for tax debts exceeding €100,000.
Enhanced Compliance Measures Through Business Sealing
Under the new legal framework, tax officers are now empowered to suspend operations and seal business premises if the owners fail to submit the required tax returns. Specifically, failure to file two tax declarations, a minimum of twelve monthly declarations for withholdings and contributions, or at least three VAT returns, as defined in the VAT regulation, from January 1, 2027 onward, will trigger these actions. This extension until 2027 provides taxpayers with additional time to align with their obligations.
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Procedural Steps and Warning Protocols
Prior to sealing a business, tax officers must follow a strict protocol by issuing three warnings. The initial notification is sent via registered letter or posted conspicuously at the business location, providing a 25-day compliance window. If compliance is not achieved within 10 days following the first warning, a second notification is dispatched with a further 10-day deadline. A third warning follows, accompanied by an invitation for the taxpayer to formally present their position within five days. Should the business remain non-compliant, the officer will execute the sealing order, with clear documentation of the precise timing and immediate delivery of the decision to the concerned party. In cases where the taxpayer cannot be reached, the decision will be publicly posted, ensuring transparency.
Increased Financial Sanctions and Pledge of Shares
In addition to sealing, the new measures extend to scenarios where the taxpayer fails to remit the due tax as per the declared amounts, including withholdings and VAT debts when the aggregate liability exceeds €20,000. Furthermore, the Tax Authority now has the power to pledge the shares of legal entities for tax liabilities that exceed €100,000 and remain unsettled for over 30 days. This share pledge, which can cover liabilities up to twice the outstanding tax plus accrued interest and penalties, is designed as a security measure. Prior to registration with the Company Registrar, the officer must send a written notice outlining the reasons for the intended pledge, allowing a 30-day period for the taxpayer to contest the decision.
Enforcement and Legal Ramifications
The implementation of these measures is supported by law enforcement cooperation to ensure immediate execution. For example, a visible barrier will be placed at the business entrance to indicate that the premises are sealed, with signage provided in both Greek and English. The sealing order takes effect upon publication in the Official Gazette, and any interference with the order is deemed a criminal offense subject to a penalty of up to two years imprisonment, a fine of €30,000, or both. Importantly, any legal challenge to the suspension does not halt the obligation to comply, nor does it impede the Tax Authority’s right to pursue recovery of the owed funds.
These decisive actions represent a significant shift in tax administration, reflective of a modernized approach that prioritizes fairness, flexibility, and effectiveness. By aligning enforcement with the contemporary economic landscape, the state seeks to robustly safeguard its revenue stream and ensure a more equitable fiscal environment for all parties involved.
