BUSINESS

Migration of firms, freelancers to Cyprus and Bulgaria is growing

EVGENIA TZORTZI, PROKOPIS HATZINIKOLAOU

TAGS: Economy, Taxation

The mass migration of Greek businesses and freelance workers continues unabated as they escape the overtaxation and huge social security contributions at home.

The latest data show that the number of Greek enterprises registering in Cyprus rose 77 percent last year from 2015, while auditing firm consultants note that the trend is growing this year. From 1,012 Greek firms and freelancers moving to Cyprus in 2015, the number rose to 1,799 in 2016, bringing the total number of Greek businesses there to 5,200 from 2012 to December 2016.

Bulgaria, according to major tax adviser firms in Thessaloniki, has seen a 30 percent annual rise in the number of Greek companies and freelancers registering in the first half of the year.

In both Cyprus and Bulgaria, tax rates and social security contributions are far lower than in Greece. As one entrepreneur who relocated to Bulgaria explains, if he had not made the move he would not only have gone of business but would also have accrued huge debts and been unable to pay suppliers and banks.

However, he adds he that he is finding it hard to do business with Greek firms as these claim to have received veiled threats from tax inspectors against accepting Bulgarian invoices, saying they will not be acknowledged as spending expenses.

For the time being though, inspections concerning Greek businesses in Bulgaria have been haphazard, as there is no agreement yet on data exchange between the two countries. Sources say that the tax authority wants to see such an agreement adjusted to the standards of the Organization for Economic Cooperation and Development.

Checks are mainly taking place at customs offices, while there have recently been inspections on cars that changed license plates. Provisional checks on 500 vehicles that acquired Bulgarian plates in the second half of 2016 showed that this was done so that the owners saved money from the high road tax in Greece and from income tax hikes based on their assets.

The latest figures show there are about 15,000 Greek companies in Bulgaria, although Deputy Finance Minister Katerina Papanatsiou said earlier this month that eight in 10 Greek firms in Bulgaria have a registration number but no activity, so as to evade taxes.

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