Greece’s Independent Authority for Public Revenue (IAPR) is reportedly planning to send thousands of notices to taxpayers who amended their initial tax declarations and managed to either significantly reduce their due tax or to secure large tax refunds due to suspicion of widespread tax fraud.
The move came after the country’s financial crimes unit, SDOE, this week said that an unknown number of accountants and possibly taxpayers had attempted to cheat the state out of a total of 5 million euros by claiming fake donations toward servicing the Greek debt or political parties. If approved, the claimants would receive a 20 percent deduction and a refund which in some recorded cases could reach 45,000 euros.
Accountants say tax offices usually only request proof of such expenses when the tax refund exceeds 10,000 euros, but they admitted that even such amounts don’t always trigger an audit.
As authorities struggle to curb tax evasion, this deception shows the electronic tax system has loopholes which accountants could abuse to extract significant amounts without being caught.
The audits will begin with individuals who secured the biggest refunds in the last five years and who will be summoned by their tax office to present the original documents verifying their donations. If they fail to do so, authorities will recalculate their tax and issue heavy fines.
IAPR head Giorgos Pitsilis told Real FM radio Friday that the scam was first discovered two months ago and authorities immediately changed the software for submitting declarations so that large refunds could not be claimed and the cases are sent to tax offices for an audit. Authorities have so far identified 150 to 170 suspicious declarations, he said.
He added that it is not clear whether those who falsely claimed a large tax refund were aware of it, as authorities suspect that in some cases their accountant may have filed the amended declaration without notifying them.
Pitsilis mentioned several cases where the bank accounts provided did not belong to the taxpayers who had filed for a tax refund.
To prevent such scams in future, Pitsilis said authorities are cooperating with banks to come up with a system linking clients’ IBANs with their tax identification numbers.