The Cyclades islands, and especially Mykonos, may be in the news for super-spreader parties at villas, but there is another illegal activity running rampant there, involving many participants and significant costs: tax evasion.
Given the huge amounts of money exchanging hands in the region’s property sector, especially in the summer months, and the very high tax rates on takings from rentals, the temptation is considerable for those active in managing holiday villas.
This is a sector where tourism entities estimate undeclared incomes to come to more than 1 billion euros on an annual basis across Greece.
“On Mykonos, for instance, you will find waiters renting out luxurious properties to foreigners. People working at popular spots on the island and with the right connections find their clients houses and earn a cut as go-betweens, typically working with villa management companies,” an experienced property market professional tells Kathimerini, declining to be named.
Such practices are common at destinations attracting high-income visitors from abroad who are looking for luxurious accommodation and high-end services. The problem, as recent cases have shown, is stoking the illegal economy.
In the case of villas in Mykonos, all it apparently takes is for a ghost agency, such as private capital company, to be set up for a period of just a few weeks, usually during the tourism season.
Inspectors at the Independent Authority for Public Revenue have identified such agencies that were based in central and southern Athens and had branches in Mykonos through which they reaped profits from luxurious villas rented at very high rates to foreigners.
The cash collected from rent is not declared in full or at all. An IAPR inspection found rental rates of €18,000 per day without a trace of a receipt, with the first batch of inspections landing cases of tax evasion adding up to more than €1 million.
There is little –if any – doubt that the more this market segment is probed, the higher the sum of the evasion will be.
Property market experts say those involved in such transactions make sure the deposits are made in foreign banks so as to make it even more difficult to trace them.