ECONOMY

Tax evasion for five years ?flagrant?

The Finance Ministry is putting the finishing touches to the new tax bill, mostly concerning the flagrant character of certain tax evasions, and will likely present it to cabinet in the week starting on February 14. The bill also introduces a tax ombudsman.

Following strongs reaction to the definition of tax evasion that would come under the ?flagrant? tag as outlined in the original presentation of the bill, the ministries of Justice and Finance have apparently reached an agreement that provides for tax evasion crimes to be considered flagrant if they date up to five years ago.

Finance Minister Giorgos Papaconstantinou had originally planned for all tax crimes regardless of the time element to be considered flagrant.

Sources suggest that the non-payment of value-added tax (VAT) in excess of 75,000 euros will be considered a flagrant crime for five years after it was committed. For VAT debts of up to 75,000 euros, the flagrant definition will be attributed for only the first 20 months.

?There is no such thing anywhere as an indefinite time of committing a crime,? said Justice Minister Haris Kastanidis. ?As a result, we have formed the bill in a way that respects the foundations and the doctrines of the Greek penal science,? he added.

The bill further dictates the appointment of a tax ombudsman to serve as a mediator for taxpayers? complaints and other demands. It also provides for an increase in the threshold in which taxpayers can refer their case to justice, according to sources, and includes changes to corporate taxation. Companies will see the tax rate on their earnings drop from 24 percent to 20 percent as of January 1, 2011, while distributed profits will have a 25 percent levy that will be withheld by the company.