The complex Greek VAT compliance regime has come under criticism from the Organisation for Economic Co-Operation and Development (OECD). It calls for simplified registration and return processes which could save the administration €430million per year.
This comes following an extensive report from the European Commission on the failings of the Greek tax administration which has be far the lowest rate of tax receipts vs. assessments raised in the European Union.
Better VAT registration and return compliance
Top of the list for simplification is the VAT registration process. Non-resident EU traders still have to appoint a fiscal representative despite this being in contravention of the EU VAT Directive. There is scope in the Greek legislation for a ‘direct’ registration without a local agent, but the tax authorities do not in practice offer this.
The Greek VAT registration threshold is currently. The OECD suggests that this should instead be set at €10,000 per annum of taxable turnover to take many small businesses out of the VAT administrative net as the current compulsory registration threshold is €5,000 per annum. It also calls for the sticking off of dormant companies from the VAT register.
The report also proposes reducing the number of boxes required to be completed, including less duplication, to enable a more speedy completion of the returns and less errors. Returns must be completed by the 26th of the month following the (usually) quarterly reporting period.
The report also suggests that applications for VAT credits (VAT refunds due back to companies) should be speeded up by no longer requiring taxable persons to complete separate filings with supporting invoices.
Lastly, the report recommends scrapping the Annual VAT Clearance Return, which must be filed by all VAT registered businesses by the February or May of the month following the year end depending on their classification by the tax office.