Greece - The taxman cometh!

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AndrewH
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Greece - The taxman cometh!

Post by AndrewH »

I was telephoned and asked to attend at the local tax office last week where I was confronted by the tax inspectorate. In the politest possible way, they said that I wasn't paying any tax to the Greek government on the rent from my holiday property and why not?

I told the men that I didn't pay any such tax, but (after a pause as I watched their faces) that my Greek-registered company did. They hadn't thought of that.

Actually, I knew immediately how they found my name and phone number and where they were coming from, because I recognised from an opened file on the desk (upside down to me) a paper copy of the lead photograph on my OD listing.

I am resident in Greece and, as a property owner, it would be impossible for me to fly under the tax radar and get away with it for very long, even if I wanted to, which I don't. However many of the holiday villas and apartments on Kefalonia are foreign owned and most often these owners are British and live in the UK. They may, or may not, be aware that the Greek government expects them to file a return and declare their rental income for taxation, whether they live here or not.

Of course, these owners are out of the jurisdiction for most of the time, but they do come to the island for brief visits from time to time to check on their investment. I have heard that the tax office is wise to this and could have access to flight passenger lists. So if an owner is "under review" and is paying a visit to Kefalonia he might find himself being "met at the airport".

I say this as a warning and not as a suggestion to help evade tax.
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kevsboredagain
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Post by kevsboredagain »

I wouldn't say they are out of jurisdiction being out of Greece. Many countries do cooperate with each other and if tax is owed, they simply pass the file onto the country where you are living and add substantial charges for the privilege.
AndrewH
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Post by AndrewH »

kevsboredagain wrote:I wouldn't say they are out of jurisdiction being out of Greece. Many countries do cooperate with each other and if tax is owed, they simply pass the file onto the country where you are living and add substantial charges for the privilege.
Well I am convinced that's right. Being "out of the jurisdiction" is just a geographical thing, but being "out of reach" is not and I think there is a cosy relationship between the treasury department in Britain and the one in Greece and no doubt many other countries as well.

Until 2010 I paid tax on the rent to HMRC. Well why not. These were letting contracts made on line under English law and in a foreign currency (GB Pounds). What did Greece have to do with it? No money ever exchanged hands there; no Greek bank was ever involved, etc.

For the 2011 tax return, HMRC made it clear that rental income from tourist property abroad should not be declared to them. They didn't say so, but the inference was that it must be declared in Greece.

Talking of taxation cooperation between countries. I read fairly recently in a local newspaper that a previous Greek finance minister was under investigation. The story was that when Christine Lagarde was in her previous post, a whistle-blower employed in a Swiss bank sent her a list of names of wealthy tax dodgers who had secret accounts at that bank. The list was not confined just to French people but those from other countries as well.

A list with the Greek names was sent by her to the Greek government. The then finance minister was said to have looked down the list and spotted the names there of two relatives. He is alleged to have had the list retyped excluding the names of his relatives. This ex-minister denies all this, of course, and he looks such an honest guy.
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CSE
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Post by CSE »

Andrew, this sort of tax investigation is also going on here in Spain.
All countries these days want their taxes, some need it more than others. Some do not have the staff to do full investigations so of the expats that live is a country do not get investigated for some time. It could end up in tears for some.
I do not know about Greece, but in Spain they do not seem to have any limitation of time to ask for taxes.
There has been some big cases where the higher echelons of society here have been are being investigated for tax fraud.
Never try to out-stubborn your guests.
AndrewH
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Post by AndrewH »

casasantoestevo wrote:Andrew, this sort of tax investigation is also going on here in Spain.
All countries these days want their taxes, some need it more than others. Some do not have the staff to do full investigations so of the expats that live is a country do not get investigated for some time. It could end up in tears for some.
I do not know about Greece, but in Spain they do not seem to have any limitation of time to ask for taxes.
There has been some big cases where the higher echelons of society here have been are being investigated for tax fraud.
Well Greece certainly needs the money and whereas the civil service, in the old days, was so bloated with about 25% of the population being employed by the government, it has now been cut to the bone and something like tax investigations could take a long time for lack of staff.

I know the tax authorities have been shadowing me since last summer, but only now have been in touch with me. I know this from the analytics for our own website, which they must also have checked. We don't get much interest from Greeks with just the occasional session coming out of Athens. Out of the blue last summer someone from Patras (an industrial port on the Greek mainland) was showing particular interest in our website, repeatedly over a period of days. Common sense told me that no genuine holidaymaker from Patras would likely want to rent our villa. I also knew that the regional head office of the Greek inland revenue just happened to be in Patras.
SusiW
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Post by SusiW »

Until last year I had a Greek letting cottage. I tried to pay tax but unless you are registered with the tourist board (EOT) there is no way, my accountant told me, that the Greek tax authorities can decide what I should pay.
I was completely ripped off paying out €10,000 to get the EOT licence and was told it was mandatory to have a fridge in the bedroom, fit air con, a telephone upstairs and down, a reception area and someone had to greet guests to take their passport details. All in a one bedroomed one living room house!
Finally having done all this I was told that I had to have a Greek company to run the letting business. I gave up and sold the cottage.
I would have been happy to declare the income (I declared in UK and paid tax here) but the system just made it impossible for me.
A friend who has a licence was recently fined €2000 for not being in hand to take passport details at midnight!
So short-sighted of Greece.
e-richard
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Post by e-richard »

kevsboredagain wrote:...Many countries do cooperate with each other and if tax is owed, they simply pass the file onto the country where you are living ....
I wonder if that cooperation will cease when Brexit finally arrives?


... only kidding, I was perhaps vainly looking for a glimmer of benefit in leaving the EU :roll:
** Richard
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They say we learn from our mistakes. That makes me a genius !
AndrewH
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Post by AndrewH »

SusiW wrote:I was completely ripped off paying out €10,000 to get the EOT licence and was told it was mandatory to have a fridge in the bedroom, fit air con, a telephone upstairs and down, a reception area and someone had to greet guests to take their passport details. All in a one bedroomed one living room house!
Finally having done all this I was told that I had to have a Greek company to run the letting business. I gave up and sold the cottage.
I would have been happy to declare the income (I declared in UK and paid tax here) but the system just made it impossible for me.
A friend who has a licence was recently fined €2000 for not being in hand to take passport details at midnight!
So short-sighted of Greece.
Oh SusiW you were ripped off and were told a pack of lies. By whom, I wonder?

An EOT licence has to be applied for on your behalf by a professional structural engineer, and with government fees it certainly does cost. For two properties my EOT joint licence cost €2500!

Bedroom fridge, compulsory air con., telephones everywhere, reception area, concierge - B***S! This is what applies for (say) a 100 bedroom hotel!

I think you friend was more likely to have been fined for not maintaining an official record ledger (for names, passport numbers etc.) as supplied by the tax office. I usually complete the entries sometime after the guests have left and certainly not in a "reception area" at midnight! Someone (well four people actually plus a driver!) came round to inspect the ledger some years ago. I don't think it is compulsory any more, but I still do it.

Normally sole traders don't need to form a company in Greece. A "partnership" of two or more needs to register as a company, with a legal entity of its own. I will admit that when you form a company every Tom, Dick and Harry wants to put its hand in the pot - the Municipality, Chamber of Commerce, Tax man of course, and anything else they can think up.

I am glad you paid your income tax in the UK, because of the reciprocal arrangement between the two countries I doubt you could or would be charged again in Greece.

I don't think the Greeks are so short-sighted, but some of them (just a few) are liars and cheats :evil:
SusiW
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Post by SusiW »

Thanks Andrew. Yep ripped off and I realised WAY too late. It really began with the engineer who told me all sorts of nonsense about the house (new build to the letter) like the staircase not being wide enough. Stupidly I paid him a fake love for that and somethings went from bad to worse.
Still love Greece though. We've had a place for 30 years in S Peloponnese. Don't let that though.
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