GREECE Law and Practice Contributed by: John C. Dryllerakis, John Papadakis and Nikos Kalantzis, Dryllerakis Law Firm
6. Penalties and Sanctions 6.1 Tax Penalties
within the timeframe specified by the authorities or failure to do so may result in administrative penalties. Authorities can also access electronic accounting systems, tax returns and VAT submissions to perform reconciliations and identify inconsistencies. Audits and Tax Examinations Desk audits and field audits are routinely conducted to verify compliance. Field audits may involve reviewing books and documents on the taxpayer’s premises. Audits can examine domestic and cross-border trans - actions, with particular focus on related-party deal - ings, intra-group arrangements and transactions with non-cooperative or preferential jurisdictions. Transfer pricing audits are specifically empowered to assess whether transactions comply with the arm’s length principle and to apply adjustments where nec - essary. Searches and Fiscal Perquisitions In cases of suspected tax fraud or evasion, authori - ties may request judicial authorisation to conduct searches, fiscal perquisitions or raids at the taxpayer’s premises. Cross-Border Cooperation and Information Gathering The Greek authorities may request information from foreign tax authorities under double taxation treaties, EU directives (DAC6, CRS) and OECD frameworks, enabling investigations into cross-border tax avoid - ance and evasion schemes. The authorities can also analyse data obtained through reporting obligations, such as CbCR, VAT returns or beneficial ownership registries, to detect inconsistencies and undeclared income. Enforcement Measures Following Investigation Upon detecting fraud, the tax administration can: • adjust the taxpayer’s taxable income; • deny deductions or exemptions; • impose administrative fines and interest; and • refer cases for criminal prosecution where inten - tional fraud is identified, which can result in impris - onment or substantial fines.
The Code of Fiscal Procedure (Law 5104/2024) estab - lishes the general framework for administrative penal - ties, including fines for failure to submit or for inac - curate tax returns, non-compliance with withholding obligations on cross-border payments, late payment of taxes and breaches of bookkeeping and documen - tation requirements. In the international tax context, penalties may arise in particular from: • non-compliance with transfer pricing documenta - tion and reporting obligations; • incorrect application of withholding taxes on divi - dends, interest, or royalties paid abroad; • failure to apply controlled foreign company (CFC) rules, hybrid mismatch rules, or the general anti- avoidance rule (GAAR); • non-compliance with reporting obligations under the EU Directives on Administrative Coopera - tion (DAC), including mandatory disclosure rules (DAC6); and • failure to provide information in the framework of exchange of information procedures. The authority responsible for imposing and enforc - ing administrative tax penalties is the Independent Authority for Public Revenue (AADE), acting through its competent audit, assessment and collection ser - vices. AADE conducts tax audits, issues tax and pen - alty assessment acts and oversees enforcement and collection measures. Taxpayers may challenge penalty assessments through an administrative appeal before the Dispute Resolution Directorate (within AADE) and subse - quently before the competent administrative courts. Judicial review ultimately lies with the Council of State (Supreme Administrative Court) on matters of law. 6.2 Criminal Penalties Legal provisions governing criminal tax evasion have been incorporated in the Greek Code of Fiscal Proce - dure, pursuant to which tax evasion is considered to be committed by persons who intentionally:
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