Dozens of VAT were “locked” by AADE for VAT fraud

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Dozens of tax frauds are revealed every month by the audits of AADE, under the pressure of the Commission for the reduction of tax evasion in the field of VAT, where our country has the worst performance in the EU, after Romania.

However, there are multiple cases that are not revealed and lead to in VAT losses of more than 5 billion euros, annually as well as income taxes.

According to the official data of the Independent Public Revenue Authority, in the ten months of January-October, the YEDDE completed 156 VAT fraud investigations, while it is in progress 158 more surveys.

Based on the findings of the YEDDE investigations, the competent services proceeded to deactivation 126 VAT of which 11 “froze” in October. These are natural and legal persons who are characterized as “Disappeared merchants”.

The missing public revenues from the specific cases amounted to EUR 25.6 million, a minimum amount, compared to the amount of 5.35 billion euros, estimated annual losses from VAT, according to the Commission.

Regarding the rate of delinquency, amounts to extremely high levels and in particular at 80.8%, as of the 156 cases for which the audits were completed in the seven months, serious tax violations were found in 126 and the AFMs were deactivated.

According to the report of the Commission, the losses that Greece had in VAT in the year 2019 amounted to 5.35 billion euros, with the percentage of losses to amount to 25.8% of the estimated receipts.

The amount is reduced compared to 2018 when the missing revenues were set at 6.237 billion euros, when again our country was in second place in EU countries. The escalation of VAT fraud in Greece is also confirmed by the data of AADE, for the imposition of sanctions on those involved.

How they disappear

“Missing traders” are a scourge for the tax authorities of all EU countries and especially in Greece which is among the first countries in tax evasion.

The usual practice of fraud is the type “Carousel”, during which the goods, after entering Greece, form a circle between different companies within the European Union, which belong to the same person or circuit. Alongside offset the VAT corresponding to the goods, with fictitious invoices issued by the companies of the same circuit.

Also, when the goods enter from a third country, in Greece they are destined for another EU country, e.g. Bulgaria. The corresponding VAT is not paid here, which must be paid by the company that is in Bulgaria.

The Bulgarian company, which belongs to the same circuit, credits the bank account of the Greek company to make it appear that the transaction was performed, but the products never reach Bulgaria or another country and are available in the domestic market, without VAT 24%.

The company, which had to pay the VAT, disappears as if by magic, leaving debts to public insurance funds and suppliers.

When does the TIN “freeze”

According to the tax legislation, the process of deactivation of VAT is carried out in cases where a case of tax evasion is identified but also as a precaution, if the control of the authorities reveals that:

  • Have not filed income tax and value added tax (VAT) returns for two consecutive years
  • An audit or autopsy of the Tax Authority shows that there is no economic activity of the company or
  • An audit or autopsy of the Tax Authority shows that he has declared false or inaccurate information in order to be granted a Tax Registration Number (TIN).
  • Found to have incomplete or incorrect holder information.
  • An audit revealed fraud against the public.
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