Greece's Governor of the Independent Public Revenue Authority (AADE) provided guidelines¹ regarding the implementation of certain Administrative Supreme Court (Symvoulio Epikratias) Decisions² as well as the Legal Opinion no. 268/2017 of the Legal Council of State, with respect to guidelines on the time limitation for tax audits.

Specifically, said circulars set forth the following provisions with respect to the time limitation period of the State's right to impose taxes and fines.

• 5-year limitation period – based on the general rule – applies to fiscal years from 2012 onwards, as well as to the tax years for which the Tax Procedure Code (TPC) applies (i.e., from 2014 onwards), except for the specific exceptions set out in the relevant provisions of the TPC. Thus, the right of the State to impose tax prior to and including fiscal year 2011 has been time-barred and it is therefore not expected that final corrective assessments for tax and penalties will be issued in cases with pending audit orders or for which the audit has already begun (Decision no. 1738/2017, Circular 1154/2017), unless special provisions extending the limitation period to 10, 15 or 20 years are applicable (see below). It should be noted that the right of the State to audit fiscal year 2011 was time-barred as of 31 December 2017.
• 10-year limitation period – in the case of (new) supplementary data – applies for fiscal years from 2007 to 2013. Furthermore, in accordance with recent jurisprudence (Decisions no. 2934/2017 and 2935/2017), as adopted by the tax authority (Circulars 1191/2017 and 1194/2017), the Administrative Supreme Court (Symvoulio Epikratias) held that according to article 68 par. 2 a' of L. 2238/1994 (Income Tax Code), supplementary data does not include data that was either known to the tax authority within the 5-year limitation period and not taken into consideration accordingly or the tax authority had to take the data under consideration within the above mentioned 5-year limitation period but no action, provided by the law, had been duly applied (e.g., data that may not be deemed as "supplementary data" are balances or money transfers with regards to domestic bank accounts or money transfers sent from a domestic bank account to a foreign bank account and vice versa). It should be noted that, the right of the State to audit fiscal year 2006 was time-barred as of 31 December 2017.
• 15-year limitation period – in the case of non-submission of an income tax return – applies for fiscal years from 2002 until 2013, since the right of the State to audit fiscal year 2001 was time-barred as of 31 December 2017. It is noted that the 15-year limitation also applies in the case of late submission of an income tax return (Legal Opinion no. 173/2006 of the Legal Council of State).
• 20-year limitation period – in the case of tax evasion within the meaning of article 66 of TPC – applies for fiscal years from 2012 onwards (Legal Opinion of the Legal Council of State no. 268/2017 and Circular 1192/2017). More specifically, the AADE upheld the Legal Opinion no. 268/2017 of the Legal Council of State, which ruled that the provisions of the 20-year limitation period regarding tax evasion are applicable on pending tax audits for fiscal years 2012 and 2013 (not prior to fiscal year 2012), since the right of the State to audit fiscal years from 2012 and onwards is not yet time-barred. It should be noted that the tax evasion offense consists of intentionally avoiding to pay tax which exceeds (per tax year and per type of tax), the amount of €100,000 for income and withholding taxes and the amount of €50,000 for value added tax (VAT).

Further, the following clarifications are provided:

• Τhe limitation period shall begin at the end of the year in which the deadline for the submission of the tax return expires.
• The limitation period for fiscal years for which companies received a tax certificate is beyond the scope of the present guidance.
• The above limitation periods apply to income taxes and to infringements under the Code of Books and Records and of the Tax Transaction Reporting Code, while for VAT, property taxes and stamp duties, among others, different limitation periods may be applicable.

Finally, the 20-year limitation period of the right of the State to impose stamp duty until fiscal year 2013, i.e., before the entry into force of the TPC, raises high concerns and it should be duly addressed in the light of the Administrative Supreme Court's (Symvoulio Epikratias) Decision no. 1738/2017 (i.e., 5-year time limitation period) and in accordance with the general principle of proportionality (reasonable duration of the limitation period).

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ENDNOTES

¹ Under circulars no. 1154/2017, 1191/2017, 1192/2017 and 1194/2017.

² Decisions no. 1738/2017, 2932/2017, 2934/2017 and 2935/2017.

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CONTACTS

For additional information with respect to this Alert, please contact the following:

Ernst & Young Business Advisory Solutions S.A., Athens

• Stefanos Mitsios
  stefanos.mitsios@gr.ey.com
• Dimitrios Alexopoulos
  dimitrios.alexopoulos@gr.ey.com

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ATTACHMENT

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