Tax evasion: Zero income or losses reported by 1 in 3 Greek freelancers

The Ministry of Finance wants to scrutinize 221,000 professionals who appear at the Tax Office with zero income or with losses.

With the new bill presented at the next cabinet meeting, the government’s economic staff will attempt a strong blow to tax evasion, which in terms of VAT alone cost the state coffers 3.2 billion euros in 2021.

With myDATA as a key weapon, electronic invoicing, locked and pre-filled codes for income and expenses in income tax and VAT returns, the expansion of POS throughout the market and the interconnection of cash registers with POS, the financial staff aims to reveal of the real incomes of professionals and the self-employed.

The data

According to the data provided by the Minister of National Economy and Finance Kostis Hatzidakis, out of a total of 676,000 tax statements of self-employed professionals, 32.7% declare zero income, an additional 25.5% declare income up to 5,000 euros and there is also a rate of 20% which indicates incomes over 10,900 euros.

As stated by Kostis Hatzidakis, “we will not increase the tax rates for the self-employed” but in the ministry’s plans are changes in their taxation system with the aim of a “fairer system” that will allow the abolition of the profession fee while creating fiscal space for the reduction of the tax burden as a whole, over time.

As part of the fight against tax evasion, by the end of the year, a decision is expected to be issued on the sectors that must have a POS, which will stipulate that at the beginning of 2024 they will have to have a POS and accept card payments taxis, cinemas, street markets, kiosks, grocery stores, insurance companies, brokerage firms, concert venues.

The “VAT gap”

In the meantime, according to the Commission’s report on the “VAT gap”, Greece, in 2021, lost 17.8% of the VAT revenue it could have collected, or 3.231 billion. euros due to tax evasion and fraud. Although it is in third place among the EU countries. with the biggest VAT losses after Romania and Malta, Greece managed to close the “VAT gap” by 3.2 percentage points compared to 2020 which had formed at 21%.

The total gap in VAT at EU level decreased by approximately 38 billion euros as from 99 billion EUR in 2020 was limited to EUR 61 billion in 2021 with the percentage of losses forming at 5.3% from 9.6%.

With the interventions launched on the tax evasion front, the Ministry of Finance aims to reduce the “VAT gap” to 9% by 2026, which brings at least 2 billion euros annually to state coffers that will be used for new tax breaks.