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Greek Officials Probe Tax Scam Over Political Donation Claims

August 21, 2018

ATHENS – Unable to contain runaway tax evasion, Greece’s Independent Authority for Public Revenue (IAPR) has also reportedly found large-scale fraud with accountants working with clients to get refunds for non-existent political donations.

IAPR is expected to send thousands of notices to taxpayers who amended their initial tax declarations and managed to either significantly reduce their due tax or to secure large tax refunds due to suspicion of a scam on the state, Kathimerini said.

That came after the country’s financial crimes unit, SDOE, said accountants and possibly taxpayers were trying to cheat the state out of 5 million euros ($5.71 billion) by claiming fake donations toward political parties or to pay down the country’s soaring debt.

If approved, the claimants would receive a 20 percent deduction and a refund which in some recorded cases could reach 45,000 euros ($51,353).

Accountants said tax offices usually only request proof of such expenses when the tax refund exceeds 10,000 euros ($11,411) but that even that doesn’t always lead to audits, although the agency said it had also found 60 percent of businesses were cheating on taxes.

An electronic tax system has been in place requiring the use of Point of Sale (POS) machines in businesses and by professionals such as doctors or lawyers, but many claim they are not working when people want to pay by card and have to use cash instead which can he hidden from authorities to avoid taxes.

Audits checking for fraud will target people who claimed large refunds and who will be required to produce documents proving they made donations. If they didn’t, they will be fined but not prosecuted nor any jail time sought despite defrauding the state, common in Greece.

IAPR head Giorgos Pitsilis told Real FM radio the scam was discovered two months ago and authorities immediately changed the software for submitting declarations so big refunds were blocked and audits ordered, showing 150-170 suspicious declarations so far.

He said it wasn’t clear whether accountants did it on their own or if taxpayers were complicit.

Pitsilis mentioned several cases where the bank accounts provided did not belong to the taxpayers who had filed for a tax refund hinting that the money may have gone elsewhere.

To prevent such scams in future, Pitsilis said authorities are cooperating with banks to come up with a system linking clients’ IBANs with their tax identification numbers.

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