Indirect tax snapshot
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Value Added Tax (VAT) is the main indirect tax in Greece.
Value Added Tax (VAT) is the main type of indirect taxation in Greece and in other European Union (EU) countries.
It is a tax on consumption which is applied during the production and distribution process to most goods and services. It is also applied to goods, and certain services, entering the country. Although VAT is ultimately borne by the consumer by being included in the price paid, the responsibility for charging, collecting and paying it to the tax authority at each stage of the process rests with the business making the supply, ie the sale.
A business registered for the tax will charge VAT (output tax) on its sales, and incur VAT (input tax) on its purchases (including any VAT paid at importation). The difference between the output tax and the deductible input tax in each accounting period will be the amount of VAT payable by the business to the tax authority. Where the input tax exceeds the output tax, a refund can be claimed.
A transaction is within the scope of Greek VAT if the following conditions are met:
- it is a supply of goods or services. Although the term ‘supply’ is not extensively defined in the legislation, it has a broad interpretation;
- it takes place in Greece;
- it is made by a taxable person. For these purposes, a taxable person is a person or entity who is registered for VAT in Greece, or has a liability to become registered;
- it is made in the course or furtherance of any business carried on by that person or entity.
There are three rates of VAT that are applied to goods and services in the Greece; the standard rate, the reduced rate, and the super reduced rate. In addition, some goods and services are exempted from the tax.
Businesses that make exempt supplies are unable to claim all of the input tax that they incur, so the VAT paid to suppliers will be a ‘real’ cost.
Most goods imported into Greece from outside the EU are subject to VAT. The tax will have to be paid by the importer at the time of importation. Where the importation is for business purposes and the importer is registered for VAT, it may be possible to reclaim the tax (subject to certain rules).
The new application One Stop Shop for Imports (IOSS) allows VAT payments of imported products by e-commerce, only for shipments valued up to EUR 150 and products not subject to excise-duty (tobacco, alcohol and energy products).
It is also important to note the interaction between VAT and Customs duty. Customs duty is levied across the EU at the place where goods are imported into the community. It is levied in order to bring the cost of goods produced outside the EU up to the same level as those produced within it. Once duty (and VAT) has been paid by the importer, the goods are in ‘free circulation’ and they can then be released for use in the home market. Unlike other indirect taxes, such as VAT, once duty has been paid it is not usually recoverable by the importer. It therefore represents a bottom line cost to the importing business if it cannot be passed on in higher prices.
It is therefore very important to ensure that the correct rate of duty is applied. VAT is charged on the value of the importation, including any custom duty.
A ‘person’ who either makes or intends to make taxable supplies of goods or services in the course or furtherance of a business must register for VAT in Greece. Since 2014, an exemption option may apply if the taxable person does not exceed a turnover of €10,000 per year.
For these purposes, a ‘person’ includes any legal entity. Therefore, once a person is registered for VAT, all of his business activities will be covered by the registration – even if the nature of some of those activities is very different.
VAT groups are not provided in the Greek VAT Code.
A penalty may be imposed by the tax authority if a business fails to register at the correct time.
The normal VAT registration limit does not apply to businesses who are not established in Greece, but for the purposes of the tax are making taxable supplies there. Those businesses will need to register for VAT as soon as they commence trading in Greece, irrespective of the level of turnover.
Registration for VAT in Greece may also be required where a non-established EU business is involved with distance selling. Distance selling occurs when a taxable supplier in one EU country supplies and delivers goods to a customer in another EU country who is not registered or liable to be registered for VAT.
Such customers are known as non-taxable persons, and include private individuals and businesses and other organisations that are not registered for VAT (either because of their size, or the fact that they are exempt from having to register due to the nature of their activities). The common examples of distance sales are goods supplied by mail order and via the internet.
Especially, as from 1 July 2021 in regard to distance sales the new pan European threshold for distance sales of EUR 10.000 applies, above which the taxable person is liable for VAT at the consumer's place of residence. In such case, the taxable person in one EU country does not need to get registered in another country for VAT but can easily declare and pay the VAT through the new application One Stop Shop (OSS).
The new OSS can also be used in the following cases:
- A taxable person established in the EU (who is not a deemed supplier) for supplies of B2C services taking place in a Member State in which he is not established;
- A taxable person not established in the EU for Distance sales of goods within the EU under conditions;
- An electronic interface (established in the EU or outside the EU) facilitating supplies of goods (deemed supplier) for Distance sales of goods within the EU and for certain domestic supplies of goods.
The aforementioned pan European threshold of EUR 10.000 also applies to electronically supplied services supplied to private consumers (B2C) from the Member State where the supplier belongs (ie where established) to the Member State of the consumer. More specifically, in case the threshold of EUR 10.000 is surpassed, the taxable person is liable for VAT at the consumer's place of residence.
To ensure compliance with this, suppliers have the choice to either register for VAT in each Member State where their customers reside, or elect to register under the application OSS (former MOSS) in order to declare and pay the VAT due.
The tax authority in Greece may direct a person to appoint a VAT representative to act on his behalf for VAT purposes where the person:
- is a taxable person or makes taxable supplies or acquires goods in Greece from one or more other EU countries
- is not established, and does not have a ‘fixed establishment’ in Greece
- is established in a country or territory which is not an EU country (or part of such a country).
VAT returns cover an accounting period of three months, ending on the last day of a calendar month for taxable persons having single entry books. For taxable persons keeping double entry books, such as SA and Ltd, accounting periods are monthly.
All VAT returns have to be submitted until the last working day of the month following the relevant accounting period, together
with any tax due. All returns and payments have to be submitted electronically.
A penalty may be imposed by the tax authority if VAT returns are not submitted on time, or the related tax is not paid by the due date.
The penalty is €250 per return for persons keeping single entry books and €500 per return for persons keeping double entry books. A penalty of €100 per return applies in case no tax arises from the return. Also, an interest of 0.73% per month is calculated on the amount of tax.
Businesses that are registered for VAT in Greece, and make supplies of goods or services to traders registered for the tax in other EU countries are required to complete and submit EC Sales Lists (ESLs). The ESLs must show details of the recipients of the goods and services.
The ESLs must be submitted each calendar month.
In addition, if the value of the intra-EU trade in goods dispatched or arriving from other EU is above an annual threshold, a supplementary declaration (referred to as an Intrastat declaration) has to be submitted for either or both. These declarations have to be submitted on a monthly basis.
Yes. A range of penalties can be imposed where businesses do not comply with the VAT rules.
Administrative penalties and interest can be applied for errors and omissions made on tax returns, or where the tax is paid late. Penalties can also be applied where the business has failed to maintain adequate records, provide information (including additional declarations), or makes repeated mistakes.
Criminal proceedings may be brought in the case of more serious matters.
Yes, it may be possible to reclaim the VAT incurred in certain circumstances.
Two schemes exist, one or businesses established in the EU and another for businesses established elsewhere.
The EU cross border refund scheme is available in all EU member States, and enables a business established in an EU country to recover VAT incurred in another member State. To be eligible to make a claim, the claimant must be a taxable person established in an EU member State other than the one from which the claim is to be sought. In addition, the claimant:
- must not be registered, liable, or eligible to be registered in the member State from which he is claiming the refund
- must have no fixed establishment, seat of economic activity, place of business or other residence there
- during the refund period he must not have supplied any goods or services in the member State of refund, apart from certain limited exceptions.
The amount that is refundable is determined by the deduction rules that apply in the country making the refund. The claim is submitted electronically to the tax authority from whom the repayment is being sought.
The refund period must not cover more than one calendar year or less than three calendar months – unless it is covering the remainder of a calendar year. The claim has to be made by
30 September of the year following that in which the VAT was incurred.
Businesses established outside of the EU can, subject to certain conditions, also reclaim the VAT incurred on imports into Greece or purchases of goods and services used in Greece. The scheme is available to any person carrying on a business established in a third country ie outside the EU, provided that in the period of the claim:
- they were not registered or liable to be registered for VAT in Greece
- they were not established in any EU country
- they made no supplies of goods and services in Greece other than certain specified exceptions
- where they are established in a third country having a comparable system of turnover taxes, unless the Greek tax authority allows otherwise, that country provides reciprocal arrangements for refunds to be made to taxable persons established in Greece.
A VAT invoice must show:
- an invoice number which is unique and sequential
- the seller’s name and address
- the seller’s VAT registration number
- the invoice date
- the time of supply (also known as tax point) if this is different from the invoice date
- the customer’s name and address
- a description sufficient to identify the goods or services supplied to the customer
- the rate of any cash discount
- the total amount of VAT charged expressed in Euros.
For each different type of item listed on the invoice, the following must be shown:
- the unit price or rate, excluding VAT
- the quantity of goods or the extent of the services
- the rate of VAT that applies to what’s being sold
- the total amount payable, excluding VAT.
Where a business makes retail sales a simplified receipt can be issued.
VAT invoices can be issued, received and stored in electronic format. Electronic invoices must contain the same information as paper invoices. The method used to ensure the authenticity of origin, the integrity of content and legibility of the invoices is a business choice and can be achieved by any business controls which create a reliable audit trail between an invoice and a supply of goods or services.
All invoices should be reported to the Greek Independent Authority of Public Revenues through a new electronic platform, which is called MyData platform.
The Greek Independent Authority of Public Revenues and the Greek Ministry of Finance has set new E-books reporting requirements for companies through a new electronic platform, which is called MyData platform. MyData requires all companies keeping accounting records according to the Greek Accounting Standards (L. 4308/2014) to comply and report on real time electronically to the Greek tax authorities the basic information of all the tax records they issue.
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