Pages

Wednesday 24 April 2013

One-billion-euro tax evasion per year through renting luxurious villas in Greece – foreigners involved?

One-billion-euro tax evasion per year through renting luxurious villas in Greece – foreigners involved?Posted by in Economy
I remember some months ago, when veteran politician Manolis Glezos from left-wing SYRIZA had urged tax authorities to investigate tax evasion in connection with rent-a-villa scheme via the internet and other luxury accommodation to foreigners. Glezos had claimed, that the owners of these accommodations in favorite tourist destinations like the islands or the Mount Pilio would not declare the amount they would cash and they would hide several thousands euros from the authorities. Glezos had claimed further that many of these owners were German and Austrians, who “at the same time we pointing their fingers to Greeks for avoiding paying taxes.”
Today, news website Zougla.gr published first results of the investigation and showed how the tricks to evade taxes work.

Many of these accommodations belong to offshore companies, making it impossible to identify the real owner.
Two tricks help property owners to escape paying taxes and cause a fraud worth more than 1 billion euro per year!
1) a law clause called “urban rental contract” and 2) “invisible renting” through the internet.
The foreign tenant rents a villa for a couple of days or weeks. Hardly for longer than a month.
The tenant makes a down-payment to a bank account of the offshore company, the rest is paid upon arrival and use. The tenant receives the receipts in the name of the offshore company.
This ‘rest amount’ paid in the country is sent to tax authorities through the ‘urban rental contract” (it refers to contracts for accommodation longer than 90 days;  property owner has a month time to submit it to the tax office). This “urban contract” contains false tenant’s names, false signatures, false rental periods and false leasing prices, much lower hat the real leasing prices.
The norm is that the owner submits the contract after the tenant has gone.
Should any control occur while the villa is rent, the owner can show a ‘fake urban renting contract’ with the much lower price.
Financial Crime Units of the Greek Finance Ministry (SDOE) started the investigation in several luxury accommodations in the islands of  Naxos, Paros, Antiparos, Syros and Mykonos already in August 2012.
Complaints reached the Association of Greek Taxpayers claimed that “these kind of accommodation are illegally rented for 500-8.500 euro per week without the property owner ever paying taxes for this income.”
Manolis Glezos had claimed that on the island of “Paros there were 1,300 luxury villas with swimming pools owned by western European foreigners who rent them via the Internet versus 750 euros per day, without their owners to declare their income.” (Zougla story in Greek)
Control is difficult to impossible because of the rental via the internet. Οften the ‘tenants’ are presented as ‘hosted friends on vacation,” daily Ethnos had noted last January, stressing that the tax authorities were planning to investigate German, Austrian and British owners of luxury villas and accommodations. Zougla.gr reported today that many villas had Greek owners hiding behind offshore companies.
PS We will have more information once the SDOE feels ready to issue the investigation results, I suppose.

No comments:

Post a Comment