greece tax evasion swimming pools

One visitor to the yacht was John Paul Papanicolaou, a well-known ship owner and friend of Onassis. } For countries likeGreece, the thresholdof individual income tax is at 39% - very close to the current rate. //end OneTrust Redirect 'path' : '/id/100875192' , Greece's gov't budget is about 120 billion these days . The partners goal was to refurbish the yacht and restore its past glory, so they could charter it profitably. Harry Karanikas is a reporter for the newspaper Ta Nea. Yet signs of wealth abound. Economist Evangelos V. Vasilakos, a former general director for armaments at the Greek Defense Ministry believes that defense contractors should not be part of the largely unaccountable offshore economy. function isOneTrustAnyBlocked() { In other words, in 2011, 8% of taxpayers paid 69% of the personal income tax, and 0.4% of businesses paid 61% of legal entity income taxin Greece. var pixelurl = ((document.location.protocol === 'https') ? Tax Rate. Eager to show a tougher face to a disgusted public, the Greek government is on a crusade. They are so furious at what they see, she said. Very small businesses (0-9 people) in Greece employ a staggering 59% of all workers in the country -double the EU average. As the nation of Greece teeters on the edge of bankruptcy, its tax authorities are taking aim at Greece's notorious tax-evading rich elite. The document proposes hiking taxes on luxury items such as planes, helicopters, gliders and swimming polls to 13 percent from 10 percent. Read MoreGreek crisis: 2,400 hours of brinkmanship. But he insisted that Greece's alternative proposals and ideas were the most viable. if (!matches) { 'hline' : 'Europe News' , The tax is calculated as a percentage on the rents received. //begin OneTrust Redirect We are a participant in the Amazon Services LLC Associates Program, an affiliate advertising (function() { .filter(categoryPreference => !categoryPreference.includes('0_') && categoryPreference.includes(':0')) You cannot heat this house or buy the gas for the car with that kind of income.. Accountants say efforts to overhaul the tax code also have failed. For companies, a capital gain adds to regular income and is taxable at the same rate as regular income. However, European news organizations such as the U.K.'s Guardian newspaper reported the proposals as fact. Non-Dom Tax Regime In Greece in 2011, there were 220,000 businesses that declared less than 1.2 million euros annual profit, and just 901 businesses that declared greater income. } In 2010 the Hellenic Labour Inspectorate audited 22,000 private enterprises and found that a quarterof employees had not been declared. mps._log('**** LOADED: Google PII Fix - cnbc-cms-header-insert'); if (result && result.geo && result.geo.country_code) { According to research by the Ministry of Labour, 27% of those working undeclared had asked theiremployers to allow it. Kanellopoulos said that in 1998 his team at the Finance Ministry discovered the shocking scale of Greek offshore interests 2,400 companies registered in tax havens in the Pacific and the English Channel. European markets ticked lower as the Greek drama continued on Thursday, and Craig Erlam, a senior market analyst at foreign exchange firm OANDA, said in a note that focus was now on whether the gaps between lenders could be bridged. }; According to Le Parisien newspaper, an average pool of 30 sq m (322 sq ft) is taxed at 200 (170) a year. At the same time, however, during the crisis, direct tax rates increased, and new direct taxes were also introduced(solidarity tax, Single Property Tax-ENFIA), which softenedthe states losses but increased the tax burden for everyone -primarily for the poor. Such incomes defy belief, said Ilias Plaskovitis, the general secretary of the Finance Ministry, who has been in charge of revamping the country's tax laws. Independentie Skip to navigation [n] It is estimated around 4-5 percentage points above the average ofthe European Union. Published 3:23 AM ET Wed, . The Greeks last night agreed to send a compromise on how to solve the few outstanding issues. A lawyer for ISI Hellas SA, Nicholas Karambelas, said Bounty Investments currently owns 40 percent of the Greek defense contractor and has fully satisfied each obligation it has to the Greek tax authorities. Karambellas said the other two BVI entities are dormant. He said the offshore firm Interoperability Systems International Ltd. has no tax liabilities because it never raised any capital. Starting January 1st, 2022, there are new "objective values" for real estate that affect taxes when buying and owning properties in Greece. Thirty-four of them claimed less than $13,300, a figure that exempted them from paying any taxes at all. At the same time, however, 35,1% acknowledge that they would readilyevade their taxes if the opportunity arose, because everyone doesit., Anyone can read what you share. The likelihood of detection and punishment. "updatecorrelator" : true It used the same registered agent as the Greek military contractor, Commonwealth Trust Limited. mps._adsheld.push(adunit) TIL that with only 324 households declaring ownership of a swimming pool on their tax form and fearing tax evasion, Greek authorities turned to satellite imagery for further investigation of Athens' northern suburbs. Until recently, only nine auditors were assigned to a list of 54,000 cases involving money sent abroad, even after 24,000 of those cases were deemed likely to involve tax evasion, he said. Read the rules you agree to by using this website in our Terms Help us change the world. But despite such headline-grabbing efforts and an astonishing number of new tax laws (22 in the last two years), some question whether the authorities are actually making progress. mps._queue.gptloaded = mps._queue.gptloaded || []; The comparison would see Greek tax evasion reduced to the eurozone level. None of the Cook Islands entities created by Papanicolaou and Fitzpatrick to acquire and remodel the yacht appear in the list of Greek-owned offshore companies maintained by the Ministry of Finance. } But perhaps as troublesome, some experts say, is the growing grass-roots anger that led the customers to turn against the four tax inspectors recently in Archanes. The exact scale of tax evasion in Greece is obviously unknown. It is not synonymous with tax evasion. The complete reconfiguration of the tax system towards simplification, tax rate . } © 2023 Dianeosis. 2023 CNBC LLC. Both men were named directors of Christina GP in the company documents but they used a nominee firm, Stockcorp, as shareholder. Sources within the Ministry of Finance gave ICIJ a list of more than 23,000 companies incorporated in other countries, including tax havens, and that have been registered with Greek tax authorities over the years. In the past, Greek authorities derided the countrys tax collectors as lazy and corrupt, blaming them for many of the problems with the system. Tax evasion in Greece is a difficult, structural problem of the Greek economy. The corporate income tax has increased, in the form of anadvance tax burden. It named two companies as nominee directors of Karpathia. TL;DR:Still trying to figure out what READ THE REST, We thank our sponsor for making this content possible; it is not written by the editorial staff nor does it necessarily reflect its views. script.setAttribute("onload", "setAdblockerCookie(false);"); Swimming Pools, Intex Swimming Pools, Coleman Swimming Pools; Additional site navigation . if (typeof adunit != "string") return false; Why arent they going after the big fish? he asked. All rights reserved. just 324 residents checked the box on their tax returns admitting that they owned pools. ', window.location); })(); Such evasion has played a significant role in Greeces debt crisis, and as the country struggles to get its financial house in order, it is going after tax cheats as never before. mps._debug('[MPS]: email address detected in url, bypass gpt. mps._queue.mpsloaded.push(function(){ CMC Markest analyst Michael Hewson said there were hopes that enough common ground could be found to be able to see the IMF debt "either paid on time or at least deferred without too much fuss and rolled up into the remaining repayments later this month, in the almost certain probability that a deal can't be concluded this week. return true; Soon, Mr. Plaskovitis said, people will see results. According to Tzoni, ship owners in Greece use offshore entities routinely because they facilitate business with foreign partners. People are so angry and so poor, said Nikolis Geniatakis, who has run his restaurant here on the main square for the last 34 years and who watched the confrontation from across the street. According to the most recent data from 2015, 88% of the states revenue (not including insurance revenue collected by the social security funds) comesfrom taxation. If we focus more on the Greek case, we can identify 8 main causes for tax evasion: The first two problems are obvious, and linked to eachother. Growth is the only way to achieve fiscal consolidation. At the same time it inevitably causes uncertainty for tax payers andtax administration employees alike. We were busy going over forms, checking on those who pay taxes, not those who didnt., https://www.nytimes.com/2010/05/02/world/europe/02evasion.html. 'https' : 'http') + '://pix.nbcuni.com/a-pii.gif?X=piiblock&S=' + mps.pagevars.instance + '&P=' + mps.pagevars.mpsid + '&A=' + i + '&U=' + encodeURIComponent(window.location.href) + '&_=' + window._mpspixZ; Boing Boing is published under a Creative Commons let cStart = document.cookie.indexOf(`${name}=`); Since 1975, Greece has voted in 250 tax laws and 115,000 ministerial decisions. A government survey by aircraft two years ago found thousands of Greeks had swimming pools but didn't list them so they could avoid being taxed. They made Christina GP one of the partners. Its not a conspiracy to get the small guy, he said. Others are linked to a defense contractor working for the government and to top Greek executives who made a fortune on bonds sales. .map(categoryPreference => parseInt(categoryPreference.split(':')[0], 10)); Taxpayers with a five-year-old car of 1929 cc will have to pay 418.70 euros, while owners of 3,000 cc vehicles must pay 1,780 euros. The cheating is often quite bold. Greece's shadow economy (i.e., unreported income) is about 25% of the country's gross domestic product. const matches = oneTrustCookie.match(COOKIE_REGEX); We want to hear from you. 'cag[type_cnbcteam]' : 'CNBC Europe Team' , Guide to Real Estate Photography (Greek PDF), Taxes for foreigners who own properties in Greece, Properties with swimming pools, either indoor or outdoor ones, are subject to a tax called , For properties with swimming pools, another tax-related amount occurs. mps.__timer = Date.now ? You need more than that to pay your rent in that neighborhood, he said. Common ground was found over lowering the primary budget surplus requirement for Greece, Tsipras said, but differences remained over some pension and taxation changes. The paper quoted a senior finance ministry official as saying too much time had been wasted on investigating past fraud and that the focus should now be on new cases. But he said that he was also confronting a resistant bureaucracy. Corporate Taxation in Greece. They did not. monkey". Papanicolaou sold his stake in the Christina O, according to the executor of his estate, Mariella Tzoni. if (cEnd === -1) { 1730 Rhode Island Ave NW, Suite 317 typeof mps._gptfirst == "function" && mps._gptfirst(adunit, slotid); Greeks shadow economy represents 20 to 30 percent of its G.D.P. On the other hand, the 8% of taxpayers who declared income above 42,000 -around 400,000 citizens in total- paid 69% of the total personal income taxes. He contended that the special low tax rate was given to make up for the fact that doctors received very low pay. These expenses include thegovernment's operating costs, repayment of the country's loans (around 12 billion a year), pension payments (28 billion a year), salaries of public employees (around 15 billion a year) and, according to the memoranda that have been signed with Greeces creditors, significant annual primary surpluses. var foresee_enabled = 1 For example: The Greek state's annual revenue hoversaround 50 billion. Thisis considered an exceptionally high rate, much higher than the ratesin over-taxed Greece (personal income tax in 2012 was calculated at 38%, for example). Its legal, nothing peculiar, she said. Read MoreTime to talk about capital controls in Greece. What were the tax inspectors doing here? The amount depends only on the surface of the pools and is paid annually, along with the rest of the taxes, usually in 5 instalments. window.location.href = `/opt-in-check?pub_referrer=${encodeURIComponent(url)}`; After the 2008 recession, the government placed a luxury tax on private pools. Yet only 324 households in those areas had ticked the box on their income tax forms admitting to pool ownership. mps._adsheld = []; It has to do with the economy's structure, the high number of self-employed workers, the small average size of companies. Until that point, he said, the existence of Greek-owned offshore entities was known only to a handful of law firms that had helped their clients set up the companies. Thus, 16,650 pools were left out of the count that's 98%. The first 12.000 is taxed at 15%, which means that if you earn 12.000 from rent, the tax you will pay is 1800. So far, no one on the Lagarde list is facing legal action, though officials, answering questions in Parliament earlier this month, said 150 audits were under way. They discovered a total of 16,974 swimming pools. In 2005, Commonwealth Trust Limited, an offshore services firm that BVI authorities sanctioned for its lax anti-money-laundering controls, took over management of the three companies. Mr. Alexiadis pointed out that Greece has only 0.87 auditors for every 1,000 citizens, compared with Germanys rate of 1.36 and Belgiums 2.67. 22%. Friedrich Schneider, the chairman of the economics department at Johannes Kepler University of Linz, studies Europes shadow economies; he said that Greeces was at 25 percent last year and estimated that it would rise to 25.2 percent in 2010. . In the past, the tax code gave many categories of workers special status. Of the three BVI entities, only Bounty Investments Ltd appears in the list of offshore companies kept by the Ministry of Finance and reviewed by ICIJ. Campaigns to create fiscal consciousness have been successful in India, Israel and Mexico. Some of the shareholders of the offshore company were managers of ISI: David Adams, Johan Boskemper, Gerhard Mazenier, Heinz Winter and David Tham. Tzoni said that her client never received any income from the ship; therefore, she said, he didnt need to report taxes. Gift tax is now levied on the amount of 800,000, and corporate tax and VAT rates have been reduced for businesses. Athens' proposals are just one side of the story, however, with Greece's creditors suggesting their own for the struggling nation. This website uses cookies to ensure you get the best experience on our website. CONTENT_SELECTION_AND_MEASUREMENT: 7, 'content_id' : '100875192' , Its obviousthat tax evasion/tax avoidance at this level, though serious, is on the one hand very difficult to identify by individual states and on the other, much smaller in scale than tax evasion bythe self-employed and small businesses. In particular, attempts to cast a broad net have only fueled public anger at the wealthy, who are often seen as the main culprits. Some attribute it to Greeces long history under Turkish occupation, when Greeks got used to seeing the government as an enemy. It is a mess.. Some of these definitely could use these methods to avoid some of their tax burden. 'keywords' : '~' , The cheating is often quite bold. "This is the last effort and it seems the President of the Commission will try to find a solution with Mr Tsipras. It will also audit and tax companies that are incorporated in tax havens but are conducting business in Greece. But she contends that the politicians never wanted toughness. In most cases, the wealthy have spent only a day or two in jail before being released. At the time the F-16 contract began in 2003, a BVI entity called Bounty Investments Ltd. owned 33 percent of ISI Hellas S.A. head = document.head || document.getElementsByTagName("head")[0], mpsload = document.createElement("script"); Taxes on property, gifts and business income in Greece: changes in 2022. To be sure, there have been some high-profile arrests in the last year. Two years later, he set up shop in one of the worlds most secretive offshore jurisdictions, the Cook Islands in the South Pacific. Who will be eaten first? For years, economists have pointed to rampant tax evasion as one of the countrys most serious problems, depriving the government of money it badly needs. According to a recent report by the European Union and the International Monetary Fund, Greeks owe about $70 billion in unpaid taxes to the state, about a quarter of the countrys gross domestic product. var _regex = /([^=&/<>()[].,;:s@"]+(.[^=&/<>()[].,;:s@"]+)*)@(([[0-9]{1,3}.[0-9]{1,3}.[0-9]{1,3}.[0-9]{1,3}])|(([a-zA-Z-0-9]+. }; Today, however, a solution is imperative, and, perhaps for the first time in the country's recent history, possible. Finally, the rates of the "special solidarity tax", property taxes, the VAT rates on products and services, as well asconsumption taxes on alcohol, tobacco and fuel have all increased. }; 'type' : 'mobile: cnbcnewsstory' , const EEA_REGION_COUNTRY_CODES = ['AT', 'BE', 'BG', 'HR', 'CY', 'CZ', 'DK', 'EE', 'FI', 'FR', 'DE', 'GR', 'HU', 'IS', 'IE', 'IT', 'LV', 'LI', 'LT', 'LU', 'MT', 'NL', 'NO', 'PL', 'PT', 'RO', 'SK', 'SI', 'ES', 'SE', 'CH', 'TR', 'GB']; Another way Greeks use offshore companies is to buy and sell bonds thus keeping the arrangements cloaked in secrecy and avoiding taxes on the profits, according to Panayiotis Douvis, author of the book Offshore Activities and former director of investigations at the Greek Financial Crimes Unit. The Finance Ministry issued a brief statement denying the story. Redirecting. boingboing.net 87K 3.6K comments Add a Comment Persio1 2 yr. ago A Division of NBCUniversal. return _regex.test(_qs); In contrast to what many believe, the largest part of the shadow economy (around two thirds of it) is attributable to undeclared employment - and that is one sector that has increased rapidly during the crisis. "You cannot heat this house or buy the gas for the car with that kind of income. 'cag[attribution_source]' : 'Reuters' , About 30 billion euros is believed to be drifting through the country, off . TL;DR:This Mother's Day, give your mom READ THE REST, We thank our sponsor for making this content possible; it is not written by the editorial staff nor does it necessarily reflect its views. Some of the most aggressive tax evaders, experts say, are the self-employed, a huge pool of people in this country of small businesses. Many of the Greek-owned companies in the ICIJ data are incorporated in the British Virgin Islands (BVI), a chain of coral and volcanic islands in the Caribbean. Tax Evasion in Greece - The Full Study (PDF, in Greek). Mr. Plakopoulos, who supports most of the governments new efforts, admits that he and his friends used to chuckle over the best ways to avoid taxes. The courts have ruled that the threat of losing electricity is illegal. Tax evasion in Greece is a difficult, structural problem of the Greek economy. Global Business and Financial News, Stock Quotes, and Market Data and Analysis. Greek citizens who own or direct offshore companies in the British Virgin Islands and other tax havens rarely declare them to Greek tax officials, an International Consortium of Investigative Journalists' review of more than 100 companies shows. This is a critical characteristic of the Greek tax problem: in Greece, the percentage of the self-employed is twice as high asthe European average. } It also suggests a tax on "recreational vessels in . In Greece, of course, as we have mentioned before, there are only 901 large corporations(we define as "large" those with annual profits over1.2 million) just 0.4% of the total. "The messages coming from the talks are extremely mixed and even the creditors can't agree on a consistent stance," he said. license. SOCIAL_MEDIA: 8 .split(',') Offshore companies are used by Greek homeowners to evade taxes, businesses to hide their profits and by politicians for unlawful enrichment, George Kanellopoulos, the Greek governments former top financial crimes investigator, told ICIJ. script.setAttribute("async", true); Municipal workers and school teachers have taken to the streets of Athens since Monday to protest against the layoffs. Various studies, including one by the Federation of Greek Industries last year, have estimated that the government may be losing as much as $30 billion a year to tax evasion a figure that would have gone a long way to solving its debt problems. First of all, any individual that has income in Greece is obliged to make an annual Tax Statement, which is done around April-May each year. var s = document.createElement("script"), el = document.getElementsByTagName("script")[0]; return Object.values(OneTrustCategories).filter((c) => blockedCategories.includes(c)).length > 0; When tax authorities recently surveyed the returns of 150 doctors with offices in the trendy Athens neighborhood of Kolonaki, where Prada and Chanel stores can be found, more than half had. Itappears to be even more acute in Greece; according to several studies, tax evasion in our country is substantially higher than in other developed countries. Since the crisis began, this number has increased dramatically: by2013 it had reached 40.5%. "The bundling of payments is not a good sign, it will be difficult from here on," the EU official said. Nearly half of them (49%) featured declaredincomes below 12,000. We gathered estimatesthat have been publishedon all different typesof tax fraud, and we arrived at a range that may appear arbitrary to a certainextent,but which does present the closest estimate one can get from data that is available. A spokesman for Greece's ruling Syriza party raised the possibility that Athens could defer the IMF debt. Best Debt Consolidation Loans for Bad Credit, Personal Loans for 580 Credit Score or Lower, Personal Loans for 670 Credit Score or Lower. "While both sides remain in disagreement over some key issues, progress does seem to be being made," he said in a note, but added that as there was still some way to go he "refused" to get too optimistic. He said there were only a few thousand citizens in this country of 11 million who last year declared an income of more than $132,000. The same European Commission Study estimates that for countries with a sizeable"shadow economy", the Laffer curve is shifteddownward. Speaking of the doctors in the Kolonaki neighborhood who claimed small incomes, he said, they may have just opened their practices or bought real estate there with help from their parents. Anyone can read what you share. For example, if you earn 35.000 euros, your tax will be 1800 euros for the first 12.000, plus 35% of the remaining 23.000 euros, which totals an amount of 9.850. But the lack of visible action is one of the reasons many Greeks cite for their disdain for the tax collection efforts. The reach of the Greek offshore economy extends also to the public sector, particularly to military contractors. In a recentdiaNEOsis opinion poll, respondents seemed to agree: 85,5% stated that they consider tax evasion to be equivalent to theft. Greece Plans Swimming Pool, Luxury Car Tax . On Thursday Tsipras announced that he would not be in Brussels on Friday, as previously planned, to continue negotiations, an EU official said. Tax evasion is one of the most important problems facing any democratic state. 'cag[configuration_franchise]' : 'Europe News' , For Mr. Geniatakis, the arrival of the tax inspectors was the kind of showy government move that hurts the little guy but amounts to nothing. Using satellite photos, the tax authority examined the claim of the residents of Athens's wealthy suburbs and discovered that, rather than the 324 swimming pools claimed by the locals, there were 16,974 of them. Losses from alcohol, tobaccoand fuel smuggling amountto about 0.5% of GDP. STORAGE: 6, Soon, customers annoyed by the holiday disruption confronted them. Signs of wealth abound in Athens, but only a few thousand Greeks out of 11 million declared an income of more than $132,000 last year, according to the Finance Ministry. Other measures in the bill include a luxury tax that will be levied on houses with swimming pools and owners of high performance cars, expected to bring in about 100 million euros annually. Tax on luxurious living (Law 4111/2013) According to the article 44 of the Law 4111/2013, a tax on luxurious living is levied on the owners or possessors of swimming pools (internal or external) which is to be equal to the product of the annual legal expenditure multiplied by a rate 13%. Get our stories by email. var script = document.createElement("script"); As a subscriber, you have 10 gift articles to give each month. Vakakis did not answer detailed questions sent to him by ICIJ, but he said in an email: I have declared officially all without exception my transactions that should be announced in public, as provided by relevant Greek legislation.. may be losing as much as $30 billion a year to tax evasion . } "There are many people with a house, with a cottage in the country, with two cars and maybe a small boat who claim they are earning 12,000 euros a year," Mr. Plaskovitis said, which is about $15,900. Greeks are taxed on their worldwide income, so in theory they should pay taxes on income generated by offshore companies. For instance, newsstand owners could simply claim that they earned an income of 12,000 euros (about $15,900) and no questions were asked. var setAdblockerCookie = function(adblocker) { The countrys revenues have been more or less steadily decreasing since 2010, with the largest decrease occuring in indirect tax revenues. "It's not just lavish marketing and READ THE REST, After Vince McMahon's litany of sexual misconduct and misuse of company funds allegations became public last year, WWE's board of directors insisted that the once and future chairman shouldresign from READ THE REST, We thank our sponsor for making this content possible; it is not written by the editorial staff nor does it necessarily reflect its views. Boing Boing uses cookies and analytics trackers, and is supported by advertising, merchandise If rich countries can withstand tax evasion from offshore companies, Greece cannot, he said. They zeroed in on doctors who reported low incomes but who somehow paid high rents in affluent neighborhoods. Over the past decade, Greece actually lost ground in collecting taxes, even as the economy was booming.

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