CONTENT_SELECTION_AND_MEASUREMENT: 7, The Finance Ministry issued a brief statement denying the story. } . el.parentNode.insertBefore(s, el); 'site' : 'cnbc-mobile' , A Division of NBCUniversal. The extensive use of plastic' money and the extension of electronic transactions have been tested in many countries (from South Korea and Argentina to the Netherlands and Sweden). 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. . script.setAttribute("onload", "setAdblockerCookie(false);"); The document also gives primary surplus targets from 2015 to 2022 and details how Greece will raise its average retirement age. just 324 residents checked the box on their tax returns admitting that they owned pools. This appears to bechanging, however. 'pubdate' : '1373441012' , return false; At a recent conference on Transparency and Offshores held at the Greek Parliament, the deputy minister of finance, George Mavraganis, said the government is planning to close some of the loopholes that allow Greek offshore owners to avoid paying taxes. 'cag[device]' : 'mobile-touch' , Greeks Hide Swimming Pools, Income in Rampant Tax Dodges Bloomberg Originals 3.4M subscribers Join Subscribe 7.9K views 10 years ago May 5 (Bloomberg) -- Bloomberg's Nicole Itano reports on. and the income tax will be recalculated, as swimming pools are among the assets whose . He said his own sister had recently told him that she was uncomfortable asking her doctor for a receipt. Legal entities evade taxes in a series of ways. 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. 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. If they go to the mechanic, it is one price without a receipt and quite a bit more with it, Mr. Bakouris said. Curbingthis phenomenon is a major challenge and requires cooperation and coordination amongmany nationsand cross-border organizations. However, European news organizations such as the U.K.'s Guardian newspaper reported the proposals as fact. These parameters apply everywhere. But she contends that the politicians never wanted toughness. var CNBC_Premium = CNBC_Premium || {}; Efforts to overhaul the tax system, many accountants say, have created such a confusing jumble of laws that it will take months, if not years, to understand them. Anna Apostolou, an accountant who works mostly for small-business owners, said many of her clients just refuse to pay or turn to the courts, knowing that will tie up payment for years. Greeks shadow economy represents 20 to 30 percent of its G.D.P. One visitor to the yacht was John Paul Papanicolaou, a well-known ship owner and friend of Onassis. Starting January 1st, 2022, there are new "objective values" for real estate that affect taxes when buying and owning properties in Greece. 2023 The International Consortium of Investigative Journalists. On February 21, 2007, a Cyprus law firm created an offshore company in the BVI called Karpathia Ltd. Real estate property taxes in Greece: Tax on Capital Gains Capital gains are not taxed individually but are contributed to the company's taxable income. Next year, Greek officials will also have to give up on one tax collection system that has worked well so far: attaching property tax bills to electric bills. All Rights Reserved. This is asummary of the basic results. In the past, the tax code gave many categories of workers special status. You must complete an income tax return in Greece if your annual income is over 3,000. But Lahart assumes that tax evasion could be reduced to zero and all tax revenues recovered. But in recent months, the union has begun to fight back, speaking out on a number of issues and starting a poster campaign telling citizens that the collectors are not at fault. )+[a-zA-Z]{2,}))/; We want to hear from you. The authors look at a dataset from a large Greek bank, which contains information on individual borrowers' credit . cStart = cStart + name.length + 1; const blockedCategories = decodeURIComponent(matches[1]) Such a move, the newspaper said, would effectively end further investigations because the tax offices lacked the skills to quickly handle them. Being flexible over reforms could be critical for Greece as it looks to avoid defaulting on its immediate and forthcoming debts to the IMF and ECB. According to the relevant academicliterature, there are three parameters that determine the level of tax evasion in an economy: Whether or not a citizen or a business will evade taxes is a decision that is essentially affected by these three factors. 'adunits' : 'Default' , Read MoreEuropean stocks close lower, Greece in spotlight. Yet signs of wealth abound. Five days later, Papanicolaou and Fitzpatrick created a Cook Islands limited partnership called The Christina Limited Partnership. Swimming Pools, Intex Swimming Pools, Coleman Swimming Pools; Additional site navigation . Thirty-four of them claimed less than $13,300, a figure that exempted them from paying any taxes at all. "Mr Tsipras is completely aware of his chance and will have to take his responsibilities and propose some measures to meet his commitments," Macron added. Consolidating and reorganizing the tax bureaus, intended to save money in the long run, has created an administrative nightmare in the short run, with files arriving months after a move, if at all, union officials say. It is mostly developing or third world countries thatrely more on indirect taxes. var foresee_enabled = 1 Papaconstantinou has denied wrongdoing. 'cag[configuration_franchise]' : 'Europe News' , return '' 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 claimed an income of less than $40,000. Just four out of 107 offshore companies investigated by ICIJ are registered with tax authorities as the law usually requires, particularly when the firms hold assets or conduct business in Greece. if (cEnd === -1) { Kosmas Haralambidis, a manager at one Athens pool manufacturing firm said a new swimming pool could cost as little as 15,000-18,000. As a property owner in Greece, an individual should be aware of and consider the various taxes for properties in Greece. All rights reserved. 'hline' : 'Europe News' , 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%. VAT evasion at 5.35 bln euros Greece's 25.8% rate of lost revenues constitutes the second highest in the European Union . 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. If they are fined they will not pay.. At the end of 2011, tax arrears totaled 45 billion euros, or about $62.1 billion. bring in around 24 billion. (function(){ According to studies, 8% of global taxpayer wealth is hiddenin tax havens. console.log('PUB-GDPR-CHECK oneTrustCookie matches: ', matches); On April 7, 2000, Papanicolaou and Irish lawyer Ivor Fitzpatrick created a Cook Islands company called Christina GP Limited. Read about what we do with the data we gather in our Privacy Policy. 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. For example, electronic submission of corporate tax returns became possible only in 2013, while a series of processes continue to require the physical presence of taxpayers at tax administration offices. Hopes of an agreement between Greece and the bodies overseeing its aidthe European Commission, European Central Bank (ECB) and International Monetary Fund (IMF)were raised on Wednesday after the lenders appeared to be ready to compromise, offering Greece room for maneuver on certain aspects of its bailout program. Tax morale has fallen because there is little or no trust in the state. Boing Boing is published under a Creative Commons And what can be done to solve the problem? Many Greeks say tax collectors have a reputation for being among the easiest officials to bribe. 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. We need to learn not to cheat or to let others cheat.. The document proposes hiking taxes on luxury items such as planes, helicopters, gliders and swimming polls to 13 percent from 10 percent. Yet only 324 households in those areas had ticked the box on their income tax forms admitting to pool ownership. Others are linked to a defense contractor working for the government and to top Greek executives who made a fortune on bonds sales. The request is expected to be approved by the IMF, the newspaper said. At the end of July, with the most active tax period to come, the arrears had risen to 60 billion, or almost $83 billion, equivalent to nearly a fifth of the governments public debt. mps._log('**** LOADED: Google PII Fix - cnbc-cms-header-insert'); 'content_id' : '100875192' , Of course, individual countries cannot easily address these practices on their own. According to research by the Ministry of Labour, 27% of those working undeclared had asked theiremployers to allow it. You cannot heat this house or buy the gas for the car with that kind of income.. The partnership ended up paying nearly 66 million ($60 million) for the ship. There is a truth that is more or less valid throughout the world: the self-employed and small businesses avoid paying theirtaxes. Angelos Tzortzinis for The New York Times. var CNBC_MPS_FRANCHISE_TAG='europe_news'; There is a threshold, predicted by the so-called "Laffer curve" (named afterthe economist who drew it on a napkin in orderexplain the phenomenon to Donald Rumsfeld and Dick Cheney, members of the administration of US President Gerald Ford in 1974) above which tax revenues decline. Thisphenomenonhas a relatively smallimpact ontax revenues in most developed countries for one simple reason: The number of very small businesses in those economies is lower, and the self-employed representa smaller percentage of the workforce. The secretary general of state revenues at the Greek Finance Ministry, Charis Theocharis, said that ICIJs findings were of great concern, and that the government will examine the information to see if evidence regarding illegal activities or irregularities arises.. console.log('PUB-GDPR-CHECK'); } In the meantime, Harris made news in Ireland in 2008 for winning a court judgment of 9 million in income tax refunds, a decision that upheld his deduction for his expenses in buying and remodeling of the Christina O through the Cook Islands limited partnership. An article in Eleftherotypia recently reported that the Lagarde list investigations and other high-profile cases were about to be moved from an elite auditing unit to local tax offices. 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. We are a participant in the Amazon Services LLC Associates Program, an affiliate advertising //end OneTrust Redirect © 2023 Dianeosis. Service, a Creative Commons for (var i in mps.response.dart.adunits) { 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. Haris Theoharis, Greeces secretary general for public revenues, agreed with some of the unions arguments, including that there are too few auditors. The Greek documents ICIJ analyzed are part of a trove of 2.5 million secret offshore files . For example: The Greek state's annual revenue hoversaround 50 billion. Pushing, shoving and angry words followed, and eventually the frightened inspectors were forced to flee. An additional 3.5% of GDP is estimated to be lost due to Value-Added Tax (VAT) fraud. 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. 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. Campaigns to create fiscal consciousness have been successful in India, Israel and Mexico. The corporate income tax has increased, in the form of anadvance tax burden. The cheating is often quite bold. 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. 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. . 'cag[attribution_source]' : 'Reuters' , In our study on extreme poverty in Greece, we described a package of measures that could help 1 million Greeksrise above the poverty line. Any direct or indirect contractual relationship between defense ministries and offshore companies, in any form, should be condemned, even if only for transparency reasons, in a sector replete with corruption allegations, Vasilakos said. But it remained unclear how aggressive the investigation was. According to a European Commission study, this limit for countries within the EU is at 54% forindividual income tax and at 72% for income tax on legal entities. const OneTrustCategories = { Nearly half of them (49%) featured declaredincomes below 12,000. That kind of wholesale lying about assets, and other eye-popping cases that are surfacing in the news media here, points to the staggering breadth of tax dodging that has long been a way of life here. Two of the offshore companies in the ICIJ data were used to buy and refurbish one of the worlds most storied yachts the Christina O, where the Onassis family once entertained John F. Kennedy, Marilyn Monroe and Winston Churchill, among other celebrities and statesmen. Last year, a Greek journalist caused a political storm when he published the names of about 2,000 Greeks with bank accounts in Geneva the Lagarde list, named for IMF head Christine Lagarde, who handed out lists of tax dodgers to authorities of several European countries when she was Frances finance minister. This is important. Legal uncertaintyfor taxpayers and employees of the tax administration, The lack of political will to address theproblem, Structural distortions of the Greek economy. Washington, D.C. 20036 USA. Since the crisis began, this number has increased dramatically: by2013 it had reached 40.5%. There was a third and even more secretive company, Belchamps Management Limited, which for several years used bearer shares meaning that the owners of the shares were not officially registered anywhere. 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. 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. In any case, though, the wise thing to do is hire a professional to handle your cases. typeof mps._gptfirst == "function" && mps._gptfirst(adunit, slotid); In the end, Mr. Alexiadis said, the small guy gets hit hard simply because he is an easier target. 'id' : '100875192' , To be sure, there have been some high-profile arrests in the last year. It's generally agreed that 3 to 4 per cent of Greece's GDP is lost to tax evasion, says Yannis Stournaras, director-general of the independent Foundation for Economic & Industrial Research in. 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.. Global Business and Financial News, Stock Quotes, and Market Data and Analysis. The great majority of revenue from income taxes came from them. 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. 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. For countries likeGreece, the thresholdof individual income tax is at 39% - very close to the current rate. mps.response.dart.adunits[i].data = ''; Independentie Skip to navigation [n] function isOneTrustAnyBlocked() { The buyers of the bonds remained anonymous and are part of the mystery surrounding the transaction. Tax Rate. How Greece ended up with this state of affairs is a matter of debate here. Among the measures included in the bill are job cuts for school guards, municipal police and other local government posts. "I guess we should be taking all comments with a pinch of salt at the moment and just recognize that this is an improvement on the rhetoric coming from both camps prior to a couple of weeks ago. 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 scale for 2018: Income bracket. Previous political leaders were hesitant to effectively tackle the problem, perpetuating the culture of lawlessness and the justifiable lack of . ","mainEntityOfPage": "https://www.cnbc.com/id/100875192","headline": "Greece Plans Swimming Pool, Luxury Car Tax ","dateCreated": "2013-07-10T03:23:32-0400","datePublished": "2013-07-10T03:23:32-0400","dateModified": "2013-07-10T03:23:32-0400","author": {"@type": "Person","name": "Reuters"},"publisher": {"@type": "Organization","name": "CNBC","logo": {"@type": "ImageObject","url": "https://sc.cnbcfm.com/applications/cnbc.com/staticcontent/img/cnbc-logo-amp.png","width": 360,"height": 60}},"image":{"@type": "ImageObject","url": "https://fm.cnbc.com/applications/cnbc.com/resources/img/editorial/2013/07/10/100875202-139058324.720x405.jpg","width": 720,"height": 405},"thumbnailUrl": "https://fm.cnbc.com/applications/cnbc.com/resources/img/editorial/2013/07/10/100875202-139058324.720x405.jpg","articleSection": "Markets","url": "https://www.cnbc.com/id/100875192","keywords": ["Articles","Markets","Economy","World Economy","Europe News","source:tagname:Reuters"]} The Greek documents ICIJ analyzed are part of a trove of 2.5 million secret offshore files obtained by the global reporters network. As part of efforts to plug fiscal gaps, including a shortfall of more than 1 billion euros at state-run health insurer EOPYY, the bill sets annual spending limits on outlays to diagnostic clinics and healthcare facilities. All OECD countries levy a tax on corporate profits, but the rates and bases vary widely from country to country. 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. In these hard times, he and the other restaurant owners had pooled 1,000 each, about $1,380, for music and decorations, only to see their investment disappear with the crowds when the scuffle began. Personal Income Tax Rates in Greece. What were the tax inspectors doing here? } else { }); if (typeof(window._mpspixZ) != 'string') { That's when Stiizy, READ THE REST, Christopher Mims poses that the reason that Apple remains top of the pile in the U.S. phone business is the used-carification of the market. For comparison, the United States was put at 7.8 percent. On Thursday Tsipras announced that he would not be in Brussels on Friday, as previously planned, to continue negotiations, an EU official said. } "We expect it to pass as we have the required majority.". const ONE_TRUST_COOKIE_NAME = 'OptanonConsent'; Finding Swimming Pools with Google Earth Greek Government Hauls in Billions in Back Taxes In a bid to increase revenues, the Greek authorities are employing all kinds of clever tricks to. If tax rates are low, the motive for tax evasion is smaller. A Division of NBCUniversal. During the crisis, the income tax on individuals has increased and the tax-free limit has been reduced. head = document.head || document.getElementsByTagName("head")[0], mpsload = document.createElement("script"); Within the last 30 months alone, 10 tax laws with 117 articles and 17 other laws with 71 tax provisions were voted in. Passage of the bill will help Athens show its creditors it is serious about cutting thousands of public sector jobs by the end of the year and modernizing the tax code. homes for rent in errol estates apopka, fl, fred dryer current wife, what to put in candy dish besides candy,