Filenews 28 October 2024
Turnover that goes abroad and to countries with preferential tax status, as well as fictitious expenses created by ghost companies to reduce the profits of the real business, can now be automatically detected by the Greek Tax Office with a new algorithm.
A new "robot" of the Tax Office in Greece can detect in real time suspicious triangular transactions, follow the route of "black money" and reveal the whole circuit of tax evasion!
A special team of auditors of the Independent Authority for Public Revenue (AADE), which has at its disposal this Artificial Intelligence (AI) algorithm, can identify "straw men" and shell companies. Based on this system, the "robot" of the Tax Office in Greece, follows the route of issuing expired invoices, checks payments and deposits, cross-checks data on the physical existence of the business and thus can determine if a company is indeed based in a low-tax country and if the expenses it uses to reduce taxation are real.
Triangular transactions are currently being targeted by companies that appear to be established in Cyprus and Bulgaria, while their real headquarters are in Greece.
AADE has already found the end of the thread, which starts with tax consultants and law firms. The "initiators" have created fake companies in these countries and are luring Greek businessmen to exploit the loophole by presenting them as so-called partners.
Practically, a Greek company seems to have moved its headquarters abroad, but in reality they are seal companies that have only a VAT number. For example, they set up shell companies in one of the 42 countries designated as "tax havens" to present false expenses in Greece (and reduce taxes), while at the same time transferring their revenues to these fake companies to be taxed under the favorable regime.
These destinations are the "simple and easy" way for a Greek businessman or freelancer to pay less taxes and avoid the tax pressure on his income. Obviously, there is healthy and legal activity, but there are also cases where tricks and circuits are set up that deprive the Greek State of significant revenues.
Through triangular transactions, money from companies and individuals is transferred to bank accounts in neighbouring countries and controls are bypassed. Thus, fraudsters can buy luxury cars and investment properties with low taxes.
The trick was well known, but until recently AADE officials had to spend countless hours per case to detect and verify tax evasion. Now, with the new "robot" and the parameters that have been set, everything is done in real time and daily... They ring alarm bells on computers, illuminating cases that might otherwise only be found by chance by the controllers.
A recent example is a businessman from Crete in the field of logistics who had set up this particular trick with accountants and software companies for the commercial management of businesses. The case "hit" the AADE computers revealing the activity of the network of 60 companies, which took advantage of the favorable tax and insurance regime of Cyprus in order to avoid paying taxes and contributions in Greece. With this low cost they also had a competitive advantage in the international road transport market. Thus, the "robot" led the AADE auditors to reveal taxable matter exceeding EUR 20 million. euro.
The leader was a co-owner of an international road transport company based in Crete, who also appeared as the owner and sole shareholder of a company in Cyprus. The Cypriot company was fictitious and was set up exclusively to issue invoices to the Cretan and other companies (mainly Cretan) for services actually provided by the company in Crete. With this trick the fictitious Cypriot company displayed revenues that were taxed based on the favorable tax regime of Cyprus, when in reality the revenues belonged to the Cretan company and were hidden from the AADE. In addition, the same registered office in Cyprus was found to have 60 more companies in the field of international road transport, with the same accountant.
The AADE continues to investigate and among the "suspicious" countries are Albania, Cyprus, Bulgaria, Ireland, Hungary, North Macedonia and Moldova. The auditors will target all spending invoices coming from these countries, as well as all documents for the movement of products and money. On the other hand, Greek businesses will have to prove that all transactions are legal and the foreign company essentially has business activity in the country hosting its headquarters.
According to competent AADE officials, practices for fictitious transfer of costs of the parent or central to the subsidiary or branch through various tricks are not recognized by the Greek authorities and are characterized as fictitious in the audit. Such practices are illegal whether the entrepreneurs who use them know it or not. Even if a company has transferred its registered office to another country, the Greek state can consider it a tax resident of Greece and require the payment of tax on its worldwide income. The criterion is whether the effective management of the company is exercised in Greece.
newmoney.gr
