Greece’s Tax Authorities Investigate Cash Property Transactions for Potential Tax Evasion and Money Laundering

Greece’s Tax Authorities Investigate Cash Property Transactions for Potential Tax Evasion and Money Laundering

Cracking Down on High-risk Cash Transactions

The Greek Independent Authority for Public Revenue (AADE) has embarked on a probe into cash transactions involving real estate purchases. The investigation, which kicked off in March 2021 and continued until August end, brought to light tens of thousands of cash transactions related to the acquisition of homes, land plots, and commercial properties. The cash transactions under scrutiny are worth a staggering €462 million. The AADE is deploying in-depth cross-checks on property transfer files that employees of the tax administration have tagged as “high-risk”. The aim is not merely to unearth tax evasion but also to identify potential money laundering activities.

From Notaries to Mortgage Registrars: A Thorough Check

The AADE’s investigation is comprehensive, extending its checks to both the buyers and sellers involved in the transactions. Even though the purchases were made entirely in cash, the probe will also examine bank accounts, credit card expenses, and travel expenses. The AADE has initiated checks on notaries and mortgage registrars for approximately 2,500 old property transfer cases. The process will commence with the inspection of high-value property sales and conclude with the examination of those with lower value. Tax returns and bank accounts will be reviewed to determine if large sums of money were withdrawn that could justify the cash property transactions.

AADE Targets Inheritances and Donations

In addition to the old property transfer cases, the AADE has already begun checks on inheritances, parental provisions, and donations, as well as on notaries and mortgage registrars. The focus of these checks are cases from the year 2017, for which the deadline for the tax administration to issue a corrective tax determination act expires on December 31, 2023.

The Consequences of Unverifiable Sources of Funds

Any discrepancy or unverifiable source of funds will lead to the individuals being required to pay a tax with a 33% rate applied to the unjustifiable amount. According to the law, an increase in wealth is not subject to taxation, as long as the taxpayer can prove the real source of it, and that it has either been subjected to lawful taxation or is exempt from tax. In all other cases, any increase in wealth from an illegal, unverifiable, or unknown source is considered income from business activities and is taxed at a rate of 33%.

Conclusion

In essence, the Greek tax authorities are conducting thorough investigations into cash property transactions to prevent potential tax evasion and money laundering. Through in-depth cross-checks and audits, they aim to ensure that all transactions are legal and that their sources can be verified. The move signals Greece’s commitment to financial transparency and legality, setting a precedent for other nations to follow suit in the battle against tax evasion and money laundering.