Thought Leaders in Taxation


Years of economic austerity have seen an expansion of the shadow economy in Greece, where taxes often go unpaid and regulations aren’t strictly adhered to. The results are obvious: As long as the shadow economy flourishes, the real economy suffers. Business Partners’ Thought Leaders in Taxation offer specific proposals on tax policy, exploring ways to promote good tax governance, highlighting key policies and tax issues and examining the challenges a new tax model would present.

Mind the (VAT) Gap: Is There Room for Improvement?


The VAT gap stands for the difference between the VAT expected to be collected on the basis of a country’s economy and rules and the amount actually collected. Although the VAT gap may be affected by factors such as bankruptcies and tax arrears, it is mainly attributed to the shadow economy. According to Eurostat’s latest available data, Greece’s VAT gap in 2015 reached a 28% rate (3% increase from 2014), the third highest rate in the EU (behind Romania and Slovakia).

Several measures have been adopted in the EU and in Greece to tackle VAT evasion (e.g. extension of the reverse charge mechanism, use of electronic means of payments, lotteries). Still, further measures may be implemented. More or less, these are widely discussed; however, absence of commitment and weak infrastructure delay their implementation. These include:

  • Split payment mechanism, allowing for a separate payment of the net value from the VAT (the latter, for example, in a blocked VAT bank account)—care should be taken for such mechanism not to increase related administrative burden for businesses
  • Link of cash registers with the tax administration’s systems, which will allow real time monitoring of retail transactions
  • Electronic invoicing/transmission of data to the tax administration in order to efficiently detect fraudulent fiscal documents
  • Additional tax credits to individuals making use of electronic means of payment, as well as businesses achieving a targeted volume of retail sales through such means
  • Harsher penalties for accepting cash payments for transactions of a value exceeding EUR 500 (currently set at EUR 100) and for not issuing fiscal documents (currently 50% of the VAT not paid; a de minimis penalty applies).

After all, to mind the VAT gap means to increase tax revenues for the State, while combating the shadow economy. A win-win situation for all parties concerned: the State and the taxpayers.

Zepos & Yannopoulos

Established in 1893, Zepos & Yannopoulos is one of the most prominent law firms in Greece, providing comprehensive legal and tax services with a particular focus on foreign entities doing business in Greece. With a total staff of approximately 130, we focus on the provision of sophisticated, proactive and personalized services to legal entities and high net worth individuals. Our goal is to provide top-quality comprehensive legal and tax advice, while assisting our clients to capture the intricacies of the Greek business environment.

Zepos & Yannopoulos is the exclusive Greek member of Lex Mundi and Taxand and is also a member of numerous other non-exclusive prestigious international networks.

The firm is fully committed to professional integrity and practices that promote business ethics. Zepos & Yannopoulos is the corresponding firm in Greece of TRACE, a non-profit association providing anti-bribery support.

280 Kifissias Ave., 152 32 Halandri, Athens, Greece | T: +30 210 696 7000 (switchboard) | F: +30 210 699 4640 | E: | W:

Shadow Economy: It’s Society’s Turn


The shadow economy cannot be tackled with legislative measures and policies alone. Despite recent major tax reform and new policies, the shadow economy, which is fueled by unpaid taxes, remains very vivid. Why is this so?

One reason, amongst others, is that our society has not yet come into good terms with the idea of complying with tax obligations, as an ethical duty. Paying taxes is not seen as a contribution to ourselves but rather as a waste of resources.  On the contrary, non-payment of taxes is considered a reasonable reaction, backed either by a blame-game approach -such as claiming improper utilization of public revenues or excessively high tax rates- or by the illusive perception that anyone who alleges lack of means to pay his taxes is automatically entitled to not paying them.

While such excuses contain certainly elements of truth, they cannot serve as the general alibi of a society for not performing its duties. Unorthodox burdens, such as extra contributions, excessive real estate or social security charges, must definitely be rationalized, and the collection system must be in a position to distinguish between taxpayers who really lack the assets to support their obligations and those who simply pretend so.

But apart from this, if there is one more policy that must be undertaken, this is to overturn the perception that avoiding contribution to public revenue is more rewarding than the opposite. The state should design and implement a campaign to raise awareness about the harmful and distortive impact that unethical nonpayment of taxes has on the society as a whole and on each one of us individually. The same approach has to be followed by all opinion makers (media, expert bodies, etc.) so that, together with the expression of sympathy for those genuinely unable to perform their duties, to demoralize non-compliance with tax obligations by declaring it an enemy of the society.

Stavropoulos & Partners Law Office

Stavropoulos & Partners law firm is a partnership of lawyers established in Athens which offers a wide range of legal services, with particular emphasis in international and domestic tax law, commercial/corporate law, European Union law, mergers and acquisitions, corporate restructuring, antitrust and dispute resolution. Its founding partners have been working together since 1991.

The firm collaborates with corresponding offices in other Greek cities as well as with other professionals such as auditors, accountants, stock brokers, real estate agents, public notaries and judicial bailiffs. The client base consists mainly of multinational companies deriving from Europe and North America and having activities in Greece and the wider Balkan region.

The lawyers of the firm have done contemporary undergraduate and postgraduate studies and are assisted by secretarial and clerical staff supported by modern infrastructure.

The main target is to successfully meet the increasing demands of the clientele while maintaining a high degree of dynamism, flexibility and close personal contact with each case.

58 Kifissias Ave., 151 25 Maroussi, Athens, Greece | T: +30 210 363 4262 | F: +30 210 363 3204 | E: | W:

How to Combat the Shadow Economy Through a New Social Contract


I have often heard Americans say that we Greeks have a strong sense of family but little sense of community. Taxation is probably the most unpleasant consequence of being part of a community.

The crisis in Greece has been a sovereign debt one. Purely technocratic measures to unveil the shadow economy have not brought the anticipated revenues, because tax evasion is not the problem; it is a result of the chronic social decay, which led to the crisis when the circumstances permitted.

To succeed, Greece needs to re-establish trust between the tax administration and taxpayers, thus also achieving the fiscal stability that the country desperately needs in order to attract investments.

Certain measures adopted are in the right direction, including the conversion of the tax administration into the Independent Authority of Public Revenues and the establishment of a pre-court dispute resolution forum, the Dispute Resolution Directorate. However, it is doubtful that the impact of these measures has been noticed by the average taxpayer, considering that the economy is unprecedentedly scattered in employees, pensioners, independent professionals and individual businesses.

To this end, on the government’s side, Greece must improve transparency and accountability by securing easy access for taxpayers to information concerning budgets and expenditure.

On the administration’s side, taxpayers shall no longer be treated as tax evaders until proven so. The percentage payable in case the assessment is disputed shall be reduced from the currently applicable 50% and criminal proceedings for tax evasion shall begin after the dispute is resolved.

On the taxpayers’ side, Greece shall invest in education and encourage engagement. Fiscal decentralization, e.g. by assigning the revenues from property taxes to municipalities, would reduce the community tolerance of the shadow economy.

In conclusion, Greece needs long term policies that will have a positive impact not only on fiscal compliance but also on social cohesion, resulting in broader benefits and improving the country’s future prospects.

Dryllerakis & Associates Law Firm

Dryllerakis & Associates is a top tier business Law Firm whose mission, for more than 40 years, has been to offer clients the optimum and most comprehensive legal advice in all fields of business law and to provide the best and most effective litigation strategy.

Organized, dedicated teams cover the core areas of Corporate Law and M&As, Privatizations, Real Estate, Private and Public Law Contracts, Labor Law, Tax Law and Competition Law, while a strong litigation team has a long-standing experience before all Greek courts of all kinds (including the Supreme Courts) as well as an extensive involvement in local and international arbitrations.

The Law Firm advises major US and other international companies. The Managing Senior Partner, John Dryllerakis, often identified as a statesman, acted for many years as the General Counsel and General Tax Counsel of the Exxon affiliates in Greece and subsequently of Shell Hellas.

5 Chatzigianni Mexi St., 115 28 Athens, Greece | T: +30 211 0003456 | F: +30 211 0005200 | E: | W:

Tax Policies Against the Shadow Economy


The shadow economy is associated with many irregularities, ranging from illegal activities to tax evasion. The size of the Greek shadow economy represents at least 20% of the Greek GDP—one of the highest percentages among the EU and OECD member states. Its tax evasion component affects mainly three areas: income taxation, VAT, and excise duties. Furthermore, undeclared economic activities are attributable to SMEs and self-employed individuals. Large enterprises are usually not guilty of this phenomenon. By contrast, they can play a crucial role in the fight against tax evasion.

The countering of the shadow economy should address the aforementioned issues. Initially, the number of taxpayers who are burdened by heavy administrative and procedural requirements should be reduced. This could be effected by setting higher thresholds for the application of simple tax arrangements (e.g. in the field of VAT or bookkeeping obligations) and extending the application of withholding tax regimes. Then, some administrative tasks should be shifted from the tax authorities to trustworthy enterprises. Such a shift would allow a more effective control of the economic chain, while creating a collaborative environment between tax administrations and various large enterprises. Finally, tax authorities should focus on those sectors that have a disproportionately important contribution to the shadow economy—such as energy and tobacco products and certain types of services—by applying industry-specific measures.

The common denominator is that tax compliance should be made more convenient for consumers and individuals, while tax authorities should collaborate on a more even level with large enterprises for the common cause of fighting tax evasion. This model would set forth an example that is followed in other areas, such as automatic exchange of information, transfer pricing, and taxation of capital income. The effective implementation of those measures could result in a more equitable and efficient collection of public revenues.

Kyriakides Georgopoulos Law Firm

Kyriakides Georgopoulos is a long-established business law firm that meets and exceeds the needs of international clients, including locally established clients.

Our structured approach to both the relationship with our clients and to our internal processes provides a measurable benefit: We strive to ensure that our clients remain engaged and up-to-date throughout the duration of our relationship, and we request their feedback in order to ensure that needs are met at any given moment.

Our lawyers are experts in specific practice areas. This enables us to understand our clients’ objectives better and to deliver legal solutions to achieve them even in the largest and most complex transactions.

We know that our clients expect more than legal information or hedged advice, and we guide them to define the business challenges and work out a strategy for success.

Clients come to us for our successful track record, knowing that they can rely on our creative thinking to solve their most complex challenges.

KG pioneered in the Greek market by becoming ISO certified since 2006 and still remains one of a handful of ISO 9001 certified law firms in Greece.

28 Dim. Soutsou St., 115 21 Athens, Greece | T: +30 210 817 1500 | W:

Tobacco Excise Tax and the Shadow Economy


Excise taxation, on tobacco in particular, has traditionally been an attractive fiscal policy for governments around the globe. This is primarily due to the relatively low administrative costs of implementation in combination with the high potentiality in terms of revenue collection. Excise tax on tobacco also bears minimum political cost, as its imposition is further justified—and correctly so—by public health concerns.

It is common knowledge, however, that the excessive imposition of such fiscal measures can end up boosting the shadow economy and illegal trade. This has been very vividly experienced in Greece in the last eight years, where irrationally high rates of excise taxation have completely ignored affordability for the consumer, thus affecting the tax-generating ability of an entire sector and also creating several important side effects that affect society as a whole. These include unemployment, a rise in criminal practices, financing terrorism, and undermining public health policy objectives.

As contradictory as it may sound, tobacco excise burden reduction far from qualifies as the appropriate solution, despite the fact that Greece has the highest tobacco excise tax among EU member states. Adopting such a policy would only reduce tobacco state revenues further, because the legal market is under severe pressure by the unfair competition practices utilized by groups practicing tobacco product smuggling.

The only realistic long-term fiscal policy option is the protection of legal consumption by enhancing enforcement measures against illicit trade, aiming to minimize illegal supply and establishing a stable and predictable tobacco excise regime to minimize demand for illicit products.

This would allow the legitimate tobacco supply chain to find a new equilibrium, simultaneously safeguarding the approximately €3 billion in annual tax revenue from the sale of tobacco products and the approximately 60,000 jobs in the country’s legal tobacco industry and supply chain. Equally importantly, reducing the incidence of tobacco product smuggling will allow the country to climb up the global anti-corruption indexes, one of the main criteria considered by the global investment community.


For more than eight decades, Papastratos (an affiliate of Philip Morris International) has a leading position in the tobacco industry in Greece. In 2017, a new page was written in the company’s history, after the strategic decision to invest 300 million euros in converting its plant in Aspropirgos to produce exclusively heated tobacco sticks for the new, reduced risk product, IQOS. Papastratos’ plant will be the third facility in the Philip Morris International network to produce heated tobacco sticks distributed in the local market and exported all over the world. This investment has created 400 new employment positions, increasing Papastratos’ headcount to 1,200 people. Traditionally, Papastratos and PMI absorb the largest quantity of Greek oriental tobacco production. During the past years, Papastratos has implemented an extensive Social Responsibility program. Papastratos has been awarded several times as a Best Workplace and Top Employer for its dynamic work environment and was also distinguished by Fortune magazine as the “No 1 Most Admired Company in Greece” and the “No 1 Most Admired Industry in Greece.”

Imeros Topos, Thesi Kororemi, Aspropirgos, Greece | T: +30 210 419 3000 | W:

The Greek Tax System—Still in Need of Stability


There is no doubt that simplicity and consistency should be the underlying parameters of any tax system.

Only in the last decade, dozens of tax laws have been enacted, income tax rates for legal entities in Greece have changed five times and there have been numerous increases in VAT, excise duties, etc. Moreover, the complexity of the tax provisions creates a need for additional and constant interpretation, resulting in hundreds of tax circulars issued at the same time, concerning all kinds of taxation. The end result is a high degree of ambiguity and considerable difficulty in monitoring and implementing tax provisions. This in turn affects not only compliance but also tax, and hence the business planning of companies, both those already operating in Greece and those exploring opportunities to do so.

A recent example is the case of the statute of limitation. After a long dispute period, the Supreme Administrative Court issued a legislative decision, which was followed by four specific circulars issued by the administration, while in the meantime, tax assessments falling under the limitation period were issued and fines and penalties were imposed.

In cases of dispute with the tax authorities, commencing administrative procedures is further burdened by the requirement to prepay 50% of the total temporarily assessed taxes, penalties and charges, a policy that (a) takes no account of the quality and tax rating of the company and (b) imposes significant pressure on cash flow. Even if one goes through this process, cases are resolved in the administrative courts, where they are accumulated, with additional costs and delays, prolonging the burden and financial uncertainty.

All of this clearly shows that despite all efforts, there is still need for further stability and simplicity in the Greek tax system, which should not serve merely as a cash collection mechanism, but consider its impact on value creation, competitive practices, compliance with relevant regulations and eventually collection and redistribution.

Hellenic Petroleum Group

Hellenic Petroleum is a dynamic Group with solid foundations, holding a leading position in the Greek energy sector as well as in the greater area of Southeast Europe.

The Group’s range of activities includes:

  • Supply, refining and trading of petroleum products, in Greece and abroad
  • Fuels marketing, in Greece and abroad
  • Petrochemicals/chemicals production and trading
  • Oil & gas exploration and production
  • Power generation and trading
  • Renewable energy sources
  • Provision of consulting and engineering services to hydrocarbon related projects
  • Participation in the transportation of crude oil and products (pipelines, sea transportation)

The Group’s Brief Financial Data for 2017 are: turnover 7,994; adjusted EBITDA 834; adjusted net income 372; capital employed 4,173; and net debt 1,800 (amounts in million Euro).

8A Chimarras St., 151 25 Maroussi, Greece | T: +30 210 630 2000 | F: +30 210 630 2573 | W:

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