A Cautionary Tale

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john4d
Posts: 457
Joined: Fri Dec 21, 2007 5:13 pm
Location: Near Vamos

A Cautionary Tale

Postby john4d » Mon May 22, 2017 9:29 am

I returned to Crete in early April having spent some time back in the UK. Two days after my return I visited my bank to have my book account brought up to date. I use the account to pay my Electricity Bill by direct debit. I handed over my book and the cashier accessed my account on her computer.
“You have a problem with the tax” she said.
I smiled at her and replied “No, I don’t think so”
“Yes you have” she said
I frowned and said “Surely not!”
“Yes you have. The tax man has frozen your Account”
She brought the account up to date and returned the book to me. I looked at it.
“What’s this entry? Half of the balance has been taken!”
“The Taxman has taken it. He only took half because it is a joint account”

I immediately phoned my accountant who claimed to know nothing about it, and promised to visit the tax office to find out what was going on. A few days later I got a garbled explanation from my accountant who assured me that it was all sorted and that my account would be unfrozen by w/e April 28th. It wasn’t and having spoken to my accountant again, and another visit to the tax office I was informed that the papers had not yet been sent to the bank, but they would be shortly. Last week I was told that the papers would be written tomorrow (23rd) and I have an appointment with my Accountant on Wednesday so perhaps I will find out then what has been going on.

I am not tax resident in Greece, so my accountant is my representative here for tax purposes. We submit our annual tax return and every year I get the official document saying I owe no tax. As far as I am aware the tax office have made no demand of me to pay tax, so this seizure of money and freezing my account has come out of the blue.

We live in Greece, so it will not come as a surprise when I tell you that last week I got a call from my bank to tell me that they had paid my Electricity Direct Debit. “thanks” I said “is my account no longer frozen” I was told that it was still frozen but they had paid my DD so that I wouldn’t be cut off. Only in Greece! It’s just a pity that I had anticipated that problem and paid the bill in the office, so now I’ve paid twice.
There's no such thing as a bad taste joke

paul g
Posts: 89
Joined: Sun Jan 18, 2009 9:20 pm
Location: Nr. Kato Gouves

Re: A Cautionary Tale

Postby paul g » Mon May 22, 2017 9:32 pm

Here is another one, I went to my accountant the other week, and when my tax account was accessed on the tax site, I'm told I owe 400€ from 2008 for the objective value of my property. Terrific.

Kilkis
Posts: 8772
Joined: Sat Apr 21, 2007 3:58 pm
Location: Near Chania

Re: A Cautionary Tale

Postby Kilkis » Tue May 23, 2017 12:19 am

I'm not sure what you mean that you owe €400 "for the objective value of your property"? The ENFIA property tax didn't exist back in 2008 but there was a property tax on expensive properties. Are you saying that the objective value of your property is so high that you owe that form of property tax?

Alternatively, Greece uses a system of assumed income. Things you own, such as a property, a car, a swimming pool, a boat etc are used to calculate an assumed income. If you declare an actual income more than the assumed income you are taxed on your declared income. If you declare an actual income that is less than your assumed income then you are taxed on your assumed income. In the case of foreigners who are registered as non-tax resident in Greece, they are not declaring an actual income. In that case they have to prove, using pink slips, that they have brought sufficient money into Greece to at least meet their assumed income. Similarly if they acquire a new asset such as a property, car, boat etc they have to prove that they brought enough money into Greece to cover the cost of that asset. Are you saying that you didn't provide pink slips to cover the cost of your assumed income or the purchase of an asset?

Warwick

PS You wouldn't be cut off for failing to pay one bill, John. You would be cut off shortly after failing to pay a third bill.

paul g
Posts: 89
Joined: Sun Jan 18, 2009 9:20 pm
Location: Nr. Kato Gouves

Re: A Cautionary Tale

Postby paul g » Tue May 23, 2017 10:12 am

my accountant said it was to do with the rise in the objective value in 2008 of my property.

john4d
Posts: 457
Joined: Fri Dec 21, 2007 5:13 pm
Location: Near Vamos

Re: A Cautionary Tale

Postby john4d » Tue May 23, 2017 10:31 am

I haven't seen my accountant yet, but property tax from 2008, was part of the garbled answer I got when we originally spoke on the phone. Like Warwick I didn't understand this as 'property tax' didn't exist in 2008. When it was first introduced it was collected as you recall on the Electricity Bills and I had paid all of those bills. I don't own a very expensive property. If they have dreamt up a new backdated tax it looks like quite a few of us may be caught out.
There's no such thing as a bad taste joke

john4d
Posts: 457
Joined: Fri Dec 21, 2007 5:13 pm
Location: Near Vamos

Re: A Cautionary Tale

Postby john4d » Tue May 23, 2017 10:45 am

Thanks for the re-assurance regarding non payment of Electricity Bills Warwick. I shouldn't get cut off now that I'm in credit :D
There's no such thing as a bad taste joke

Kilkis
Posts: 8772
Joined: Sat Apr 21, 2007 3:58 pm
Location: Near Chania

Re: A Cautionary Tale

Postby Kilkis » Wed May 24, 2017 8:24 am

Actually they did introduce a general property tax before the emergency one was introduced on the electricity bill. I think bills were sent out for either 1 or 2 years but I can't remember exactly when. If the amount was under a certain amount AND the property was your primary residence then there was nothing to pay. That meant that you had to be tax resident in Greece to avoid paying because if you weren't tax resident logically it couldn't be your primary residence. Thus if you were non-tax resident in Greece then you had to pay whatever the amount. As far as I can remember not everybody received a bill but nobody seemed to know why some people did and others didn't. I certainly know people living near me did have to pay it and it was of the order of €100 to €200, I can't remember the exact figure.

Prior to that there has been a property tax on more expensive properties for a long time but I am not sure what the threshold is for being assessed. I have a feeling that it is an objective value over €200,000 but I could be completely wrong.

Objective property values are adjusted from time to time using the house price index that I mentioned in another thread. Since 2008 was the peak of the index it would make sense if objective values were also at their highest level then or shortly after.

Warwick

john4d
Posts: 457
Joined: Fri Dec 21, 2007 5:13 pm
Location: Near Vamos

Re: A Cautionary Tale

Postby john4d » Wed May 24, 2017 4:17 pm

Yes Warwick, this more or less agrees with what my accountant told me today.

Property tax was introduced in 2006 and ran until 2010. Not many people paid it because their house was below the threshold. From 2010 to 2013 it was collected as we all remember via the Electricity Bill. From 2014 until the present day the current system prevailed. Apparently due to the re-evaluation of property values my house retrospectively became liable for this first 2006 - 2010 tax. I had to pay approximately €300. The tax office are not telling people this, it just appears as a debt on their system.

I asked my accountant if many people are affected and was told yes there were.

I now have yet another piece of paper from the tax office showing I owe no tax. (Until they dream up another backdated tax)

The tax office today issued the papers unfreezing my account. Unfortunately they have to go to the Athens office and they then filter their way down until they eventually reach my local branch. So sometime next week I should have access to my account again. It's just a pity there's no money in it.
There's no such thing as a bad taste joke

paul g
Posts: 89
Joined: Sun Jan 18, 2009 9:20 pm
Location: Nr. Kato Gouves

Re: A Cautionary Tale

Postby paul g » Thu May 25, 2017 8:55 am

my accountant also mentioned that after the closure of the smaller tax offices and centralisation to one tax office per prefecture, they now have an army of spare staff to chase up on all this outstanding backdated stuff.

Kilkis
Posts: 8772
Joined: Sat Apr 21, 2007 3:58 pm
Location: Near Chania

Re: A Cautionary Tale

Postby Kilkis » Thu May 25, 2017 9:14 am

That quite surprises me, Paul. A few years ago my accountant said that the Chania office had lost virtually all its experienced staff and had mainly young inexperienced people. He said there was only one person there who really knew how the system worked and she was snowed under with work. Obviously it may have changed since then.

It is certainly true that they are trying to clamp down on tax avoidance. I heard recently that a UK ex-pat, who had been letting property and not declaring the income for many years, had been caught out by the tax office and is now facing massive fines and possibly a prison sentence.

Warwick


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