Developments at European level to combat tax avoidance, and in particular matters related with transfer pricing in Greece, were at the focus of the annual Transfer Pricing symposium organized by Ernst & Young Greece.
Mr. Stephen Mitsios, Head of EY Greece Tax Department, opening the event noted that apart from the specialized issues of international taxation and transfer pricing, there were several more tax issues that concerned everyone.
Specifically, he referred to tax audits focusing on the definition of tax fraud, the criminal responsibility of individuals and government safeguard measures, and noted the existing Voluntary Compliance framework as an opportunity to reduce the uncertainty regarding ambiguous tax positions.
Mr. Mitsios also referred to recent initiatives for cross-checking of transactions both internationally (CRS information exchange framework), and at local level by institutionalizing the expansion of electronic trading.
Summing up, Mr. Mitsios presented nine key conclusions that emerged from the presentations:
1. Dramatic changes in international tax landscape, which already affect the tax affairs of Greek enterprises. This has already become evident within the EU and our country with forwarding changes, such as the European Directive on tax avoidance.
2. Changes that take place either at a operational level, or in property level within Groups are making it a pressing need to be examined in the light of Article 51 of the tax code, which requires a comprehensive and consistent methodological approach.
3. The Greek tax authorities have improved their know-how and intensify transfer pricing controls, raising them as a major tax issue.
4. In a climate of local and international tax uncertainty, due to the radical change of rules, business groups are now able to significantly reduce uncertainty regarding their transfer pricing with the Pre-approval process.
5. Although tax authorities have solved many issues lately, there are still major issues to be resolved or to be explained.
6. Tax audits should be handled carefully and very seriously.
7. Taxpayers should consider directly if the law on voluntary compliance “fits them.”
8. The insurance system has changed dramatically and should be carefully considered whether, where and how it affects businesses.
9. The adoption of international and local counter-abusive rules forces businesses to review their structures and their transfer pricing in order to be able to demonstrate compliance with the new rules.