The Independent Authority for Public Revenue (IAPR) is adding by the Independent Authority for Public Revenue (IAPR) to the large pool of overdue debts considered uncollectible, raising the amount from €36 billion today to €41.264 billion, that is, to 36% of the total debts of €114.516 billion owed to the Tax Administration.
On the other hand, the increased transfer of overdue debts—to the special ledgers for uncollectible debts—allows the AADE to better focus on pursuing the collection of debts where there is a possibility of recovering funds for the State.
These debts are essentially written-off debts that arose many years ago and, despite the efforts of the Tax Authority, could not be collected. They mainly concern old debts originating from bankrupt businesses or deceased taxpayers and have been recorded for decades in the registers of the tax and customs authorities.
To record a debt in the special books as uncollectible, a specific procedure and approval decisions are required, depending on the amount of the principal debt due:
- For debts up to €300,000, a decision by the Head of the Tax Office or Customs Office is required, following a recommendation from the Judicial Department.
- For amounts ranging from 300,000 to 3 million euros, a decision by the Governor of the Independent Authority for Public Revenue (AADE) is required, following a recommendation by the competent head of the KEBEIS (Certification and Collection Centers), Tax Office, or Customs Office.
- For debts exceeding 3 million euros, a decision by the Governor is required, following a recommendation from the Collection Operations Unit.
The criteria
According to the Public Revenue Collection Code (KEDE), for overdue debts to the State and confirmed debts to third parties to be classified as uncollectible, all of the following conditions must be met cumulatively:
- Completion of investigations without the identification of assets belonging to the debtor and co-obligors or their claims against third parties.
- Filing or inability to file criminal charges.
- A finding of objective inability to collect following an audit.
In fact, with more recent provisions passed last summer by the Hellenic Parliament that amended the Code of Civil Procedure, additional criteria were added, and it is now permitted to classify as “uncollectible” and debts, despite the existence of assets belonging to the debtor or a jointly liable party, provided that the existing assets cumulatively meet certain conditions, such as:
- The total value of the ownership and other real rights in real estate held by the debtor and the jointly liable persons is of particularly low value in relation to the total principal amount of the debt due, does not exceed 5% of the amount of the debt and, in any case, the amount of 100,000 euros, as this value is determined, in turn, by an appraisal by a certified appraiser, where available, or by the sum of the taxable value of such rights for the calculation of the Single Property Tax.
- The total value of the movable property of the debtor and the jointly liable persons, even if its seizure could not be enforced despite a written order from the competent tax or customs authority, is of particularly low value in relation to the amount of the total principal debt due and does not exceed the amount of 30,000 euros.
The following are not written off
Debts recorded as uncollectible are not written off; rather, collection actions are suspended for ten years from the end of the year of recording.
Specifically, from the date the debt is recorded in the uncollectible accounts and for a period of ten years:
- The statute of limitations on the debt is automatically suspended.
- No tax compliance certificate is issued to the debtor or any jointly liable parties for any reason (only a debt confirmation).
- The debtor and all jointly liable parties shall not be issued any other certificate required by law for the transfer of assets, unless such transfer involves the sale of assets, the proceeds of which will be used for the same purpose.
At the same time, all bank and investment accounts and the contents of safe deposit boxes at banks or other credit institutions belonging to all of the above persons are frozen, while the State reserves the right to take all coercive or non-coercive measures provided for by the applicable provisions and to conduct a set-off in the event that assets are found to exist, even after the debt has been recorded in the special book of uncollectible .