1. What is the most significant change to your region/jurisdiction’s tax legislation or regulations in the past 12 months?
The most significant change in Greece's tax legislation over the past year has been the expanded implementation of My Data, a digital platform introduced by the Greek tax authorities. On this platform, taxpayers are required to upload most of their accounting and tax information and transactions.
My Data fundamentally changes how business transactions are recorded and reported vis-à-vis the tax authorities. It mandates the digital transmission of sales and purchase data to them in real time regarding revenues. This includes data from receipts, invoices, and other business documents. The core objective is to combat tax evasion by ensuring all transactions are accurately captured and reported, thereby improving the government's revenue collection. This is anticipated to be further achieved by repopulating tax returns based on data transmitted to the My Data platform. Another target is to have tax audits that are more targeted through focused data analysis.
Alongside the interconnection of point of sale with the software for receipt issuance, officials expect a significant increase in tax revenue and enhancement of fiscal awareness.
2. What has been the most significant impact of that change?
The introduction of My Data in Greece has posed significant challenges for businesses, particularly in adapting to new technology requirements and reconfiguring accounting systems. Such a comprehensive digital platform significantly curtails the scope for tax evasion, ensuring a more accurate and transparent representation of business transactions. The immediate result is an enhancement in compliance, leading to a fairer tax environment where businesses are more accountable for their financial activities.
Additionally, My Data brings about significant business process efficiencies. The shift from manual, paper-based processes to a digitalised system streamlines operations, reducing the time and resources previously dedicated to tax reporting. For businesses, while initially challenging due to the need for technological adaptation, this transition promises long-term benefits in terms of operational effectiveness. Moreover, this change aligns Greece more closely with global digital taxation trends, setting a precedent for a modernised approach in tax administration that is reflective of contemporary economic practices.
Looking ahead, My Data is expected to revolutionise the Greek tax landscape. It is likely to lead to more accurate tax revenue forecasting, reduce administrative burdens over time, and foster a culture of compliance. For businesses, while the initial phase involves adapting to new systems and processes, the long-term payoff will be a more transparent and efficient tax environment. At Deloitte, our role can be pivotal in supporting our clients through this transition, helping them to understand and effectively meet their new compliance regulations.
3. How do you anticipate that change impacting your work and the market moving forwards?
The introduction of My Data in Greece marks a significant shift in our tax advisory practice. This digital reporting system necessitates a new approach where real-time compliance becomes paramount. Our role is evolving beyond traditional tax advice to include guiding clients in integrating and adapting their accounting systems to meet these new digital requirements. This shift is not just about compliance; it's about leveraging technology to provide more strategic and forward-looking tax advice. As such, our specialism is expanding to encompass tech-driven solutions, positioning us as crucial partners in our clients' transition to this digital era of tax reporting.
In detail, we expect this change to impact our work in several significant ways:
Advisory and implementation support – there's a growing need for comprehensive advisory services to help businesses understand and implement My Data. Our role is evolving to include more support in system integration, data management, and reporting processes compliance. We're also focusing on training and development to equip our team with the necessary skills to navigate these changes.
Increased demand for technology solutions – as businesses seek to comply with My Data, there's a surge in demand for compatible accounting software and digital solutions. This presents an opportunity for tech-focused in-house development of tools and applications, potentially leading to innovative solutions that can integrate seamlessly with the My Data system.
Data analytics and insights – the vast amount of data collected through My Data opens new avenues for data analytics. This can lead to more insightful business and market analysis, enabling us to provide deeper, data-driven advice to our clients, potentially identifying trends and opportunities that were previously not visible.
On the other hand, for taxpayers – especially corporations, as well as small and medium-sized enterprises – [with regard to] My Data, despite the embedded complexities and initial objections, it seems that the final balance is rather positive. The increased appetite for outsourcing core functions of the tax and accounting department has released skilled human resources who now are engaged with many more value-adding tasks.
In summary, My Data is reshaping our work and our clients’ needs by placing a greater emphasis on technological integration, proactive advisory services, and data-driven insights. It's also influencing the market by fostering a more compliant and transparent business environment. As we move forward, adapting to these changes will be crucial for continued success and relevance in the evolving tax landscape.
4. How has this changed the way you offer tax advice?
For Deloitte Greece’s tax and legal business, My Data and generally the increased use of technology and the outspread of the digital economy positively disrupted our strategy. We focused heavily on technology and the adoption of new tools and applications to facilitate our business offerings. We invested in tax technology, we oriented people to assist such developments, and we exploited technology for the benefit of quality delivery. We have seen an increase in demand for outsourcing services since the market perception is that advisers can afford the investment in new technologies and are far more familiar with the recent developments. By combining tax compliance and technology, a corporation can exploit its data further to help inform their business strategies, multiplying, thus, the impact and the effect of our work.
In detail, what we have seen in the past 12 months may be summarised as follows.
Emphasis on digital compliance – the shift to tax digitalisation has led us to develop advanced cloud-based tax compliance software and analytics tools. Our advisory services now heavily integrate technological aspects. We are not only advising on tax matters but also on how to integrate clients' accounting and reporting systems.
Human resources upskilling – apart from recruiting personnel with specialism in tax technology, we have developed comprehensive training programmes, which include workshops on digital skills and hands-on experience with our tax software, establishing that our professionals are well equipped to integrate cutting-edge technology into our firm's tax advisory services. Moreover, our core tax advisory team focuses on more sophisticated advice, as the technology helps clients address most of their day-to-day questions. Finally, we have deployed an ambitious reskilling and upskilling programme for all our advisers, cross-level and cross-service lines to help them adopt and embrace the new technological solutions, proving once again our organisation’s commitment to agility and evolution based on our talented people.
Offering new tech-enabled services – our firm now offers timely services through innovative solutions. For instance, our new service offering myDRec facilitates reconciliations and highlights discrepancies between prepopulated tax returns (that are based on data transmitted to the My Data platform) and the tax returns finally filed (that are based on the postings in the statutory books) down to the level of a single tax document or transmission. Additionally, ARES is a digital solution that retrieves data directly from the tax authority, creating automated entries in Business Digital Hub (our global tax product for bookkeeping). This integration significantly improves the efficiency and accuracy of our tax services, reducing errors and saving time.
Educating and redirecting our clients – we have proactively reached out to numerous clients, assisting them in understanding the digital tax changes and their business impact. Our efforts include creating easy-to-understand guides and videos tailored to different client segments, which also promote our tech-enabled services. Our main selling point is the importance of precise calculations and reporting in the realm of digital taxation, facilitated by our advanced technology solutions. With the wealth of data available through My Data, our role now includes a greater focus on data analytics. We leverage this data to provide more insightful, evidence-based advice, offering clients a clearer understanding of their financial and tax positions and helping them make more-informed business decisions.
5. What potential other legislative/regulatory changes are on the horizon that you think will have a big impact on your region/jurisdiction?
Looking forward, a significant legislative development anticipated to impact Greece and numerous other jurisdictions is the rollout of pillar two under the OECD's global tax reform. This initiative introduces a global minimum tax rate fundamentally designed to ensure that multinational enterprises [MNEs] contribute their fair share of taxes in every country they operate [in]. This marks a decisive step towards greater equity in global taxation and is poised to reshape international tax practices.
In addition to this, we are also expecting to see the introduction of new tax regulations pertaining to environmental, social, and governance [ESG] criteria, with a particular focus on the green economy. This likely includes a new generation of tax incentives that align with these ESG principles, reflecting a growing global trend towards sustainable and environmentally responsible business practices.
Furthermore, there is an anticipation of new tax rules surrounding company transformations in alignment with EU legislation. These rules are expected to simplify the regulatory framework for both domestic and cross-border transactions, facilitating smoother and more-efficient business restructurings and mergers.
6. What are the potential outcomes that might occur if those changes are implemented?
The implementation of pillar two of the OECD's global tax reform, including the introduction of a global minimum tax rate, is poised to impact Greece as well. This change, aimed at ensuring multinational enterprises pay a fair share of tax, will curb profit shifting to low-tax jurisdictions. With respect to the impact on Greece’s public revenue, as per the disclosed computations of the Greek Ministry of Finance, the additional revenues are not expected to be material. The number of Greek MNEs affected is not expected to be notable as well. Nevertheless, this shift may influence foreign investment strategies, as businesses will prioritise operational efficiencies over tax-driven decisions, potentially leading to more-robust and sustainable economic growth in Greece.
Alongside pillar two, the anticipation of new tax rules focusing on environmental, social, and governance criteria, especially in the green economy, suggests a move towards more responsible and sustainable business practices. These new regulations could introduce incentives for environmentally friendly initiatives, aligning Greece's tax system with global sustainability trends. The integration of these ESG-focused tax rules will not only encourage businesses to adopt greener practices but may also attract new investments in the burgeoning green economy sector.
Furthermore, the recent changes regarding the simplification of tax rules on company transformations aiming at making business restructurings and mergers more efficient and less cumbersome are expected to foster a more dynamic and agile business environment, encouraging domestic growth, and attracting international enterprises.
7. Do you think that change will have a positive effect on both your practice and the wider regional/jurisdictional market?
Definitely, I believe it has the potential to yield positive effects both for our practice and the wider regional market, albeit with certain challenges to navigate.
The forthcoming implementation of pillar two of the OECD's global tax reform, alongside other regulatory changes, is expected to have a positive and transformative impact on our tax practice and the broader market in Greece. This new landscape will necessitate advanced ERP systems for clients to effectively monitor and comply with these regulations. The integration of such systems represents a substantial opportunity for our practice to offer hybrid services, combining tax advisory with technology consulting. This dual approach will not only establish compliance but also optimise operational efficiencies, positioning our firm as a key facilitator and innovator in this evolving tax environment.
The emergence of ESG-related tax regulations and incentives for the green economy will further reshape the business landscape. As companies adapt to these changes, our role as tax advisers will expand to include guidance on capitalising on ESG-focused tax benefits in alignment with the overall strategy of the enterprise. This shift aligns with global sustainability trends, potentially spurring investment, and innovation in environmentally responsible practices. It also presents an opportunity for our practice to advise on the financial and strategic advantages of embracing sustainable business models, thereby contributing to economic growth and enhanced market competitiveness.
Finally, Greece's commitment to aligning with EU directives is likely to attract more foreign investment, bolstering economic stability and growth. For our practice, this means providing strategic advice on navigating these new regulations and seizing emerging opportunities.
In summary, guiding our clients through these regulatory changes, especially with the integration of advanced ERP systems for global tax compliance, positions us to offer comprehensive, value-added services in a market poised for growth and innovation.
8. Are there any regulatory/legislative changes you believe should be implemented in your region/jurisdiction?
In my view, the focus of the tax policy officials in Greece should be on two main axes: modernisation of the investment incentives framework and rules to combat delays in tax litigation, especially before the tax courts.
Encouraging innovation through targeted tax incentives for research and development activities can be a key driver for economic growth. Such incentives can attract high-tech industries and foster a culture of innovation within the country.
The acceleration in the completion of tax litigation proceedings requires bold moves by the government, but it is necessary to comply with the EU trends on taxpayers’ rights.
Apart from the above, with the growing emphasis on sustainability, introducing or enhancing environmental taxes could be a step forward. This might include carbon taxes or incentives for green investments, aligning Greece's tax policy with environmental goals and global trends towards sustainable development.
In addition, building on My Data, further digitisation of tax processes can be pursued. This includes simplifying tax filing and payment procedures, enhancing online platforms for taxpayer services, and leveraging technology for more-efficient tax administration.
Finally, aligning with global efforts to tax the digital economy is important. This involves adapting our Greek tax system to effectively address tax digital services and e-commerce, aiming that digital businesses contribute fairly to the tax base.
9. How do you believe those changes would help improve the tax landscape in your market?
We expect certainly a positive impact on FDI [foreign direct investment] in case institutional investors are convinced that tax disputes are cleared fast and efficiently, since this is traditionally one of the areas of concern. Combined with the elevation in the effectiveness of Greek tax auditors, the expected impact on Greece’s economy from local and foreign investments will be amplified.
Furthermore, further digitisation and simplification of tax processes would streamline tax administration, making it easier for businesses and individuals to comply. Automated systems reduce the likelihood of errors and tax fraud, leading to more-accurate and efficient tax collection.
Additionally, environmental taxation encourages businesses to adopt greener practices, aligning Greece's economic growth with environmental sustainability. This approach not only addresses global environmental concerns but also opens new avenues for green investment and innovation.
10. How are issues surrounding the taxation of the digital economy affecting your work?
Whilst Greece has already incorporated all relevant EU directives on e-commerce and digital payment disclosures, it still has a lot to do with respect to the taxation of the digital economy. A lot of attention has been given to real estate-related income, focusing on capturing tax evasion and abusive practices, but still, it seems that there is not yet a defined and holistic strategy of the administration on the subject matter.
Nevertheless, and in anticipation of rules governing the digital economy, one should stress the fact that we stand before one of the most significant challenges tax systems face worldwide, and Greece is no exception.
In general, the digital economy transcends traditional national boundaries and poses unique challenges for taxation. Adapting to these changes means staying abreast of global developments, such as the OECD's proposals on digital taxation, and understanding how they apply within the Greek context. Our work increasingly involves interpreting and applying these new norms to provide accurate advice to our clients.
As countries, including Greece, explore or implement digital services taxes [DSTs], there is a growing need to advise clients on these new taxes. This includes understanding which services are taxable, how tax is calculated, and what obligations companies [have to] report and pay DSTs. This means that our people will have to obtain the skills required to understand and address issues that were not relevant five years ago. This in-house transformation of our tax department is ongoing. We leverage our global network, as well as our agile and inclusive culture that enables us to collaborate with colleagues from different backgrounds, trusting them to upskill our existing teams. Keeping our team up to date with the latest in digital economy taxation is essential. We invest in ongoing training and development to ensure our professionals are equipped with the knowledge and skills to advise clients effectively in this rapidly changing area.
The evolving digital tax landscape introduces new risks and planning opportunities. Our role involves helping clients navigate these risks, such as potential double taxation or compliance challenges, and providing guidance as they strategically plan their operations and tax strategies considering these digital taxation developments.
11. How would you describe the tax authorities’ approach in your region/jurisdiction?
Modernisation and [a] business-friendly approach are keywords that can describe the approach of the tax authorities on entrepreneurship. While some 10 years ago one could easily face closed doors when attempting to reach out to tax officials, today the reality is totally different. Tax authorities’ leadership has shown a strong commitment to the principles of fairness and transparency. There's a growing trend towards cooperative compliance models. The tax authorities are increasingly engaging in dialogue with taxpayers, especially large corporations, to ensure transparency and mutual understanding of tax obligations and risks.
The Greek tax authorities have been making significant strides in digitalising their operations. Initiatives like My Data exemplify this shift towards a more technologically driven approach. This move not only enhances efficiency but also aims to improve compliance and reduce tax evasion.
There has been a concerted effort to strengthen compliance and enforcement measures. The tax authorities are increasingly vigilant in identifying and addressing non-compliance, utilising technology, including social media monitoring, and data analytics to detect discrepancies and potential tax evasion. Moreover, they constantly request constructive feedback from businesses in the initiatives they adopt, with a view to proceeding to rectify actions when needed.
What should also be noted is that the Greek tax authorities are actively aligning with international tax standards and practices, particularly those set out by the OECD and the European Union. This includes efforts to combat base erosion and profit shifting and aligning with global initiatives like the OECD's two-pillar approach to taxing the digital economy.
Despite these positive developments, challenges remain in terms of administrative efficiency. Taxpayers sometimes face complexities in navigating the tax system, and there is ongoing work to streamline processes and improve the taxpayer experience.
Additionally, the tax audit focus is shifting from the scholastic application of the tax rules to a more structured examination of the key tax issues, mainly relating to transfer pricing and anti-abuse provisions. What is still problematic, as already mentioned above, is that the tax juridical system in Greece is not yet following the same speed of evolution on dispute resolution, albeit the fact that the tax courts have made remarkable progress in dealing with complex issues, as well as adopting an innovative interpretation of the law in landmark cases.
The approach of the Greek tax authorities is rapidly evolving, marked by a move towards digitalisation, stronger compliance and enforcement, alignment with international standards, and a focus on cooperative engagement with taxpayers. As tax professionals, we continually adapt to these changes, focusing on providing our clients with the most current and effective advice and support.
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