The incentive to join arrangements to escape criminal prosecution for debts that have been overdue for more than 4 months in the tax office, as ascertained by the tax office, is activated – and retroactively – by a decision issued by the Governor of the Independent Public Revenue Authority, Giorgos Pitsilis.

Based on Law 5193/2025, passed in April (Article 227), the legal framework regarding the criminal offence of non-payment of debts to the state and third parties is improved for debtors.

The new provision regulates the consequences of being subject to debt regulation or suspension of debt collection in criminal prosecution. Specifically, it provides that in the event of inclusion in a debt payment arrangement or debt collection suspension, criminal prosecution is suspended for the duration of the arrangement or suspension, and in the event of full payment, the criminal offence is eliminated.

On the other hand, however, it defines the procedure to be followed at various stages (before or after the submission of a request to the Public Prosecutor, before or after the prosecution), the obligation to inform the Prosecutor in case of loss of the arrangement, and provides for the suspension of the statute of limitations for the criminal offence during the period of the arrangement.

According to Pitsilis’ decision, the measure applies to debtors (individuals and legal representatives or members of legal entity debtors) who have criminal liability for the offence of non-payment of debts to the state and third parties.

The new provision broadens the scope of application, makes the procedures clearer and strengthens the incentives for entering into a regulation and paying debts.

Typically that the new provisions apply retroactively, as of April 11, 2025, when Law 5193 was passed.

In practice, however, because of the retroactive effect of the more lenient provision of a criminal law under Article 2 of the new Criminal Code, the new provisions also cover all cases pending on April 11.

Basic innovations introduced by the new provisions are as follows:

a) the grounds for suspensionof criminal prosecution and for postponement of execution/interruption of the sentence are extended, since, according to the new provisions, these legal consequences are now brought about not only by the inclusion of debts in a regulation but also by the suspension of their collection.

b) it is established – for the first time but subject to conditions – that the inclusion in a regulation of “partial” payment of debts is sufficient reason for the competent services of the Tax Administration not to send a request for criminal prosecution to the competent Public Prosecutor.

(c) The request for criminal prosecution is also “frozen” if all the debts are placed under suspension of collection.

Which prosecutions are “frozen”

Based on the above, the competent Services of the Tax Administration are required to:

a) In cases where all the overdue debts have already been subject to a regulation or suspension of collection, which is in force, under the applicable provisions, regardless of whether the subjection to the regulation or suspension of collection took place before or after the lapse of four (4) months after the debt became overdue, not to proceed with the sending of requests for criminal prosecution for the offence of non-payment of debts to the State and third parties.

(b) To send to the competent prosecutor without delay applications for criminal prosecution for the offence of non-payment of debts to the State and third parties in the event of loss of the arrangement or the suspension of collection is no longer in force.

c) To inform the competent public prosecutor without delay in the event that a criminal prosecution application has been filed and all the overdue debts have been subject to a debt payment arrangement or are under suspension of collection.

(d) The competent public prosecutor must be informed without delay in the event that a criminal prosecution has been filed and in the event of loss of debt adjustment or cessation of debt suspension.

The main changes

1) Broadening grounds for suspension of prosecution/ suspension or discontinuance of sentence: the scope of suspension of prosecution is broadened by adding suspension of debt collection as an independent ground for suspension of prosecution for the offence in question.

2) Failure to file a criminal prosecution application to initiate criminal prosecution in the case of the inclusion in the regulation of arrears or the inclusion of debts in suspension of collection: with the new provision, unlike the previous provisions, under which the Tax Administration had a binding authority to file an application for initiation of criminal prosecution against the person liable for payment irrespective of the legal settlement of the debts, the Head of the Tax Administration responsible for pursuing the collection of the debt is obliged not to send a request for criminal prosecution to the Public Prosecutor of his seat in cases of debtors whose entire outstanding debt is subject to any instalment payment arrangement, either by law or by court decision.

A debt may be resolved through a court-certified reorganization agreement, a court-approved settlement under Law 3869/2010, or a decision by an administrative body. It may also occur in cases where the collection of all overdue debts is suspended within four months of the debt becoming overdue, for as long as the arrangement or suspension remains in force.

Note that even after four (4) months after the debt has become due, if a request for criminal prosecution has not yet been filed (by the Head of the Tax Administration Service responsible for seeking collection of the debt to the Prosecutor of the Court of First Instance of his/her seat), the inclusion of all outstanding debts in a payment arrangement or suspension of collection also entails the obligation to refrain from filing a criminal prosecution application on behalf of the Tax Administration.

It should be noted that in any case where the Tax Administration and the debts have filed a criminal prosecution application have been subject to a regulation or suspension of collection, the Tax Administration is obliged to inform the competent Public Prosecutor (whether or not a criminal prosecution has been filed) of the further development of the criminal proceedings by the competent prosecuting authority.

3) Immediate notification of the Public Prosecutor in case of loss of the arrangement or termination of suspension of collection: in case of loss of the arrangement, the application for criminal prosecution as well as the debt schedule will include, in addition to the amount of outstanding debts, the original amount already paid, i.e. the original amount of debts subject to the arrangement, as the criminal offence has already been committed for this amount. The same obligation to inform the competent Public Prosecutor’s Office is also applicable in the event of the suspension of debt collection.

4) Suspension of limitation of criminal offence: the new provision provides for the suspension of the limitation of criminal offence for the entire duration of the instalment arrangement or the suspension of collection, with the addition of the safeguard that the limitation period is not completed before the expiry of one year from the expiry of the suspension, to provide a reasonable period for filing a criminal prosecution application or for the continuation of the criminal prosecution, as the case may be.