A new digital registry for all used cars subject to the special VAT regime for resellers is introduced by the Ministry of Finance’s draft bill, which was released for public consultation yesterday.

The registry, maintained by the Independent Authority for Public Revenue (AADE), will include every individual or legal entity that acquires or sells vehicles under this special VAT scheme. Registration will now be mandatory for anyone wishing to continue their business activity.

This registry will also compulsorily include persons—even those not normally subject to VAT—who import used cars from other EU member states under the reseller scheme, when they apply for vehicle registration certificates and licenses. Without registration, the registration process will not proceed.

This measure follows closely on the heels of a major triangular fraud uncovered by the First Customs Office in Thessaloniki, where Greek companies “laundered” luxury cars through a shell company in Bulgaria. The loss to the Greek state from just 19 supercars involved in the case exceeded €212,000. The new regulation effectively closes loopholes that previously allowed opportunists to bring nearly tax-free vehicles into Greece by exploiting a system originally designed for the opposite purpose: to prevent double taxation in intra-community transactions.

The so-called “margin scheme” calculates VAT only on the dealer’s profit margin, not on the full value of the vehicle. This system, applied throughout the EU, had long been exploited for “carousel” fraud. Using a Bulgarian shell company with a valid VAT number, cars were bought in Germany without VAT, falsely declared as taxed when they had not been, and finally ended up in Greece with margin scheme invoices. As a result, the vehicle arrived almost tax-free, even though it might have been sold with full VAT in Germany.

With the new digital registry, AADE will have full visibility of vehicles imported under the margin scheme. Anyone purchasing vehicles under this scheme, whether in Greece or another EU country, will be required to declare their acquisitions in the registry and keep their information updated with every transaction. Specific details and the operation of the registry will be determined by a joint ministerial decision.

A critical provision concerns removal from the registry. If, after an AADE inspection, someone is found to be misusing the special VAT regime, they will be removed by decision of the competent authority. This removal will take effect from the date of issue and last for three years. During this period, the individual will be prohibited from participating as a member in any company operating under this special scheme.

In practice, this represents the first significant step toward stopping the long-standing VAT revenue leakage, as for many years some have exploited the margin scheme to avoid paying taxes on imports of luxury—and other—used cars.