A new system is being planned by the tax administration in which, for every electronic transaction, a portion of the VAT (Value Added Tax) will be paid directly to the government, bypassing businesses. This change aims to drastically reduce tax evasion and eliminate delays in VAT reimbursement.

According to Kathimerini, the new system, promoted by the Independent Authority for Public Revenue (AADE), stipulates that for every transaction made via POS, a portion of the VAT will go directly to the state coffers. For example, if the VAT on a transaction is €100, €30 or €50 will be transferred immediately to the state at the time of payment.

The tax administration is considering two scenarios for the new system:

• A fixed percentage of VAT (e.g., 30% or 50%) will be automatically allocated for each transaction, while the remaining amount will be offset against the VAT already paid by the business.
• Each business will have an individualized VAT percentage for automatic allocation, based on the previous year’s turnover and monthly VAT payments.

For the government, this change means increased collectability and an immediate revenue stream. For businesses, however, it implies the loss of an informal “working capital,” since many companies have traditionally used the VAT collected from customers for other needs.

The tax administration notes that €25 billion of the actual overdue debt to the state comes from unpaid VAT. The introduction of monthly VAT payments last year to address this issue highlights the difficulty small and medium-sized businesses face in paying the tax on time.

Full automation of VAT collection requires significant upgrades to payment systems, as well as adjustments to POS and cash register software. The AADE assures that the new cash registers are already compatible with the measure, and pilot implementations will be carried out by service providers.

The new automatic VAT collection system is part of a broader plan for the digital transformation of the tax administration, including the use of AI to improve controls and ensure tax refunds are processed within 30 days.