Thousands of «invisible» transactions, undeclared foreign POS terminals and payments ending up outside the Greek banking system have put Greece’s Independent Authority for Public Revenue, AADE, on alert, with tax inspectors launching a new round of checks across restaurants, entertainment venues and tourism businesses throughout the country.

Despite the interconnection of cash registers and POS terminals – a measure that brought the state more than €2.5 billion in additional revenue and was presented as a major weapon against tax evasion – offenders appear to have found a new way to bypass the system, using undeclared POS devices linked to providers and banks abroad.

The new tax evasion model is based on transactions that look perfectly normal to customers but are never recorded in AADE’s electronic systems. Businesses issue receipts and customers pay by card, yet the transaction data are not transmitted to myDATA and the money does not end up in Greek business accounts.

Instead, it is transferred to personal accounts belonging to business owners abroad, allowing revenue to be concealed and VAT already paid by consumers to go undeclared.

Undeclared POS terminals

Inspections already under way have uncovered thousands of cases involving the use of undeclared POS terminals, mainly in food service and entertainment businesses with high retail turnover.

According to information, around 80% of the undeclared POS terminals identified so far originate from Bulgaria, while similar cases have also been recorded with POS devices linked to providers in the United Kingdom, Lithuania, Belgium and Ireland.

Tax authorities believe that money from undeclared transactions is initially deposited in foreign accounts and then repatriated mainly through cash transfers. Bulgaria is considered the most popular option because of its geographical proximity and the ease of travel, as up to €10,000 per person can be transported without any obligation to declare it to the competent authorities.

With the involvement of relatives, associates or employees, large sums can enter Greece without leaving a trace in the banking system.

Technological loopholes

AADE officials acknowledge that tax evasion is now adapting to the new digital environment and exploiting technological loopholes in order to continue operating. For this reason, inspections are expected to intensify significantly over the summer, particularly on islands, in tourist areas, beach bars, restaurants, cafés and entertainment venues, where card transactions rise sharply.

The main targets will be businesses that have either failed to connect their POS terminals to their cash registers or are using POS terminals from other countries without having declared them to AADE. Inspectors are also examining cases involving cash registers operating without being registered in the tax administration’s electronic systems.

The scale of the problem is also reflected in the findings of recent inspections. At the beginning of the year, 55 businesses were found not to have connected their POS terminals to their cash registers and were fined a total of €680,000. Last summer, dozens of violations were also recorded, mainly in the Peloponnese, where businesses were found to be operating with undeclared POS terminals.

Fines

One indicative case involved a well-known taverna in central Athens, where inspectors found eight undeclared POS terminals, resulting in a €40,000 fine. In another case, a multi-purpose entertainment venue in the same area was found to be operating with three POS terminals that were not connected to the cash register, leading to a €20,000 fine.

Under current legislation, owning a foreign POS terminal is not illegal in itself. Any active payment device used by a business operating in Greece may come from a provider in another country, provided it has been properly declared in AADE’s POS register and the transaction data are transmitted to myDATA.

The problem begins when POS terminals are either not declared or operate without being connected to the tax administration’s electronic systems.

The penalties provided for are particularly strict. Failure to install or use a POS terminal carries a fine of €1,500, while failure to connect a POS terminal to a cash register can result in fines of up to €10,000 for businesses keeping single-entry books and €20,000 for those keeping double-entry books. At the same time, POS providers that fail to comply with the existing framework face fines of up to €200,000.