HELLENIC TAX CODE FOR TRANSACTIONS
Hellenic Tax Code for Financial Transaction Mapping
With the publication of the Law 4093/2012 titled “Approval Medium Term Fiscal Strategy 2013-2016 – Emergency Measures of Implementation of Law 4046/2012 and the Medium Term Fiscal Strategy 2013-2016 ‘ in the Official Gazette on November 12, 2012, there is a provision regarding governing taxation, amongst other, such as that of the Hellenic Tax Code for Financial Transaction Mapping (KFAS) – Implementation of the Directive on rules 2006/112/EE pricing.
Therefore, it is envisaged, the abolition of the Code of Books and Records (KVS) starting from 1.1.2013, and its replacement by the Hellenic Tax Code for Financial Transaction Mapping (KFAS). In essence, the most important changes and aspects of the new framework set out in that new Code are the following:
With the new provisions, a considerable simplification of the framework relative to the KVS, occurs. The basic principle is that the transactions representation should make audit verifications easier.
i) Method of Transactions Display
- There is a clear provision of the persons, who will be responsible for mapping transactions and particularly those who are responsible for bookkeeping, data editing and data submission for cross verification.
- The obligation of transactions’ mapping in the books and records in a manner that makes audit verifications uncomplicated is also established.
- The possibility to word the data in a foreign language (and not in Greek) regarding international transactions, as well as the invoices and the data standing as invoices for transactions within the country borders is established exceptionally for this case.
- With those new provisions, a considerable simplification of the framework relative to the KVS, occurs. The basic principle is that the representation of transactions should make audit verifications easier.
- The display of the foreign currency in which the transaction is carried out (and not in Euros), is established exceptionally for this case, as well.
- For transactions with individuals who are non-traders, the possibility of sending an electronic copy of tax-information documents intended for the customer is provided, in case the customer agrees with receiving electronic documents.
- The person responsible for mapping transactions, may merge or consolidate any book or books, asset or assets, book and record or books and records to another, provided that from the book or the record resulting from the merger or consolidation are provided at least the data of the merged or combined books or records. In consolidation of a book with a record, the book may be kept in more than one copies.
- The distinction between the business selling goods and these providing services is eliminated.
In general, the obligation of double-entry bookkeeping extends to all limited companies and to companies with a turnover of more than 1.5 million Euros. The remaining companies may keep an income and expenditure book.
ii) Keeping of Simple and Double-entry Books and Other Obligations
- There is a provision of simple and double Entry Bookkeeping corresponding to the Books of B (B) and C (Γ) category, respectively.
- The type of record books (simple or double-entry) depends on the legal form of the company, the type of activity and the liable’s amount of gross revenue from the previous accounting period. More specifically:
1. For gross annual revenue up to 1,500,000 Euros, simple- entry books should be kept, and for gross revenue exceeding EUR 1,500,000, double-entry books should be kept.
2. Double entry Books should be kept in any case, by domestic and foreign, limited and limited liability companies as well as by private capital companies.
Exceptionally, simple – entry Books can be kept by:
- foreign companies, installed in Greece, accordingly to the compulsory Laws 89/1967 ( Art. 25, Law 27/1975) and 378/1968,
- branches of foreign airlines operating in Greece that are tax-deducted from income taxation, on the basis of reciprocity and
- foreign Limited and Limited Liability companies that do not have an establishment at the Greek territory, provided they erect a real estate of their ownership into the Greek territory, or realize into such a real estate additions or expansions.
- Simple – entry Books are kept by traders, who engage in a specific activity, such as newspapers and magazines agents, wholesalers of tobacco products, operators of second class ships of Article 3 of Law 27/1975 and the owner of liquid fuel stations for trading petrol and diesel, as well as the seller of diesel for heating purposes.
- Individuals are exempted (with some exceptions) from the obligation of bookkeeping and of issuing retail receipts, if they realized during the previous annual accounting period gross revenue up to 10,000 Euros from the sale of goods or services, cumulatively or separately.
- There is the possibility of not – printing of non – certified books that are updated via a computerized procedure, provided their data are stored in electromagnetic storage media, and provided that those data will be printed immediately when requested by a tax audit.
Changes at the dates of Books’ updates are due, namely:
1. Regarding double – entry bookkeeping.
2. Of the journal/s till the end (and not until the 15th day anymore) of the following month after the issuance or receipt of the corresponding supporting documents and on cash operations from the time they are carried out, while it is also mentioned that this deadline may not exceed the timely submission of the VAT return, and that of the inventories book with the inventory value and of other assets, as well as the finalisation of the balance sheet until the timely submission of income tax return.
3. Regarding simple-entry bookkeeping, income and expenditure book until the end of next month of each calendar quarter and not beyond the deadline of timely submission of regular VAT return.
- In case of machinery damage or software malfunction in general, the deadline to update books is extended at most to the closing date of income tax return submission, with the exception of the detailed information of paragraph 23 Art. 4 (in respect to specific cases of additional books).
- The endorsement of books and records except of the A.P.Y. for services and delivery notes, is eliminated.
iv) Endorsement of Books and Records
- The Obligation of traders for endorsement of books and invoices is removed in general; however it is maintained until 31.12.2013 for the handling (delivery notes) and value data of retail trade services (A.P.Y.).
Comments – Remarks:
- There is not, however, an explicit provision for the obligation to use a cash machine or a fiscal instrument, as described by the Law 1809/88.
- The obligation of electronic file management maintenance per accounting period is also introduced for traders keeping double-entry books. This file should be updated by the end of the month following the deadline for submission of income tax return with analytical data of the last provisional and of the final balance of accounts of all grades, journals, inventories book and balance sheet, of the information provided by any additional books remaining, and of the asset registry, provided these are kept via a computerized procedure.
- The additional books and the book of technical specifications and production – cost estimation, are eliminated, with some exceptions
v) Abolition of Books and Records
- The inventory book is eliminated; however, monitoring of inventory (for businesses with a turnover above € 5,000,000) will be made through the “account no. 94” of cost accounting provided for in GAAP, which refers to inventory and the manner inventory accounts are kept.
- The book of production and of cost estimates, as well as the book of technical specifications, are eliminated.
- The obligation of branched transactions’ registration in particular accounting books or records is also eliminated. Those transactions are recorded to the headquarters’ books, apart from purchases, sales and funds that are monitored separately from the corresponding company data.
The voucher of quantitative receipt is eliminated and replaced by the obligation to issue a shipping record (“reverse statement”). There is also the introduction of a new obligation in order to issue that consignment note from the person liable for transactions’ mapping on a quantitative receipt to his professional establishment, without any element of movement, tradable or fixed goods by any third party for purchase, sale, simple mediation for sale, warehousing, storage, use and processing, if the sender is liable for transactions’ mapping or a farmer of special status. Once a purchase invoice is issued directly at the reception of goods, then the consignment note is not required to be issued.
The submission of the following statements and balance sheets is also removed:
1. The list of doctors, contained in the book of doctors’ royalties.
2. The list of parties responsible for trades’ mapping – stackers, contained at the inventory book.
3. The state with counterparties responsible for trades’ mapping of the debtor to issue coaches’ traffic tickets.
4. The accounts balance of all tiers of the current fiscal year from the debtor responsible for transactions’ mapping, who keeps accounting records.
All additional books are eliminated, except for the exploiters of living space or hospitality, schools, clinic or clinics, beauty salons, gyms, parking, doctors and dentists, in which cases it is demanded to be kept by hand, additional books, and by computerized systems the use of special devices of safe labelling. This requirement is waived for the above mentioned professionals from 1.1.2014.
- The requirement to issue a consignment note for non-tradable goods is also eliminated.
- Rules concerning settlement transactions are getting stricter in order to reduce cash transactions.
vi) Cross Checking and Proof of Trade
- It is expected that for purchases of goods or services worth of more than €3,000, partial or total payment is required via bank transfer or with a recipient’s check.
- Tax issues of more than € 3,000 concerning the purchase of agricultural products from the person who produced them will be settled through a buyer’s check or with a bank account deposit, from now on. Exceptionally, mutual offsetting between counterparties is allowed.
The obligation to indicate the VAT number on the representational elements of any kind of receipts or cash payments for transactions of natural or legal persons or partnerships above €12,000 issued by the trader’s banks and other credit institutions is expected. In case of foreign individuals, the number of passport or identity should be indicated.
It is also anticipated, as far as issued checks are concerned covering payments of business transactions, regardless of the amount, the obligation to indicate:
- the issuer’s VAT number,
- each endorser’s VAT number and
- the last holder receiving it VAT number
In addition, the issuer’s VAT number of the check presented for payment of a debt to the state should be recorded, regardless of the amount. It is stated that, both the issuer and the recipient of the item bear the burden of proof for the transactions, and it is stated that confirmation of the details of the parties involved in a transaction may be executed from a database or file liable for transactions’ mapping, available from the General Secretariat for Information Systems of the Ministry of Finance, in which occasion, the tax secrecy is bent!
vii) Transfer Documents and Other Transaction Data
- The possibility of payroll editing is provided, rather than the issue of expenditure receipts for wage payments to employees (of both public and private sector), who are not obliged to display transactions from another source. A simplified payment procedure of salaries, wages and pensions is possible, through banks.
- There is also provision for transitional arrangements for a smooth transition to the new System of Transactions Mapping