The Independent Authority for Public Revenue (IAPR) imposed a record fine of over 5 million euros on a Greek company that had been appointed as the tax representative of an Italian business in Greece.

According to an audit by the Financial and Economic Crime Unit (YEDDE), the Italian company carried out fictitious intra-community exports to Italy and Bulgaria without paying the corresponding VAT, while using warehouses it maintained mainly at the port of Piraeus.

The “carousel” method

The scheme used is known as a carousel fraud: products are declared as intra-community supplies in order to avoid VAT, while in reality they are sold tax-free in the Greek market.

The role of the tax representative

The IAPR ruled that the Greek company, as the tax representative, bears joint liability for the violations committed by the Italian enterprise. The total amount imposed reached €5,016,092.15, broken down as follows:

• 2020: 1.119.596,97 €

• 2021: 615.092,57 €

• 2022: 3.281.402,62 €

The company’s claims

The Greek company argued before the Dispute Resolution Directorate (DRD) that it had been designated as a tax representative due to errors in the tax administration’s IT system, without having any real involvement in the transactions. It claimed that it:

• id not know the counterparties,

• was not involved in the transport of goods,

• did not collect money on behalf of the Italian company,

• only submitted periodic VAT returns.

The DRD’s decision

The DRD rejected these arguments and upheld the fine. It emphasized that the role of a tax representative in Greece is not merely formal but comes with substantive responsibilities, including filing tax returns and paying VAT.

According to Greek tax law:

• The tax representative obtains a VAT number on behalf of the foreign principal,

• Bears joint liability for every taxable transaction in Greece,

• May be personally charged with taxes and fines.

Conclusion

This case highlights once again that the role of a tax representative carries significant obligations and risks. Companies taking on this responsibility must be extremely cautious, as their liability goes far beyond mere formal representation.