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EC takes Greece to court for failure to recover illegal tax exemptions

Wed, Feb 24 2010 15:30 CET

byThe Sofia Echo staff

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EC takes Greece to court for failure to recover illegal tax exemptions

Greece will be taken to court by the State aid Commission for its inability to recover illegal tax exemptions, the European Union's web-page said in a media statement on February 24 2010.

The European Commission will seek answers from Greece in the European Court of Justice on the basis of Article 108, a decision taken back in July 2008, which simply says that Greece must recover state aid illegally granted to hundreds of companies through illegal tax exemptions.

According to the report, Greece neither accounted for, nor recovered, any aid from the beneficiaries.

The Greek government is accused of allowing companies to illegally deduct as much as 35 per cent of profits in 2003 and 2004 from their tax base. Companies receiving such favourable treatment spanned the textile sector and basic metals, car manufacturing, energy production, mining, intensive agriculture and fishery, large international trading companies and specific tourism undertakings, the report said.

The "beneficiaries" of the scheme subsequently used the tax-exempt income to finance expenses such as "the purchase, construction and expansion of plants, buildings and equipment, the purchase of vehicles, relocation, leasing costs, studies, training and many others".

Accordingly, Greek firms were allowed to claim this benefit directly from the tax authorities because the aid scheme was part of the Greek tax system.

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