Thousands of Greek businesses flee to Bulgaria to avoid "tax avalanche:" media

Source:Xinhua Published: 2016/10/22 12:18:29

More than 15,000 Greeks have registered new companies in Bulgaria's tax offices in the first quarter of 2016, according to data provided by the Greek embassy in Sofia on Thursday.

On average, a dozen accounts opened in Bulgarian banks on a daily basis this year, according to the report published in Greek daily Vima (Tribune).

Despite warnings from the Greek Finance Ministry that tax evaders will face strict penalties should audits reveal inaccuracies, several small and medium-sized Greek enterprises have turned to the neighboring country to avoid the "tax avalanche" of recent years in Greece, representatives of the Greek market said.

According to embassy data, in 2015 the number of Greek companies registered in Bulgaria was 13,500, while in 2013 it was only 9,000.

In several cases, entrepreneurs relocated to Bulgaria and other countries with more favorable tax structures to stay afloat, experts such as Yorgos Kavathas, president of the Hellenic Confederation of Professionals, Craftsmen and Merchants, noted.

Tax on corporate profits in Greece stands at 29 percent, while in Bulgaria is 10 percent.

Faced with a wave of tax hikes since the start of the Greek debt crisis in 2009, recession-hit middle class professionals, low-income workers and pensioners are struggling to make ends meet.

After the latest round of pension reforms and taxation changes introduced this year, self-employed Greeks are allegedly currently asked to pay up to 80 percent of their monthly reported income for taxes and increased contributions to social security funds, according to their unions and accountants.

Addressing a gathering of self-employed professionals in northern Greece last week, Dimitris Tsakiris, head of Greece's Self-Employed Fund, argued that not paying contributions in Greece and turning to Bulgaria is a "non-patriotic stance."

Although tax avoidance has been pinpointed as a key factor behind the crisis, over taxation of recent years has been criticized as counterproductive to Greece's efforts to return to sustainable growth.

According to Finance Ministry figures, since the start of 2016 taxpayers' total debt has reached 9 billion euros (9.79 billion US dollars).

Greeks owed to security funds more than 30 billion euros in early 2016, according to recent reports, while banking system sources told Kathimerini (Daily) newspaper that total arrears of Greeks to banks exceed 100 billion euros.

Posted in: MARKETS

blog comments powered by Disqus