By G. Palaitsakis
A veritable "cottage industry" of fake and "virtual" invoices, following revisions in the tax code dating to 2013, has reportedly led to losses for the Greek state ranging into the billions of euros.
The "black hole" in the tax code reportedly commenced when businesses and self-employed professionals were allowed to issue invoices from simple booklets, without any guarantee of an invoice's authenticity or restrictions on the number of invoices that could be issued. The ostensive simplification replaced the previous outdated system of validating each single invoice via a perforated serial number, but also an electronic system tracking each invoice.
According to the independent authority for public revenues, "scam artists" and embezzlers first set up "shell companies" and then searched the Internet for company names, addresses and tax codes. Thousands of invoices were then issued with the particulars of unsuspecting companies, showing the latter as purchasers of goods or services, often worth millions of euros.
As a result, the "phantom" companies reported huge turnovers to the tax bureau, without however, paying the corresponding corporate taxes or handing over commensurate VAT remittances.
The benefits from the wide-open "loophole" in Greece's tax bureaucracy included money laundering and achieving bank borrowing based on bogus turnover declared to the tax bureau, among others.