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Memorandum of Understanding on Specific Economic Policy Conditionality(xi) tax returns (Articles 18 and 20), (xii) tax audit-power of the administration (Article23), (xiii) indirect determination method (Article 27), (xiv) results of the tax audits(Article 28), (xv) tax assessments and determination methods (Article 30, 33 and 37),(xvi) competence for tax collection (Article 40), (xvii) tax payment (Article 41), (xviii)Tax refund (Article 42), (xix) new instalment scheme (Article 43 ), (xx) conservativemeasures (Article 46), (xxi) individual notice (Article 47), (xxii) third party liabilities(Article 54), (xxiii) quasi-judicial action (Article 63), and (xxiii) tax audit certificate(Article 65 A) (April 2014).2. Adopt all secondary legislation necessary to support the full implementation of the ITC,after consulting EC/ECB/IMF staff inter alia upon (i) service contracts (article 12), (ii)scope of financial market transactions covered by capital gains rules and definition ofprofessional trade (Article 21), (iii) rules on capital gains for financial and real estatetransactions (Articles 41 and 42 in particular), (iv) procedures for inter-group dividends(Article 48) and (v) payment processes and procedures for PIT and CIT, includingprocedure and forms for exemption of inter-group dividends (Article 48), PAYEprocedure and process (Article 60 ITC), withholding tax (rates, terms and payment,Article 64 ITC), PIT and CIT procedures (Articles 67, 68 and 69 ITC) (April 2014).3. Continue the TPC and ITC working groups within SGPR by:i. Updating and assessing the Implementation plan for period up to December 2014(May 2014).ii.iii.iv.Issuing and publishing of implementation instruments, including secondarylegislation, circulars and administrative guidelines and also preparing and issuingall required tax compliance documents and forms to ensure the properimplementation of the TPC and ITC (June 2014).Making the necessary preparations by July 2014 to bring the inheritance and gifttaxes under the scope of TPC (Article 66, #29) (July 2014).Publishing electronically a consolidated version of primary tax legislation,including ITC and TPC, and will update the publication regularly as appropriate(June 2014).4. Ensure the revenue administration’s capabilities to conduct timely audits at taxpayer’spremises by developing fast-track procedures for authorization of entry and searchrequests by the administration, particularly in fraud cases, and in consultation with theEC/ECB/IMF change administrative procedures or amend legislation as necessary toachieve this (April 2014).5. Amend the TPC to allow designated tax collection officials to enter tax debtors businesspremises in line with the principles described in Article 25, #3, of the TPC in order toverify the tax debtors asset and liquidity position and to identify assets that can be subjectto enforcement measures (April 2014).6. Fines in TPC: (i) Ensure that until end-2014 the current practice of levying multiplepenalties will be limited to a fixed cap. Further ensure by end-September 2014 that,effective January 1, 2015, violations involving non-issuance or incorrect issuance of retailreceipts will be treated as a single but serious procedural violation for VAT, whereas nothaving a reliable accounting system will remain a single violation for direct taxes. Incooperation with technical assistance—prepare the tax administration to apply modernauditing techniques to counter tax evasion and (ii) amend TPC as necessary to ensure thatno fines should be imposed on amended VAT and employer withholding tax returns ifthey are spontaneously submitted under normal circumstances (April 2014).7. Review the existing legislation for the procedures for withholding agents (June 2014) andinsert into TPC as general procedural rules for withholding agents (September 2014).156
Memorandum of Understanding on Specific Economic Policy Conditionality8. Based upon a detailed implementation plan, the Finance Ministry and Ministry of Justice,will conduct a comprehensive review of tax-relevant legislation, including Administrativeand Civil Procedure Law, to examine conflicts with or relationships to the TPC and mapthese legislative acts to the TPC (May 2014).9. To improve the legal framework for tax fraud and evasion:i. The Authorities carry out a comprehensive review of tax fraud and evasionprovisions from minor offenses to tax crimes in current legislation, including theSpecial Penal Law 2523/1997 (June 2014).ii.As a follow up of the above mentioned review, the authorities amend the specialpenal law 2523/1997 and other legislation as necessary, so as to (i) broaden thedefinition of tax fraud and evasion to all taxes (ii) characterize different offensesand sanctions (iii) clarify the link between criminal and administrative rulesregarding tax matters, (iv) clarify the rules for prosecutions of tax debtors andrepeal the systematic and compulsory referral of debts smaller than €60,000. Theamendments do not reduce the scope and sanctions of tax crimes that are currentlypredicate offenses to money laundering. Following amendments to the criminal lawconcerning tax evasion and fraud, repeal article 55 paragraphs 1 and 2 of the TPC toensure consistency with the Criminal law in defining tax fraud and evasion(September 2014).10. Adopt proposals for Accounting Rules, including further simplification and improvementof the Code of Tax Recording of Transactions (formerly code of books and records) andcorresponding amendments required in the commercial and accounting legislation in orderto come into effect by 1/1/2015, as well as adopting appropriate transitional rules forconsistency with ITC and TPC (May 2014).11. Establish a working group (May 2014) and appoint a project manager within SGPR tosteer the implementation of the new Accounting Rules:i. Set-up and initial roadmap (June 2014).ii.iii.Provide the necessary secondary legislation, review and replace existing requiredtax compliance documents and tax returns and forms after consultation with thestakeholders, and fully resolve any remaining conflicts or consistency problemswith the ITC and TPC (June 2014).Adopt action plan to ensure appropriate preparations by businesses, especiallySMEs by ((June 2014).12. Adopt legislation to modernise the Code of Public Revenues (KEDE):i. Undertake a mapping and modernization of the KEDE, to identify conflicts with theITC and TPC, and amend any conflicting provisions to ensure compatibility (June2014).ii.Conduct a comprehensive review of KEDE to align it with the international bestpractice (June 2014).iii. An initial draft of the law must be made available (September 2014).iv. The law must then be legislated (October 2014).13. Modernize the revenue administration’s procedure for enforced sale of assets at publicauctions to ensure that, inter alia, the auction is announced well in advance in publicmedia and that bids exceeding the cost of the auction will be accepted irrespective of theamount of debt owed by the owner of the asset and must be equal to at least one-third ofthe objective value in case of real estate, unless a lower minimum bid has been defined.Debt amounts that have not been covered by the proceeds from the auction shall remainenforceable (April 2014).157
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OUTLINE OF THE REPORTEXECUTIVE SUMM
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LIST OF GRAPHSGraph 1. Economic cli
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ACKNOWLEDGEMENTSThe report was prep
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European CommissionThe Economic Adj
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1. INTRODUCTION1. INTRODUCTION1. Th
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2. MACROECONOMIC AND FINANCIAL DEVE
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2. Macroeconomic and financial deve
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Chart 3Graph 2.3. Exports of goods
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European CommissionThe Second Econo
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Chart 18Graph 13.1. Distance to Fro
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4. DEBT SUSTAINABILITY ANALYSIS AND
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4. Debt sustainability analysis and
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Table 12. List of Milestones to be
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OCCASIONAL PAPERSOccasional Papers
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No. 46No. 47No. 48No. 49The Western
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No. 80 2011 Pre-accession Economic
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No. 119No. 120No. 121No. 122Possibl
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No. 1582013 Economic and Fiscal Pro
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