Penalties are being tightened for property owners who avoid declaring income from short-term rentals to the tax office, as well as for owners who have not declared their property on the AADE electronic platform.
In previous years, more than 20,000 properties were identified that used short-term rental platforms (Airbnb, etc.) that were not registered in the electronic registry. The head of AADE called on owners and managers to start declaring real estate and income for the two years 2018-2019, noting that they will all be identified and called upon to pay the taxes provided by the law and the corresponding fines. The tax administration is already “launching” new programs that will allow tracing intersections with data received from credit institutions, as well as from trading platforms. Unfair competition
At the same time, data from large rental platforms such as Airbnb has already been received, and control has been expanded to identify those who “forget” to declare income from other electronic platforms. Now the AADE auditors will be assisted by the steps of the Ministry of Tourism, and the financial police will be in charge of real estate control.
However, this turned out to be not enough, and the Greek tax office signed agreements with the three largest e-exchange platforms Airbnb, Booking.com and VRBO, which are part of the Expedia group. According to tax authorities, thousands of homeowners benefit from this business 100% without paying any taxes to the Greek state. This turn of events, in addition to damaging government revenues, has created serious problems for rental companies and hotel units that cannot cope with this phenomenon. Fundamentally, finance staff strives to ensure that short-term rentals do not create unfair competition for companies that operate legally and do not create side effects when looking for housing.
In this context and in order to reduce tax evasion in the first stage, the agreement signed by the director of AADE Georgios Pitsilis provides that in order for the owner or manager of real estate to register his property on the above platforms, he must enter a number on the platform for registering the property held in the AADE short-term rental register. Data that will be entered on the platform without a corresponding identification number will be automatically rejected by the system. Thus, the tax office will know exactly the number of leased objects and the income received by the owner – manager.
“This milestone of best practice allows us to track and improve taxpayer compliance while ensuring a level playing field for short-term rental platforms,” said AADE director.
For his part, Airbnb General Manager for Italy and Southeast Europe, Giacomo Trovato, said that “This agreement is great news for Airbnb hosts and will make it easier for more people in Greece to share their homes. We are committed to working with governments and authorities to create partnerships that help families and support responsible tourism. This agreement provides clarity and transparency for everyone working in the short-term rental business in Greece, said Anj Janssen of Booking.com.
What is provided
The agreement signed between AADE and three leading exchange platforms provides for:
The platforms will provide their respective websites with a clear and well-defined margin so that the property owner / manager can register the required property registration number or justified exception under Greek law. The platforms will inform about the already registered property about the obligation to provide their registration number in accordance with the Greek law, as well as about the risks of non-compliance. The Platforms agree that upon appropriate notification from AADE, they will delete all registrations that did not include an alleged property registration number or reasonable exclusion as defined by law. The agreed procedures will be reviewed annually starting June 2021. Fines from 5,000 to 20,000 euros
According to the current legislation, the fines that violators will have to pay will range from 5,000 to 20,000 euros and will relate to the following:
Lack of registration in the “Register of short-term real estate”. Failure to indicate the registration number in the “Register of short-term real estate” when placing “real estate” on digital platforms, as well as on any other means of promotion. Lack of identification number when placing real estate on digital platforms, as well as in any other means of promotion by “administrators” for whom there is no obligation to register in the “Register” of short-term real estate.
The penalty for each violation is EUR 5,000, which is doubled (EUR 10,000) for the second violation. For each subsequent violation, from the third onwards, during the same year, a fine is imposed four times the amount originally imposed, that is, 20,000 euros.