HOW TO PROTECT YOURSELF FROM TAX SEIZURES
Compulsory measures and the Tax Administration
With overdue debts to the tax authorities exceeding 100 billion euros, the tax administration seems to have started a “fight” to reduce them, putting in place all the “weapons” that the law gives them (e.g. seizures, auctions of movable and immovable property, criminal prosecution against debtors).
What are the necessary measures for the unresolved debt?
For debts that are overdue and have not been settled, the Head of the department responsible for collection may do the following (article 9 of the K.E.D.E. -v. 4978/2022, A’190):
a) seizure of movable property and claims (e.g. deposits, rents, etc.), either in the hands of the debtor or in the hands of a third party,
(b) seizure of immovable property owned by the debtor.
Before taking the coercive measures
Before the enforcement measures are applied, the tax authority must send an individual notice to the debtor and the co-debtors for the payment of their overdue debts within 30 days. The coercive measures are not applicable if the debtor makes an arrangement (usually a fixed 24 instalment arrangement) within 30 days.
Attention! It is not necessary to send an individual notice in cases of seizure of money in bank accounts or money claims in the hands of the debtor or a third party.
How does a foreclosure affect my property?
From the day a copy of the report of the seizure of the property is served by a bailiff on the owner, the owner is deprived of the right to sell the property. However, the imposition of a seizure does not necessarily imply an auction of the property.
When will the IRS seek to issue an auction schedule?
After the seizure, and in case the debtor does not proceed with the settlement of his debts, an auction schedule is issued (from 40 days to 4 months after the date of the seizure and with the first auction date up to 5 months later). If the auction does not take place on the date set due to suspension or cancellation, a new auction schedule is issued, at the latest within the same year.
Is the Debtor at risk of criminal prosecution for non-payment of debts to the State and for what amount?
Yes, the debtor is at risk of criminal prosecution (an offence under Article 25 of Law 1882/1990) with a prison sentence ranging from 1 to 3 years, depending on the amount of the debt.
In particular, for debts to the State (including interest, surcharges and fines for late payment) exceeding € 100.0000 for a period of at least 4 months, the Head of the competent Service of the Tax Administration is obliged to submit a request for criminal prosecution to the Prosecutor of the District Court of the debtor’s headquarters. The above application shall be accompanied by a detailed list of debts.
Is the execution of the sentence imposed suspended?
It is suspended, but only if the debtor settles his debts and for as long as the terms of the settlement are respected, until full repayment.
What is the minimum amount of debt to the State for which no enforcement measures are taken?
The minimum amount for which no coercive measures are imposed (i.e. seizure of immovable property, seizure of movable property in the hands of the debtor, etc.) is €500, except for the measure of seizure in the hands of third parties.
Are wages and pensions exempt from garnishment?
As long as the total amount for wages or pensions does not exceed €1,000 per month, no confiscation is imposed. However, for an amount exceeding €1,000, confiscation for debts to the State is allowed for ½ of the excess amount of €1,000 and up to the amount of €1,500.
What is the minimum amount of a deposit at a credit institution that is unseizable?
Each debtor is entitled to an attachment, in a single deposit account and a single banking institution, up to the amount of €1,250 per month. To apply for the €1,250 attachment, an electronic request must be submitted, disclosing the individual and a single account. If there is an account in which a salary, pension or social security benefit is deposited, then only that account should be declared.
Is it possible to lift seizures in the hands of third parties?
Yes, it is possible to lift seizures in the following cases:
α) The amount for which the attachment was issued must have been paid or written off.
b) The debts must have been subject to a regulation program under Laws 4305/2014 & 4321/2015, provided that the conditions are met.
c) Be subject to the regulation of the Extrajudicial Mechanism (Law 4738/2020)
Avoiding enforcement measures, with the Extra-Judicial Mechanism
The Extrajudicial Mechanism (Law 4738/2020) with the final submission of the application, provides legal protection from the tax authorities and the social security funds to individuals, freelancers and businesses, until the completion of the procedure.
The practice shows that the procedure of the Extrajudicial, is a unique tool for the debtor with debts to the tax and social security funds, as it can offer debt cancellation and regulation up to 240 installments, while the fixed regulation offers only 24 installments!