Council of State clarifies ten-year tax audit limits

The Council of State has clarified the conditions under which the Greek Tax Administration can extend the statute of limitations for tax audits from five to ten years. While the five-year period remains the general rule, the court ruled that the ten-year period applies if new, supplementary evidence emerges that could not have been objectively identified by tax authorities during the initial five years.

The decision stems from a case involving a hydraulic installation company that was assessed income tax for the 2005 fiscal year due to the use of fictitious and fake invoices. The company argued that its rights had expired after five years, claiming the tax authorities were already aware of the relevant information. However, the Council of State rejected this appeal, noting that the falsity of the invoices was only discovered through an SDOE audit report issued in June 2014, well after the standard five-year period had elapsed.

The ruling emphasizes that the extension depends on when the evidence of the violation was actually uncovered, rather than simply when an audit report was drafted. If a subsequent audit reveals previously unknown data that leads to the discovery of a violation, such findings constitute supplementary evidence allowing for a ten-year audit window.