Greek high court mandates 5-year limitation for most tax cases

Greece’s highest administrative court, the Council on State (CoS), issued a landmark decision on Wednesday essentially mandating a five-year statute of limitation on audits, probes and investigations regarding tax cases and indictments in the country.

The only “loophole” left for the state, its services and the independent justice system is if tax authorities receive “supplementary information” regarding alleged tax evasion/avoidance for the five-year period prior to the expiration of the statute of limitation.

Only in such cases will an additional five years be allowed for more investigation, audit and subsequent prosecution.

Beyond the legal parameters of the ruling, the political impact was also severe, given that the current leftist-rightist coalition government had rode to power in 2015, in part, on a promise to extensively investigate, indict and collect hefty fines from convicted tax evaders detected on a handful of eponymous lists of Greek citizens with overseas bank accounts.

The now notorious “Lagarde list”, so named by local media after then French FinMin Christine Lagarde, who conveyed a file containing information on Greek depositors at an HSBC branch in Geneva to the George Papandreou government in October 2010, was one such very high-profile “cause célèbre” for the current Tsipras government. Another is the so-called “Borjan list”, which included nearly 11,000 bank accounts purportedly held by Greek citizens at an UBS branch in Switzerland. That file was given to Greek authorities by Norbert Walter Borjan, the finance minister of the federal state of North Rhine-Westphalia, while yet another political furor revolved around charges — usually launched by leftist SYRIZA when it was in the opposition — that various high-profile Greek citizens with ties to the then Samaras government were also listed in the “Panama Papers”.

The crux of the CoE’s decision is that successive extensions of deadlines to delay the expiration of the statute of limitation are unconstitutional. A majority of CoS justices argued that current digital technology and communication can detect transnational tax evasion much faster and effectively than in previous years.