Greek banks to withhold VAT receipts
- Aug 2, 2015 | Richard Asquith
Greek banks are being instructed by the government to withhold the VAT element of payments between businesses. The process, known as split payments, interrupts the stage-by-stage payments in the production chain underpinning the EU VAT regime.
The new rules apply to payments in the retail sector above €1,500, or €3,000 in the wholesale sectors.
The move is being introduced to help prevent extensive VAT fraud in the Greek economy, which is under additional pressure to improve revenues whilst attempting to negotiated a third bail out with its creditors. Greek VAT is currently 23%.
Italy recently introduced the use of the split payments in its public sector. But had to withdraw proposals for use of the reverse charge in the retail sector following an EU judgment.