VAT-Focused Changes under Law 5301/2026 – Adjusted Penalty Framework and Compliance Enhancements

Summary

• Reduced and more proportionate VAT penalties, including €100 fines for nil VAT returns and retroactive application from 19 April 2024.
• Abolition of €100 penalties for VAT special scheme returns (OSS/IOSS-type regimes), easing compliance burden.
• Broader compliance and control environment strengthened, indirectly impacting VAT governance, audits, and data consistency.

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Article (VAT-focused)

Law 5301/2026 introduces targeted but impactful adjustments to the Greek VAT compliance framework, primarily through amendments to administrative penalties and enforcement mechanisms under the Code of Tax Procedure. While the law is broader in scope, the most relevant VAT implications arise from the recalibration of penalties, improved proportionality, and indirect strengthening of audit and data cross-checking capabilities.

1. Recalibration of VAT Penalties: Proportionality and Relief

A central VAT-related change concerns penalties for late or non-submission of VAT returns. For taxpayers maintaining single-entry or double-entry books, the fine is now reduced to €100 where no VAT is payable, replacing the previous €250 or €500 thresholds.

This reflects a clear policy shift toward proportionality, distinguishing between formal non-compliance and cases involving actual tax risk. Where a VAT return results in tax payable, the higher penalty levels continue to apply, preserving deterrence for revenue-impacting breaches.

Importantly, this measure applies retroactively to violations from 19 April 2024 onwards, requiring tax authorities to:

• Cancel or amend previously issued penalty assessments;
• Offset or refund amounts already paid where appropriate.

From a practical perspective, this creates an opportunity for taxpayers to review historical VAT penalty positions and potentially recover overpaid amounts.

2. Removal of Penalties for VAT Special Schemes

Another significant development is the abolition of the €100 penalty for VAT returns submitted under the special schemes covered by Articles 47a–47d of the Greek VAT Code (aligned with EU regimes such as OSS/IOSS).

This change also applies retroactively from 19 April 2024, effectively eliminating minor administrative penalties in cross-border e-commerce and digital VAT reporting contexts.

The measure is particularly relevant for:

• Businesses using the Union OSS scheme for intra-EU B2C supplies;
• Non-Union OSS or Import OSS (IOSS) operators;
• Digital platforms and marketplaces facilitating VAT reporting obligations.

By removing low-value penalties, Greece aligns with a broader EU trend aimed at facilitating compliance in high-volume, transaction-based reporting systems, where minor delays or corrections are operationally frequent but not necessarily indicative of tax risk.

3. Indirect VAT Implications of Enhanced Compliance Framework

Although not VAT-specific, several broader elements of Law 5301/2026 reinforce the VAT control environment.

First, the strengthening of audit mechanisms and administrative procedures under the Tax Procedure Code increases the likelihood of:

• More targeted VAT audits;
• Greater use of data analytics and cross-checking;
• Enhanced scrutiny of inconsistencies across filings.

Second, the introduction of the Property Ownership and Management Register (M.I.D.A.) contributes to improved data integrity and cross-referencing. While primarily linked to real estate taxation (e.g., ENFIA), it indirectly benefits VAT authorities by:

• Supporting verification of property-related transactions (e.g., leasing, development activities);
• Enhancing traceability of taxable persons and assets.

Finally, although outside VAT scope per se, the broader digitalization and transparency agenda underpinning the law aligns with EU-wide developments (including ViDA), signaling a continued move toward:

• Real-time or near real-time reporting ecosystems;
• Increased reliance on structured data;
• Stronger linkage between different tax data sources.

4. Practical Considerations for Businesses

From a VAT governance perspective, businesses operating in Greece should:

• Reassess historical VAT penalties (post-19 April 2024) to identify refund or offset opportunities;
• Update internal compliance frameworks to reflect the reduced penalty exposure for nil returns;
• Ensure continued discipline for returns with VAT payable, where higher penalties remain;
• Review OSS/IOSS compliance processes, benefiting from the elimination of minor penalties but maintaining accuracy and timeliness;
• Prepare for a more data-driven audit environment, where inconsistencies across registers and filings may trigger VAT reviews.

Conclusion

While Law 5301/2026 does not fundamentally alter the VAT system, it introduces meaningful refinements to the penalty regime and compliance landscape. The shift toward proportional penalties, combined with the removal of administrative fines in special schemes, reduces friction for compliant businesses while maintaining enforcement where fiscal risk arises. At the same time, enhanced data integration and audit capabilities signal a continued evolution toward a more digital, transparent, and controlled VAT environment in Greece.

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