Last year, tax evasion in Greece amounted to more than €4 billion. Over 20% of economic output is in the shadow economy. Tax audits using AI will begin this year, and many taxpayers face having their accounts seized. A new insolvency procedure will end criminal prosecution.
Tax evasion exceeded 4 billion in Greece!
The authorities said that tax auditors referred many cases to the investigative authorities between January and October 2025. A total of 1,348 cases were referred, 415 of which involved confirmed tax evasion and will also be investigated for money laundering.
The remaining 933 cases concern outstanding claims against the state and require closer examination. Tax officials estimate the uncovered tax evasion at around 4.1 billion euros.
The anti-money laundering authority has also sent suspicious transactions to the tax administration. In total, this anti-money laundering agency has forwarded 101 particularly serious suspected cases to the tax auditors.
These cases led to audit assignments with confirmed claims of around €63.37 million. Hundreds of taxpayers and companies are now facing fines and criminal investigations.
The government is tightening controls and imposing harsher penalties to close the loopholes in the system. The aim is to better protect honest taxpayers – at least that is the plan.
- 1,348 cases forwarded (Jan–Oct 2025)
- 415 cases with confirmed tax evasion
- 933 cases with outstanding government debts to be investigated
- Confirmed tax evasion: approx. 4.1 billion euros
- 101 serious money laundering cases referred to the tax authorities
- Confirmed claims from these cases: approx. €63.37 million
- More audits and better data exchange between authorities
- Higher fines and criminal prosecution of those involved
- The goal remains: to deter offenders and achieve greater tax fairness
Greece’s shadow economy: 50 billion euros evade the tax authorities
In Greece, the informal economy is estimated to be worth a whopping €45–50 billion in unreported income. That accounts for roughly one in five euros of economic output and mostly escapes the attention of the tax authorities.
Despite digitalisation and numerous measures, Greece has not really got to grips with the problem. According to current analyses, the shadow sector accounts for around 20.9% of gross domestic product.
This puts the country well above the EU average of 17.6%. Italy and Poland have similar figures, while countries such as Germany and Ireland are much lower.
The shadow economy ranges from small cash payments to babysitters to serious crimes such as money laundering. It also includes unreported tips in the catering industry and illegal trade routes.
Such activities damage the tax base and result in a noticeable loss of revenue for the state every year. From a financial point of view, this means that money that could be spent on social benefits or larger expenditure items is missing.
This corresponds, for example, to two payments of a heating subsidy or an aid package worth billions. Significant wage increases in the public sector would also be possible with the lost taxes.
Studies come to different conclusions about how big the problem really is. Some research even claims that the proportion is even higher and that the whole thing is much more systemic.
Reforms and stricter controls have curbed the problem somewhat, but the informal sector remains large. It almost seems as if people have become accustomed to the fact that part of the economy operates in secret.
Measures to curb this problem focus not only on control, but also on incentives for legal businesses. Digital payments are being promoted, audits tightened and tax regulations for small businesses simplified.
In the long term, a combination of technology, efficient administration and credible enforcement is needed. Otherwise, the shadow sector is unlikely to shrink.
Key points at a glance:
- Scope: €45–50 billion, around 20–36% of GDP depending on the estimate.
- Consequences: Significant loss of revenue for social benefits and wages.
- Forms: From small cash-based transactions to criminal networks.
- Approaches: Digitalisation, controls, incentive systems for legal reporting.
AADE: How AI will change tax controls in 2026
From 2026, the tax authority will rely even more heavily on digital tools and artificial intelligence. It wants to track transactions almost in real time in order to detect and prevent tax evasion more quickly.
Every day, algorithms evaluate company data. They look for patterns that indicate unusual or risky transactions.
If the system detects something suspicious, it immediately suggests measures to be taken. This allows audits to be launched in a more targeted and rapid manner.
Electronic invoices and digital proof of shipment will become mandatory. This will increase the transparency of cash flows and close loopholes that have previously been used to conceal income.
This will give the authorities a much more accurate picture of income and expenditure. A new data analysis system works like a radar for suspicious activity.
It combines transaction data, reports and external sources. The system prioritises risks so that scarce audit resources are allocated where they are most effective.
CRM and case management tools (CRM/ERM) are being upgraded. They link processes, remind users of deadlines, document decisions and facilitate collaboration between departments.
A digital register is being created for real estate, giving each property a complete identity. Information on use, income and ownership is systematically recorded.
This makes it easier to find unreported rental income or incorrectly declared properties. The authority is also working on clear rules for cryptocurrencies.
A specialist group is currently developing rules, reporting requirements and tax rates that are compatible with EU law. The aim is to provide greater legal certainty for investors and better monitoring of crypto transactions.
Artificial intelligence is also being used in customer service. Chatbots and automated processes are designed to answer simple queries more quickly.
This reduces the workload for employees and shortens waiting times for routine questions. Industries with high cash turnover are being included in special digital registers.
The aim is to close grey areas where amounts have previously been difficult to track. Targeted comparisons increase the hit rate during audits.
Data protection and transparency remain important issues. Systems work with anonymised and secure data, and access rights are strictly regulated.
The authority also communicates how analyses work in order to build trust. Practical implications for businesses:
- More mandatory information and digital documents.
- Faster and more targeted audits.
- Higher degree of automation for reports.
- Greater responsibility for correct electronic archiving.
Risks and challenges:
- Technical integration of old systems.
- Ensuring data quality.
- Training and further education of staff in the use of AI.
- Preservation of the rule of law and data protection.
Over 681,000 taxpayers are now in the ‘red zone’ – at risk of seizure
Outstanding government debt has now reached €112.5 billion. More than 681,000 taxpayers are considered to be at acute risk because they are facing imminent account seizures or even forced sales.
This group is the focus of the tax authorities and will be specifically audited in the next phase. Many debtors are unable to make their payments on time.
Around 3.9 million tax numbers have outstanding debts. Around 2.31 million of these are subject to enforcement measures.
Already, 1.63 million people have had their assets seized or frozen. The remaining 681,302 people are on the verge of having their assets seized.
Only a small portion of the total liabilities has been settled. Of the €112.5 billion, only around €3.3 billion is covered by some kind of instalment agreement or similar arrangement.
The standard arrangement with a maximum of 24 instalments often does not work because the conditions are strict and many debtors lose them again. Payment discipline varies considerably.
A large proportion pay certain taxes on time: 82% for VAT revenue, 74% of private individuals for income tax and 89.3% of companies overall.
However, the remaining percentages add up to a huge debt burden that continues to grow month after month. The tax authority plans to send reminders to at-risk debtors in the coming days.
Those affected will be given the opportunity to settle their debts or apply for an adjustment. If they do not respond, enforcement measures will be taken in stages, depending on the amount of the debt:
- Up to £50: no enforcement measures; amounts will be offset against tax refunds.
- Between £50 and £500: seizures ‘against third parties’ become possible – for example, rent payments, subsidies or grants.
- Larger amounts: account freezes, account seizures and, in extreme cases, forced sales of real estate.
The escalation of measures is intended to speed up the collection of outstanding taxes. The authorities will first tackle the largest and most easily enforceable claims.
This increases the pressure on individuals and companies who are unable to pay or do not have a viable instalment agreement. In the short term, many of those affected can expect warning letters.
Anyone who needs a payment agreement should react quickly. For smaller claims, there are often automatic offsets against refunds.
For medium and high claims, there is a risk of concrete interventions in accounts and assets. One can only hope that a solution will be found for many before things get really serious.
‘Second chance’ after insolvency: end of criminal prosecution for tax debts and social security contributions
The new regulation brings real relief for entrepreneurs and self-employed persons who have had to close their businesses due to excessive debts.
As soon as the insolvency court makes a decision or the debtor is entered in the electronic register, criminal proceedings for tax and social security arrears are suspended.
The law relieves those affected of the pressure of having to answer for unpaid taxes or late social security contributions.
Those who successfully complete the insolvency proceedings and are legally released from their remaining debts also lose the criminal charges – even the entries in the criminal record then disappear.
At the same time, there is a support programme.
You can get a voucher to obtain professional advice.
These experts help with debt reduction, reorientation and building a new economic basis.
The goal: to enable those affected to start working again without the stigma of old debts constantly hanging over them.
Politicians no longer want to respond to economic hardship with criminal proceedings.
When criminal prosecution is suspended and later dropped completely, the fear of consequences diminishes.
This should lead to more people openly going through insolvency proceedings and seeking solutions instead of hiding their debts.
The regulation covers various cases, including:
- Unpaid tax debts to the tax office.
- Arrears in social security contributions, for example for pensions or health insurance.
- Proceedings that are stopped during the ongoing insolvency process.
What does this mean in concrete terms for those affected?
- Less legal stress: Criminal proceedings are automatically suspended after a decision or registration.
- Rehabilitation: With effective debt relief, the criminal consequences disappear permanently.
- Getting help: vouchers finance counselling, coaching and support for a fresh start.
How long does the whole process take?
The procedure often takes between one and three years, depending on its complexity and course.
During this time, the right to support remains in place and no one needs to fear that criminal proceedings will simply continue.
Now, government agencies and authorities must implement the new procedures.
This includes automatically stopping proceedings after registration, deleting entries after successful discharge and managing vouchers.
This is intended to reduce uncertainty and make it easier to return to economic life.
The measure has two important effects for society.
On the one hand, failure is less stigmatised, and on the other hand, there is a greater willingness to deal openly with insolvency – which may even strengthen economic stability.
The reform is aimed at small business owners and individuals who have got into difficulties due to excessive debt.
Advantages at a glance:
- Immediate suspension of criminal prosecution in the event of insolvency.
- Final expungement of criminal charges after successful debt relief.
- Funded advice for a fresh start.
- Less stigma due to old debts.
Clear procedures and genuine access to advisory services are needed for implementation.
Those affected should find out early on what rights and assistance are available – then they can really take advantage of the new regulations.
