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 >  Greek culture  >  Greek hotels in tax probe

Greek hotels face tax probe

- by Dabs Banner

Room owners in the Greek Islands have been warned to register their holiday lets or face a stiff fine as the Greek government tightens up on tax evasion.

The initiative has been launched by the Greek Tourism Confederation (SETE), as it tries to fight back against the rising rate of black market tourism accommodation in Greece.

SETE's president Andreas Andreadis has announced that a special company has been formed to carry out checks on short tourism accommodation and post the data to the Greek tax authorities.

Any regular visitor to the Greek Islands will know that rooms or 'domatia' in the local lingo are always available at bargain prices.

Room owners will often gather at ports when ferries are due to dock and try to entice arrivals to book a bed for a few nights.

Many will carry photographs of their rooms and offer cheap rates to tourists as they disembark from the ferries. Many visitors find the practice a colourful addition to their Greek island holiday.

But tax officials and tourism organisations are concerned that some owners have not registered their rooms and escape paying VAT on holiday accommodation.

Experts claim that around 40% of the holiday accommodation on offer across Greece is through 'domatia' where local people hire out rooms or small apartments to holiday visitors.

Figures from the Hellenic Chamber of Hotels estimate that the annual tax revenue lost from illegal letting of rooms could be costing the country €2 billion each year.

Recent Greek legislation requires hotel and room owners to display a special sticker in all rooms let out as tourism accommodation as proof of legitimate operation.

Room owners who don't comply can face a fine of €1,000 rising to €50,000 in some cases.

Tax evasion has always been a huge problem in Greece but, with the country reeling under its heavy international debt burden, officials say it has to stop.

Hotels on popular islands such as Mykonos and Santorini already pay only half the VAT rate as the government tries to promote tourism, the only sector of the Greek economy showing much sign of life these days.

Dozens of islands have been protected against the full VAT rate of 25% that applies for the rest of Greece in order to offset the high cost of transporting goods and to boost tourism development.

Cheaper room rates and lower food prices are certainly paying off so far as millions more tourists flock to the Greek Islands for their summer beach holidays.

A target of 25 million international tourist arrivals in Greece in 2015 is thought to be possible, according to SETE, following the publication of the latest statistics from the country's main airports.

According to latest figures Greece's biggest airports recorded more than 810,000 international arrivals by the end of March, up 180,000 or 29% on the first quarter of 2014.

Airports at Athens and Thessaloniki made the most impressive starts to the year with a 29.5% increase in visitor numbers through Athens while Thessaloniki Airport posted a 22.3% rise.

SETE says it is still too soon to draw firm conclusions but it's a very positive start to the Greek holiday summer season following last year's record number of holiday visitors.