With decision no. 1738/2017 of the Plenary Session of the Council of State the continuous extensions of tax claims limitation were declared unconstitutional.
From 2010 onwards, governments voted for the one-year extension of the five-year limitation period for government tax claims. Due to delays in the checking of these cases, including the much-talked-about lists of depositors abroad, an extension period was voted every time.
However, a definite cancellation of the collection of already established fines and debts, as well as a serious limitation for the time extension of the administration's control over the taxpayers arose from the final judgment of the Council of State under no. 1738/2017 of its plenary session.
It has been judged that continuous limitation periods are in breach of the constitutional principles of proportionality, the rule of law and the principle of legal certainty, as well as of Article 78 of the Constitution on taxation.
Regarding the thinking behind the decision, the Council states in particular that: "the limitation period must be of a reasonable duration, in view of the fact that the control process is now easier both because of modern electronic control methods and because many data related to all economic activity, taxpayers (e.g. income from salaried services, interest on deposits, etc.) are introduced into the system of electronic submission of income tax returns without the need for any action on the part of taxpayers, thus, it is not justified to set a long limitation period beyond the time limits set by the pre-existing provisions at a time when the tax administration did not have those tools."
Additionally: "The speed of developments in all sectors, including the business and the economic sector, requires the speed of the taxpayer's duty to clear tax liabilities in order to plan their economic activity to know their debts in a timely and regular manner and relatively short periods of time because the accumulation of long-term debts due to the lack of extensions of control over many years and the issuing of related imputations and the simultaneous payment of such debts can create serious financial problems for natural and legal persons."
It was also envisaged to change the time of the limitation period “with the provision of extension being possible only under the conditions of Article 78 (2) of the Constitution, that is to say, by an order made no later than the year following the year in which the tax liability was incurred.”
Consequently, the period of limitation must respect the criterion of reasonable time, that is to say, that it is compatible with the principle of proportionality, whereas its amendment by the provision of prolongation is possible only within the understanding of Article 78 (2) of the Constitution and by a provision adopted at the latest the year following the date of the tax liability.
The Court has therefore held that the prolongation of paragraphs is unconstitutional and that a provision of law extending the limitation period for tax claims, the commencement of the limitation period prior to the publication of that law, is invalid as contrary to the principle of rule of law principle of legal certainty.
With this decision, the Council of State essentially leads the position of thousands of outstanding tax cases and fails to collect thousands of fines. In addition, the investigation of the overt affirmations of the lists of Greek depositors overseas, with reference to uses which have been time-barred, is also forfeited.
Finally, the 10-year limitation period of Law 2238/94 continues to exist when new data, i.e. unrecorded income, arises. Therefore, if someone has a mismatch declared between 2000-2005, then public claims have been time-barred, while claims for 2006 are due on 31-12-2017.
