Kathimerini Greece Newsroom
Greek tax authorities have launched a sweeping crackdown on thousands of businesses that have shifted their headquarters to Bulgaria, Romania and Cyprus while continuing to operate primarily in Greece. The inspections target companies that appear to maintain only a postal box abroad as a means of securing significantly lower tax rates.
More than 18,000 Greek businesses are officially registered in Bulgaria, about 8,500 in Romania, and roughly 1,500 in Cyprus. Those countries have corporate tax rates ranging from 10% to 16%, compared with 22% in Greece. Establishing a company abroad is also inexpensive and fast; in Bulgaria, it requires only a few days and a minimum capital of one euro, with tax registration often completed in less than 10 days.
According to the Independent Authority for Public Revenue (AADE), most of these companies remain active in Greece, despite their declared foreign headquarters. Many have no employees or physical offices in the countries where they are registered and show no substantial commercial activity there. Instead, they often maintain only a bank account and, in some cases, a postal locker.
Greek authorities have expanded cooperation with their counterparts in Bulgaria, Romania and Cyprus to map the real activity of companies that claim foreign tax residence. Bulgaria provides real-time information on newly registered companies linked to Greek nationals through a business registry equivalent to Greece’s General Commercial Registry.
Preliminary cross-checks show that income declared abroad frequently originates exclusively from transactions with Greek businesses. In most cases, there is no verifiable professional establishment, no staff and no decision-making presence outside Greece. Authorities describe these as arrangements lacking economic substance, created solely to reduce Greek tax obligations.
Under Greece’s general anti-abuse rule, tax officials may disregard the legal form of a foreign-registered entity when it lacks genuine economic purpose. In such cases, profits may be taxed in Greece regardless of where the company is registered.
The AADE is also reviewing cases in which Greek tax residents directly or indirectly control companies in low-tax jurisdictions without demonstrating real business operations. When such entities are found to have no actual activity, their profits are added to the income of the Greek shareholder, irrespective of the location where the earnings were reported.
