Greece Puts 6 Billion Euros in Uncollectible Debts on Hold

Greece's Independent Authority for Public Revenue (AADE) is set to clear approximately 6 billion euros in long-standing debts that are considered uncollectible. This move, described as putting debts "in the fridge," aims to streamline the tax system by removing debts that have proven impossible to recover despite years of effort by tax collection mechanisms.

The majority of these suspended debts stem from bankrupt businesses or individuals who have passed away, leaving no substantial assets for recovery. This administrative step is part of a broader effort to manage the staggering total of 114.5 billion euros in overdue debts owed to the Greek tax authorities. Of this amount, 35.26 billion euros have already been classified as uncollectible and moved to special ledgers.

The AADE has established clear procedures for classifying debts as uncollectible, depending on the amount owed. For debts up to 300,000 euros, the decision rests with the head of the tax office or customs office. Larger sums, between 300,000 and 3 million euros, require a decision from the AADE's governor, while debts exceeding 3 million euros also need the governor's approval based on recommendations from the Collection Operations Unit.

Even if a debtor possesses some assets, a debt can still be deemed uncollectible if the total value of their real estate does not exceed 5% of the debt or 100,000 euros, and their movable property is valued at less than 30,000 euros. However, debts classified as uncollectible are not permanently erased. They are placed on hold for ten years from the end of the year they are registered, during which time their statute of limitations is automatically suspended. Debtors will not receive tax clearance certificates, and their bank accounts and safe deposit boxes remain subject to seizure if any assets are discovered later.