Twenty-four people were arrested in Greece after authorities discovered card-processing terminals (Abbreviation for “point of sale”. See Point-of-Sale terminal. More) linked to banks in Bulgaria. About 1,000 small businesses are suspected of using this system that allows them to evade tax by channeling funds to Bulgarian banks via Malta. Businesses include car rental services, beach bars and restaurants.
It is estimated that up to 32% of state revenue is lost to tax evasion, an issue that authorities have been actively trying to solve. In 2012, the government imposed a cap on cash payments of € 1,500. In June 2015, a series of strict capital control measures were introduced, including limiting Money in physical form such as banknotes and coins. More withdrawals to € 60 per day.
Aside circumventing capital controls, these businesses also don’t pay the required 24% of value-added tax and are able to withdraw up to € 2,000 per day via their Bulgarian account.
To read the original Reuters article, please click here.