Within days, Greek authorities have uncovered two major suspected tax evasion schemes linked to well-known chains with turnover in the millions of euros. The investigation involves the “Horiatiko” bakeries and “Pizza Fan” pizzerias, whose executives are suspected of failing to remit to the state the VAT paid by customers.
According to the cases under investigation, one scheme relied on the use of figurehead administrators, while the other involved recording paid sales as products given away for free.
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Greek police arrested the owner of the “Horiatiko” bakeries today, along with an accountant suspected of organizing the mechanism for avoiding payments owed. Greek public broadcaster ERT reported that more than 50 people have been arrested, while inspections have extended to hundreds of businesses.
Investigators suspect that individuals were listed in company documents as administrators even though they did not actually control the businesses. Meanwhile, the businesses continued operating, making sales and accumulating tax and social security liabilities.
When those liabilities went unpaid, the companies were left with the debts they had incurred, and operations were shifted to new companies. The state then sought payment from the people named in the documents, while those actually running the businesses remained hidden.
Initial estimates put the losses and unpaid liabilities at around 100 million euros. That figure also includes social security contributions and the owner’s other business activities beyond the bakery chain.
The “Pizza Fan” case involves a different method, with the initial suspected loss from unremitted VAT estimated at at least 25 million euros.
According to investigators, customers ordered pizzas and paid in cash, but the payments were not necessarily recorded as sales. A computer program allowed an order to be marked as “complimentary.”
As a result, although the product had been paid for, tax records showed it as having been given away for free. The sale was not declared, and the VAT included in the price was not passed on to the state. Investigators say this practice was applied to some orders paid for in cash.
“Pizza Fan” disputes this account of events. The company argues that its many offers, which included free products, may have caused confusion in calculating turnover and says it is willing to cooperate with the authorities.
Authorities are continuing to investigate both cases. In one, they are tracing debts left with the companies named in the documents; in the other, they are examining sales suspected of having been deleted or removed from the computer system.
The suspension of “Pizza Fan” service has increased uncertainty for the chain’s more than 2,500 employees. The company says it aims to reopen its stores as soon as possible and preserve jobs. The investigations into both cases will determine how much money the state has lost and who is responsible.
