Greek Council of State rules 20-year and 10-year tax audit limits unconstitutional, enforcing five-year cap

Supreme court strikes down extended tax audit windows

The Council of State, Greece's supreme administrative court, has ruled that statutory provisions permitting the state to impose tax burdens and penalties for tax evasion up to 20 years after the taxable event are unconstitutional. In the same judicial decision, the court invalidated a transitional 10-year limitation period previously applied to tax evasion investigations. The court held that the right of the public sector to assess and collect tax charges is subject to the standard five-year statute of limitations. Under this ruling, any state claim for taxes or financial penalties is extinguished once five years have elapsed. The ruling establishes a binding temporal limit on public revenue authorities and prevents long-range retrospective audits. The judgment resolves questions regarding the duration of state auditing authority under Greek tax law, confirming that taxpayers cannot be held liable indefinitely.

Judicial panel and the proportionality principle

The ruling was issued under decision number 1246/2026 by a seven-member bench of the Second Chamber of the Council of State. The judicial panel was chaired by Vice President Konstantinos Kousoulis, with State Councillor Maria Stamatopoulou serving as the judge-rapporteur. In evaluating the legal framework, the judges reviewed the statutory powers granted to the tax administration under legislation enacted in 2013. The court determined that the 20-year limitation period stipulated in Article 36 paragraph 3 of Law 4174/2013 violates the constitutional principle of proportionality. Consequently, tax authorities can no longer rely on that statutory provision to extend audit windows for two decades. The seven judges concluded that keeping individual tax files open to scrutiny for two decades places an excessive burden on citizens.

Retroactivity under the Greek Constitution

The Second Chamber also examined subsequent transitional provisions that had been introduced to govern older tax files. The court declared unconstitutional the transitional rule contained in Article 66 paragraph 27a section b of Law 4646/2019, which had maintained a 10-year limitation period for state tax claims in evasion matters. The magistrates ruled that this transitional measure directly violates Article 78 paragraphs 1 and 2 of the Greek Constitution. In its reasoning, the court noted that the 2019 transitional rule covered the 2013 tax year, a fiscal period prior to the year immediately preceding the publication of the 2019 statute. Under Article 78 of the Greek Constitution, tax rules and burdens cannot be retroactively applied to earlier tax years in this manner.

Enforcement of the five-year limitation period

Following the invalidation of both the 20-year and 10-year rules, the Council of State established that the five-year limitation period applies uniformly across the board. The court stated in its rationale that claims, assessments, and debts owed to the state are time-barred once the five-year threshold has passed, regardless of their legal origin. Tax authorities must now conduct investigations, finalize audit findings, and issue tax assessments within five years of the relevant tax year. State agencies are legally prohibited from levying evasion fines or assessing back taxes once that five-year window closes. The legal principle established by the court applies universally to public debt collection, ensuring that ancient tax liabilities cannot be revived by administrative authorities.