Greece has two months to respond to the European Commission after it claimed the country was breaking rules on value-added tax (VAT) in the private boat sector.
Along with Malta and Cyprus, Greece needs to explain its tax regime on yachts which the European Commission claimed this week is distorting competition.
Pierre Moscovici, Economic Commissioner said: “In order to achieve fair taxation we need to take action wherever necessary to combat VAT evasion.
“We cannot allow this type of favourable tax treatment granted to private boats, which also distorts competition in the maritime sector.
“Such practices violate EU law and must come to an end.”
The European Commission claims there is a reduced VAT base for the lease of yachts in Greece.
Malta, Cyprus and Greece all have guidelines which state the larger the boat is, the less the lease is estimated to take place in EU waters, a rule which greatly reduces the applicable VAT rate.