Reports that multinational apparel retailer H&M has allegedly engaged in systematic tax-evasion in Greece sent shock waves through the domestic market, with experts expressing surprise over the prospect of a such a major company intentionally failing to relay cash register receipts to the tax bureau.

The company has yet to issue an official statement regarding the furor, with only press “leaks” disseminated as of Friday morning.

Additionally, market sources express discontent that H&M has assigned its general representation in Greece to residents of Sweden, as indicated in an announcement by the company posted on the General Commercial Registry (GEMI) on May 1, 2024.

The Independent Authority for Public Revenue (AADE) ordered the two-day closure of four H&M stores in Greece as of June 20. This action follows a similar incident last week when a “high street” H&M outlet in downtown Athens was ordered temporarily shut. The reason for the closures is that the stores were reportedly issuing receipts to customers, but the latter were not being transmitting to the AADE online system.

During an ongoing nationwide audit, AADE inspectors identified significant discrepancies at the southern Athens Glyfada branch, where between Jan. 24 and June 24, 33,800 receipts worth more than 835,000 euros, plus 201,000 euros in VAT remitttances, were not reported. As a result, the Glyfada store was temporarily closed, and a fine of 101,500 euros was levied.

In addition to the Athens outlet, the Kalamata branch in the southern Peloponnese was shut down from December 2023 to June 2024 for similar offenses, involving 12,600 unreported receipts valued at 263,000 euros, plus 63,000 euros in VAT. This infraction led to a 32,000-euro fine for H&M.

Further fines were imposed on H&M stores in Volos, located in central Greece, and on the island of Rhodes in the Aegean Sea. These penalties amounted to 281,000 euros and 15,000 euros respectively, for analogous violations.

AADE auditors have initiated a thorough review of H&M’s financial records to assess the company’s overall tax compliance. The multinational clothing retailer launched its first Greek store in 2007 in central Athens and currently operates more than 35 stores across 14 cities in Greece.

The Sweden-based multinational clothing company focuses on fast-fashion clothing and as of 23 June 2022, H&M Group operated in 75 geographical markets with 4,801 stores under the various company brands.

H&M has a strong presence in Greece with 36 points of sale and over 1,000 employees (as of 2022). For the financial year 2022 (the latest available data), it reported a turnover of 182.8 million euros, marking a 49.43% increase compared to 2021. At the same time, it recorded profits (after taxes) of 3.75 million euros, compared to losses of 6.63 million euros in 2021.

Market sources believe these illicit practices by a large multinational business cast a serious shadow on the image of Greece as a modern European state, as it gives the impression of a “banana republic” where a large corporation is not being held accountable for its actions and enjoys a different set of standards compared to every Greek citizen.

“These are tax violations that amount to a scandal as they provoke public sentiment,” market sources say. Violations that make ordinary people wonder if these giant companies, as they are commonly called, view Greece not as a modern European state where laws are enforced but as a… “banana republic.”

A country where they can do whatever they want without being accountable to anyone. They can disregard laws and emerge unscathed, without anyone batting an eye, the same sources said.