With overdue tax debts in Greece soaring to €114.5 billion, nearly 4.8 million taxpayers listed as debtors, and only €5 billion currently under repayment arrangements, Greece’s Independent Authority for Public Revenue (AADE) is activating a new AI-driven model for the close monitoring of public debtors.

The PARE system has been integrated into the country’s tax collection system called ‘Eispraxis’ and functions as a mechanism for the continuous “scoring” of every taxpayer. Through the analysis of financial data, banking transactions, assets and overall tax behavior, AADE will gain a comprehensive picture of each debtor’s actual repayment capacity.

The acronym PARE stands for Payment Capacity, Attitude, Recency and Event, and is based on four key assessment pillars. Ironically the word PARE also sounds like a Greek work which means “to get” or “to take”.

The first pillar of the system concerns the debtor’s financial capacity- namely income, deposits, property holdings and overall financial profile. The second evaluates the taxpayer’s attitude toward their tax obligations, recording whether they are consistent with declarations and payments or whether they ignore notifications and audits.

The third factor relates to the age of the debts and the frequency of payment delays or failed settlement arrangements. The fourth takes into account specific economic or personal events that may have affected the debtor’s ability to repay obligations, such as loss of income, legal disputes or bankruptcy.

The rollout of the PARE system marks the latest phase in Greece’s broader transformation of its tax administration following the debt crisis years, during which weak tax collection and widespread arrears became a central issue for both public finances and Greece’s international creditors.

Over the past decade, AADE has evolved into one of the country’s most aggressively digitized state institutions, increasingly relying on algorithmic risk analysis, real-time financial monitoring and automated enforcement tools. The shift mirrors a wider European and OECD trend toward “predictive compliance” models that use behavioral and financial data to identify taxpayers considered at higher risk of default.

The pressure to improve collections remains significant. Greece’s overdue tax debt has climbed to €114.5 billion, even as tax compliance in some areas has improved substantially. According to European Commission data, Greece has sharply reduced its VAT gap (the difference between expected and collected VAT revenues) over recent years, although it still remains above the EU average.

Critics, however, warn that the expansion of automated monitoring and electronic seizures raises questions about proportionality, transparency and the balance between enforcement and taxpayer protection, particularly at a time when many households and small businesses continue to face high living costs, elevated borrowing expenses and lingering post-crisis financial vulnerabilities.

Debtor Profiles

Based on the profile generated, AADE will direct debtors toward specific settlement solutions, either through standard repayment schemes or through the out-of-court debt settlement mechanism.

However, for those who reject or ignore compliance proposals, the next step will be the activation of enforced collection measures, including electronic seizures of bank accounts and assets.

At the same time, the tax administration is investing in business intelligence and data analysis tools, developing predictive models designed to identify debtors with a high probability of defaulting on payments at an early stage.

This framework also includes the expansion of electronic third-party garnishment orders, as well as strengthened cross-checking with foreign tax authorities through mechanisms of international administrative cooperation.

AADE’s operational plan for 2026 foresees the collection of at least €3.2 billion from old overdue debts, of which €1.5 billion is expected to come from VAT liabilities.

Meanwhile, the Collection Operations Unit (EMEIS) aims to recover €850 million from large debtors and targeted enforcement actions, while the collection target for newly overdue debts is being raised to 35%.

The plans also include mass notifications to debtors to maintain repayment arrangements, reminders regarding older debts, and pilot “behavioral” interventions with the assistance of OECD experts aimed at increasing tax compliance.