Greece intends to sign agreements with Bulgaria and Cyprus which will allow Athens to look into suspected tax evasion by Greek-owned companies registered in the two countries, Greek newspaper Kathimerini has reported.

The closer inspection of Greek-owned companies registered in Bulgaria and Cyprus will aim to find out whether they are active in Greece and only based abroad to take advantage of much lower corporate taxes, according to ekathimerini.com.

Sources have told Kathimerini that “most such companies in Bulgaria show zero turnover in the host country and do not employ anyone.”

The number of Greek companies relocating to Bulgaria has increased by an estimated 20-30 percent as new tax hikes took effect in Greece in June.

Discussions with Bulgarian and Cypriot officials have already begun, ekathimerini.com has said citing sources in Athens.

“The government hopes that the agreements can be signed by the end of September,” according to the Greek newspaper.

Greece agreed a deal in May to unlock a further EUR 10.3 B in loans from its international creditors in return for further spending cuts and tax increases demanded by the lenders. The government in Athens needed this fresh portion of cash to meet debt repayments due in July.