Taxes: obstructed international exchange of information 

23.08.2019 -  Taxes, European Social Fund, Municipal Association "Gemeindeverband Seniorenheim Altenmarkt": ACA publishes three reports

Bild für Vorlage 23.8.2019 - Copyright:

Today the Austrian Court of Audit (ACA) published three reports:

  • International Exchange of Information in Fiscal Matters 
  • European Social Fund: Subsidies for Schools and in the Area of Adult Education
  • Municipal Association "Gemeindeverband Seniorenheim Altenmarkt"

Increasing mobility and globalization render the international exchange of information in tax matters ever more important. National tax authorities often reach their limits since their investigative powers end at the state border. Upon request of Bruno Rossmann, Member of the National Council, the ACA carried out a special audit. Although the Federal Ministry of Finance attaches great importance to the international exchange of information in fiscal matters, the authorities are confronted with many obstacles. 

Numerous different legal bases render the enforcement of the relevant laws complicated – no uniform tax identification number in the EU or in Austria

Cross-border administrative assistance is carried out mainly with regard to direct taxes such as the income or corporate tax, indirect taxes such as the value added tax and also the execution of tax arrears. The numerous and different legal bases resulted in the fact that the enforcement of the relevant laws by the tax administration was complex and cumbersome. 

Since there is no uniform tax identification number at the EU level, it was difficult to identify and to clearly allocate taxable persons within the EU. Not even in Austria was there a uniform, unchangeable tax identification number. If the jurisdiction of the tax office changed, the tax number changed as well. 

Procedural delays impede the work of the authorities 

The reluctance to cooperate shown by other financial authorities, so-called stalling strategies, the pursuit of national self-interests and the related long duration of proceedings stood in the way of a successful EU wide cooperation. In Germany, for example, national rights of assent caused procedural delays.

Taxpayers in Germany, for example, have to give their consent if German financial authorities are to forward information to the Austrian financial authorities. The Audit Unit for Large Traders also pointed to some authorities’ reluctance to cooperate in terms of contributing to mutual assistance (in particular in Switzerland, Ireland) and to the problem of “stalling strategies” applied by some states (in particular the Netherlands, Ireland).

Furthermore, the ACA recommends to revise the agreement with Liechtenstein. Due to this bilateral agreement, Austria is receiving less information than other EU Member States, in which the EU agreement with Liechtenstein is applied. 

Austria replied to about 75% of the requests for mutual assistance made by other states within 90 days. In comparison, Austria received replies from other states only in 52% and 29% of the cases for indirect and direct taxes respectively within 90 days. In about 22% and 6% of the requests related to direct and indirect taxes respectively, Austria had to wait for as long as more than a year until it received a reply. The ACA considered a waiting period of more than a year for the processing of requests for mutual assistance as problematic and detrimental to a correct and timely clarification of tax-related matters.  

Shortage of personnel in the financial administration to perform statutory tasks

The restrictive staffing policy of the ministry resulted in a deterioration of the quality of performance. From the viewpoint of the ACA, the ministry ran the risk of not being able to sufficiently fulfil the statutory tasks via its subordinate agencies due to their tense staffing situation. The auditors of the ACA did not find it plausible that the ministry used the shortage of personnel as an argument although it had reduced its personnel for years despite the fact that the posts for full-time equivalents in tax and customs administration as well as the financial funds had not been exhausted. The ministry failed to carry out the announced assessment of personnel requirements for years and apparently discontinued its efforts. The ACA recommends to carry out a comprehensive national assessment of personnel requirements for the financial administration.

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International Exchange of Information in Fiscal Matters

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European Social Fund: Subsidies for Schools and in the Area of Adult Education

From February to June 2018, the ACA carried out an audit of the subsidies for schools and in the area of adult education in the framework of its programme “Employment Austria 2014-2020” financed from the European Social Fund and from national funds. The ACA assessed the contribution of ESF-related measures to national as well as to subordinate EU objectives, the reaching of target groups and the addressing of their problems, the efficiency and efficacy of the national framework conditions with regard to the attainment of objectives, the application of innovative approaches in the regular operations as well as the potential for enhancing the efficiency and effectiveness of the use of ESF funds. The audit was largely carried out at the Federal Ministry of Education, Science and Research and at the Federal Ministry of Labour, Social Affairs, Health and Consumer Protection. The audited period essentially spanned the years from 2014 through 2018.

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64 Seiten

Municipal Association “Gemeindeverband Seniorenheim Altenmarkt”

From July to September 2018, the ACA carried out an audit of the municipal association “Gemeindeverband Seniorenheim Altenmarkt” in Salzburg. The audit aimed at assessing in particular the organization and financial situation as well as selected procedures, the staff, quality assurance and compliance with other provisions regarding the nursing home of Altenmarkt.