Tax fraud and fraud in relation to fiscal duties leads to distortions of competition and harms both the economy and every individual who, as a result, must pay more taxes. The aim of combating fraud is to secure and strengthen the economic location of Austria as well as to create new jobs. Tax and social welfare fraud endanger such ambitions, since honest business people are thereby hugely disadvantaged. The Austrian Federal Ministry of Finance is establishing specific measures aimed at protecting the domestic economy against this threat. Combating fraud means more justice, more equality of opportunity and more protection for the domestic economy. In combating fraud, the primary concern of the Federal Ministry of Finance is not to burden the economy through increased controls, but to establish fair conditions for all participants in economic life.
Through the Anti-Fraud Act 2010, the possibilities for combating fiscal fraud were significantly expanded by way of § 12 AVOG (Fiscal Administration Act - financial police). By standardizing the powers of the financial police (right of entry upon property, right to arrest, right to establish a person’s identity), the legislator is intending to visibly increase the preventive effect of tax supervision and other control measures. Powers which were previously granted primarily in the realm of regulatory policy or to the executive bodies of the fiscal authorities in the realm of customs, are now also available, to the broadest possible extent, for the prevention and detection as well as the prosecution of underpayment of taxes and duties.
Tasks of the financial police
It is the task of the financial police to ensure, through controls, fair and equal terms for all participants in economic life, thereby ensuring the protection of the financial interests of the Republic of Austria. The preventive work of the financial police is intended, in the interests of the labour market and the economic location of Austria, to prevent unfair competition as a result of competitive advantages arising from illegal working, social welfare fraud and fiscal fraud. This also serves to secure wage and employment conditions of Austrian and integrated foreign workers, above all with regard to the evolution of the Austrian labour market.
One of the key specific tasks of the financial police concerns measures ensuring tax supervision (supervisory and control operations for the purpose of collecting taxes) as well as regulatory policy measures (in particular labour market tasks as well as controls under the Social Welfare Fraud Act and compliance with the Gambling Act. Bundling these measures under the umbrella of the financial police pursues the objective of taking the requisite action in a more timely and swift fashion, identifying and assessing offending circumstances promptly, and evaluating and communicating the findings gained in a targeted manner.