Austrian Accounts Register and Inspection of Accounts
Frequently asked questions about the Austrian Accounts Register and Inspection of Accounts Act and on automatic information exchange:
Table of contents
- Austrian Accounts Register and Inspection of Accounts Act
- Why has the Accounts Register been introduced?
- What is the difference between the Accounts Register and the Inspection of Accounts?
- When was the Accounts Register introduced?
- Which data does the Accounts Register include, which not?
- Who is authorised to inspect the Accounts Register, and when?
- When is an inspection of accounts permitted?
- Can tax advisers with a power of attorney obtain information?
- Could potential tax evaders not tunnel their money abroad before the entry into force of the Act?
- Automatic exchange of information concerning financial accounts
- What is the automatic exchange of financial account information?
- What data is covered by the automatic exchange of information concerning financial accounts?
- What are the reasons for the automatic exchange of information concerning financial accounts?
- Who decided the automatic exchange of information and when?
- How many states participate and starting when?
- Is Austria required to conclude a separate agreement with each state?
- When does the automatic exchange of information start?
- To what extent does automatic exchange of information differ from administrative assistance? Is this is a form of automatic administrative assistance?
- Automatic exchange of information on taxpayers' earnings between states
- What does the exchange of information on taxpayers' earnings cover?
- What are the reasons for the automatic exchange of information on taxpayers' earnings?
- Precisely what information is included?
- What do you have to do?
Another anti-fraud package was adopted as part of the tax reform of 2016. The Austrian Accounts Register and Inspection of Accounts Act is part of this package and comprises two major elements, namely the Accounts Register and the simplified Inspection of Accounts. These measures are intended to contribute to preserving taxation uniformity and thus ensuring fiscal justice. After all, the fight against tax fraud and tax evasion is a top priority and is in the best interest of honest taxpayers. Furthermore, the Accounts Register conforms to the international development in the field of combating money laundering, and of fiscal transparency. However, the exchange of financial account information may not be performed arbitrarily, thus ensuring fairness.
The Accounts Register is a database containing information about who has what accounts at which bank. The Inspection of Accounts means opening an account at the bank, whereby all account activities and the account balance are visible.
The Accounts Register has been operative since 10 August 2016, and ready for queries since 5 October, after two months during which the banks filled in the register.
The central Accounts Register contains a list of all the current accounts, building society accounts, savings accounts and securities portfolios of all entities and all persons at banks operating in Austria. That means that only the names of the persons / entities, the account numbers and the credit institutions are listed. Not included are account balances and account activities. These are disclosed only in case of a judicially approved inspection of accounts. The data in the Accounts Register is provided by the respective bank and continuously updated.
Banking secrecy has not been abolished; merely exceptions were created for the tax authorities. They are permitted to perform inspections in the course of fiscal and financial criminal proceedings, but only when it is appropriate and reasonable. Apart from public prosecutors and criminal courts, the fiscal penal and tax authorities as well as the Federal Finance Court may inspect the Accounts Register. Every performed inspection of the Accounts Register is notified to the person or entity in question via FinanzOnline.
However, the opening of accounts in the course of criminal court proceedings but also during financial criminal proceedings is still possible only after judicial authorisation. An inspection of accounts according to Art. 8 of the KontRegG may also be carried out during a fiscal investigation if:
- there is reasonable doubt about the accuracy of the information provided by the taxpayer,
- it is to be expected that the inspection is a suitable instrument to clarify the doubts, and
- it is to be expected that the interference with the legitimate confidentiality interests of the customer of the bank that is associated with the disclosure is not disproportionate to the purpose of the investigative measure.
- Before the Federal Finance Court decides on an inspection of accounts, the taxpayer is to be heard, and his/her statement to be appreciated. Other agencies and individuals will be granted neither information from the Accounts Register nor inspection of accounts. In this respect, banking secrecy persists. Furthermore, each query is documented and archived for ten years.
- Is data privacy ensured despite the Accounts Register / inspection of accounts?
Another purpose of the Accounts Register is also the easy and quick search for purposes of criminal investigations. So far, about 770 institutions had to be contacted, whereby about 1,500 people learned that a prosecutor was investigating a suspect. Insofar, the Accounts Register even supports data privacy. The tracebility and transparency of Accounts Register queries is optimally guaranteed, which is why the Accounts Register is supported by advocates of data privacy. The inspection of accounts is subject to judicial control, since the inspection must be approved and an appeal is possible for the persons concerned, but not for the credit institutions.
No, since Accounts Register queries may also include accounts which are not owned by the taxpayer in question, however within his rights of disposal (e.g. signatory rights over spouse’s account).
No, because the law has entered into force retroactively. The Accounts Register maps the status of 1 March 2015. In addition, according to the Austrian Capital Outflow Reporting Act (Kapitalabflussmeldegesetz), the credit institutions are under obligation to report outflows amounting to at least € 50,000 from accounts or deposits of individuals to the BMF.
The automatic exchange of information ensures exchange of tax-related information between states to combat tax evasion. In detail, it concerns those states that participate in the Standard for the Automatic Exchange of Financial Account Information (Common Reporting Standard, CRS) and communicate to each other information on financial accounts held by a person or entity of a participating state in another participating state.
This information includes as a matter of principle the data of a person or entity subject to reporting (name, address, country/countries of residence, tax identification number(s) or date of birth and place of birth in the case of persons, account number), the name and the Austrian tax identification number of the reporting financial institution, and the account balance or value (including the cash value or surrender value in the case of redeemable insurance or annuity contracts) at the end of the respective calendar year. (Additional reporting requirements for notifying financial institutions exist for custody accounts, deposit accounts and other accounts of persons or entities subject to registration.)
The focus is on establishing fairness: Honest taxpaying citizens should not be put at a disadvantage compared to those who do not comply with the applicable laws. Cooperation between the countries thus ensures a maximum of fiscal fairness by means of a transparent process.
The Standard for the Automatic Exchange of Financial Account Information (Common Reporting Standard) was developed by the OECD. On 29 October 2014, Austria signed a multilateral administrative agreement (based on Article 6 of the Multilateral Administrative Assistance Agreement) and thus officially committed itself to the automatic exchange of information. EU Directive 2014/107/EU amending Directive 2011/16/EU on Administrative Assistance implements this Common Reporting Standard at the EU level. The EU Directive was to be implemented by 31 December 2015 in Austrian national law. The Common Reporting Standard has been implemented in Austria in the Austrian Common Reporting Standard Act (Gemeinsames Meldestandardgesetz, GMSG).
For the automatic exchange of information, there are several legal bases:
The above-mentioned EU Directive: All EU Member States participate (basically: first transmission of information from 2017 onwards for the period of 2016; exception Austria: first transmission of information to EU Member States from 2018 onwards for the period of 2017; except in relation to new accounts opened on or after October 01st, 2016 – due to Austria’s political commitments in connection with the Common Reporting Standard, information on these accounts is transmitted already in 2017)
Agreements which the EU has concluded with Liechtenstein, Switzerland, Andorra, San Marino and Monaco (“5 third countries”): These are participating states in relation to Austria from 1 January 2017; hence, Austria will transmit information to these 5 third countries from 2018.
Other states that have joined the intergovernmental agreement that Austria signed on 29 October 2014, and that are willing to share information with Austria on the basis of reciprocity. The exchange of information will take place from 2018 onwards, and the countries concerned will be made known by way of an ordinance. The ordinance is currently still being prepared. Currently participating countries are listed in the BMF info BMF-010221/0853-VI/8/2016. For further information please visit the OECD website
No, this will be necessary only in the case of individual states that do not take part in any of the above-mentioned instruments (esp. intergovernmental agreements).
- Regarding new accounts opened starting 1 October 2016, initial transmission of information to EU Member States starts in 2017;
- Otherwise first transmission of information for the period 2017 starting in 2018; the information transmitted relates to the reporting period respectively preceding it.
To what extent does automatic exchange of information differ from administrative assistance? Is this is a form of automatic administrative assistance?
- Upon request: If the information is expected to be important to other tax administrations for the purposes of tax collection, these administrations may send a request for transmission of information to other tax administrations (e. g. based on the EU Directive 2011/16 or the double-taxation agreement).
- Spontaneous: If a tax administration is in possession of information and assumes, due to certain circumstances, that this information is likely to be important for the other tax administration (e. g. there are reasons to suspect tax evasion in the other state), it will transmit them to the other state without the latter having requested the information before (e. g. based on the EU Directive 2011/16 or the double-taxation agreement).
- Automatic: Periodically, certain data (e.g. about financial accounts) is transmitted without the other state having requested them before.
This automatic exchange of information ensures reconciliation of tax-related information between states concerning certain fiscally relevant earnings. Standardised and IT-supported processes ensure citizen-friendly and efficient execution.
The BMF receives information from other states on Austria-based taxpayers who have income or assets in the respective countries. In return, the BMF sends data to the states participating in the exchange regarding persons who are taxable in the respective country and have income or assets in Austria.
Again, the aim is to ensure fairness: Honest taxpaying citizens should not be put at disadvantage compared to those who do not comply with the applicable laws. Cooperation between some 100 countries thus ensures a maximum of fiscal fairness by means of a transparent process.
- Income from pensions
- Earnings from employment
- Earnings from rentals and leasing
- Income from supervisory board remuneration
- Information on life insurances
- Information on the ownership of immovable property
- Additional tax-related information on the basis of double taxation agreements
For honest taxpaying citizens, nothing changes. As before, any income or assets generated abroad must be reported in Austria: in the employee tax assessment (pensions, income from self-employment) via FinanzOnline or submission of the form L1 with Annex L1i in the income tax return, via FinanzOnline or form sheet E1 with annexes (depending on source of income / assets), respectively.