Financial Police

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 business 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 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.

Organisation

As of 1 July 2013 the Financial Police is economically independent and in terms of human resources. Its headquarters are in Vienna with branches in every tax office. The data, information and preparation center (DIAC) is part of the financial police and responsible for database research and analysis as well as for providing information to national and international authorities.

The set-up of the financial police as a national anti-fraud unit is an important part of the implementation of the ministry´s strategy to strengthen the combat against fraud in order to protect the financial interests of the republic and the business location Austria.

Tax supervision​

The tasks of the financial police within the realm of tax supervision include establishing the bases for tax collection, including assessing taxes and collecting them.
Supervisory and control activities comprise in particular the following:

  • Establishment of circumstances relevant in tax terms
  • Preventing the non-declaration of sales and income achieved as well as the non-reporting/non-payment of income tax
  • Uncovering companies not registered for tax purposes or companies without a permanent establishment within Austrian territory
  • Securing taxation bases (e.g. uncovering and identifying high-risk companies and operations as well as communication of risk ratings)

Securing tax claims, collection of tax arrears

  • Investigations for the purpose of collection measures
  • Investigation of tax bases and generation of payment orders
  • Execution of payment orders
  • Investigation of contracting agencies for the purpose of attaching claims
  • Collection operations and attachment of movables

Regulatory policy functions

Regulatory policy tasks (in particular labour market tasks as well as controls to ensure compliance with the Gambling Act) include in particular the following:

Uncovering the illegal employment of foreign workers

Control of and within companies, business establishments, business premises, field offices and staff rooms as well as control of the workers identified there to check that they have the correct permits under employment law, residence and settlement law.

  • Control of the contracting agency to ensure compliance with registration duties regarding such agency’s contractors
  • Filing of formal complaints and participation in proceedings relating to administrative offences
  

Uncovering breaches of the provisions of the Employment Law Harmonisation Act

Performing checks of and within companies, business establishments and field offices as well as checks of the workers identified there who are assigned from the EEA, to ensure that there are no cases of underpayment under the Act against Wage Dumping and Social Dumping.

  • Uncovering breaches of the provisions of the General Social Insurance Act
  • Control of and within companies, business establishments and field offices to ensure the correct registration of all workers prior to commencing work as well as false and fictitious registrations.
 

Uncovering breaches of the registration duties contained in the Unemployment Insurance Act

Performing checks of and within companies, business establishments and field offices as well as checks of the workers identified there to ensure that the registration duties required of them under the Unemployment Insurance Act have been observed.

 

Uncovering illegal practice of a trade under the Industrial Code

Control of operations to ensure a corresponding trade permit.

 

Uncovering social welfare fraud under the Criminal Code

Establishing facts indicating the withholding of employee contributions to social welfare insurance, fraudulent withholding of contributions to social welfare insurance and supplements under the Act governing Holidays and Redundancy Payments for Workers in the Construction Industry as well as organised illegal working.

  • Own investigations or investigations on the instruction of the criminal prosecution authorities
 

Gambling

  • Uncovering breaches of the Gambling Act
  • Control of business establishments and business premises and rooms, and control of the duties to keep and maintain records under the terms of the Gambling Act
  • Provisional confiscation of illegal gambling machines, other infringing items and technical aids
  • Filing of formal complaints and participation in proceedings relating to administrative offences
 

Commissioned tasks

The financial police may be instructed by the tax offices as fiscal authority, or the fiscal offence prosecution authority of first instance, to conduct general supervisory measures such as surveys and inspections pursuant to § 114 BAO (Bundesabgabenordnung, Federal Fiscal Code) in respect of pending fiscal proceedings, or to conduct general control, audit and supervisory measures pursuant to § 99 (2) of the Fiscal Offences Act (Finanzstrafgesetz, FinStrG) in order to obtain findings and relevant data for proceedings under the law on fiscal offences.

The executives bodies of the financial police are entitled, in the event of imminent endangerment, to take measures under the Fiscal Offences Act, in particular § 89 (2) FinStrG (confiscation in the event of imminent endangerment) and § 93 (4) FinStrG (property searches in the event of imminent endangerment).

 

Role of the courts

On the instruction of the criminal prosecution authorities, executive bodies of the financial police may also be involved in investigation operations in respect of suspicion pursuant to § 153c StGB (withholding employee social insurance contributions), § 153d StGB (fraudulent withholding of social insurance contributions and supplements under the Act governing Holiday and Redundancy Payments for Workers in the Construction Industry) and § 153e StGB (organised illegal working).