Digitisation of the application of tax law in Austria
The Commission provided technical support to the Austrian Tax administration under the Ministry of Finance (BMF) to design and prepare a reform for digitisation of the application of tax law in Austria. The core of this reform will be the implementation of digital audits and automated plausibility checks on the cash-based accounting data provided by the small and medium enterprises (SMEs). The project focused on potential legislative issues as well as on the operational aspects of the reform. Successful implementation of digital audits will ensure legal certainty, predictability of the audit decisions, and will strengthen tax compliance in Austria.
Every year, the Austrian Ministry of Finance (BMF) completes about 25 000 tax audits carried out in a conventional manner, which involves significant resources for both - tax administration and taxpayers. Furthermore, only large enterprises are subject to a system of continuous tax audits, while the coverage of small and medium enterprises (SME) is much lower due to the limited resources of the tax authorities.
In this view, the BMF would like to increase both audit density and audit depth through automation and digitisation for compliant taxpayers, retaining resources for less compliant cases. The desired reform would bring together new legislation, new audit procedures and digital tools to substitute the manual audit work and implement automated plausibility checks (standard audit routines) for the compliant taxpayers
In order to address Austria’s needs in a systematic and comprehensive way, the project included the following measures:
- Analyse the internal context and external context for the implementation of the automated audits.
- Perform an extensive international benchmark analysis of similar reforms in other countries.
- Elaborate a tailor-made strategy and approach for the implementation of the reform.
- Elaborate a tailor-made approach for involving and preparing the external stakeholders for the reform.
- Carry out a cost-benefit analysis for the reform.
- Perform a gap analysis and draw a transition plan from the current to the future situation regarding automated audits.
- Elaborate an overall action plan for the implementation phase of the reform – with concrete steps, milestones, and responsible actors.
This project produced the following deliverables for the beneficiary authorities:
- Analysis of the current environment for the reform.
- Report from benchmarking research of international experience.
- Strategy for implementation of automated audits with cost-benefit analysis.
- Plan for the implementation of the automated audits.
Provided that, the proposals and recommendations will be incorporated as part of the Austria’s institutional and operational framework, the deliverables are expected to result in the following outcomes:
- Deep and comprehensive understanding of the legal and operational aspects of the digitalisation of tax law through automated audits in other Member States including exchange of lessons learned.
- Adoption of a detailed tailor-made strategy and implementation plan with legal and operational measures for implementing automated audits in Austria.
Although subject to other contributing factors, the tasks and deliverables of the project and the associated outcomes should help BMF to ensure legal certainty, predictability of the audit decisions, to strengthen tax compliance and the sustainability of the public revenues in Austria.
More about the project