Tax justice ensured online too: no fewer than 7.5 million reports filed by online platforms since 1 January 2020 Brunner: greater tax justice and fair conditions for competition

An obligation for online platforms to keep financial records was introduced on 1 January 2020 to ensure fair competition in the digital world too. Since then, portals, websites and virtual marketplaces that help to sell goods or services to consumers in Austria have been required to keep records of their sales figures.

Online platforms have already filed some 7.5 million reports since the record-keeping obligation came into effect on 1 January 2020. 2021 saw 31 digital platforms make some 4 million declarations in all, while 30 digital platforms from the e-commerce, transport and accommodation sectors had submitted around 3.5 million reports for the previous year. The reports list all underlying transactions for each service provider and month.

“We’re collecting this data because it’s often not obvious who’s behind a product or service being offered on an online platform,” says Federal Minister of Finance Magnus Brunner. “If we don’t know who’s providing the goods or services, we can’t check whether they’re paying tax on them either. Once the report has been received, the tax administration gets to work. Our Predictive Analytics Competence Centre (PACC) prepares the data and passes it on to the Tax Authority Austria. My colleagues can then review the reports and check the sales that the platforms have declared against their tax returns. So here you have a modern, interconnected tax administration ensuring greater tax justice and fair conditions for competition with traditional offerings in international e-commerce and online services too.”

Foreign companies are processed all together by a specific unit at the Tax Authority Austria, with all other cases being divided up across the country. Tax administration staff verify the data reported in both internal and field sales. Needless to say, one major priority throughout the whole process is data protection, which is ensured at all times by a tool that meets international security standards. However, besides using the reports filed by the online platforms to improve tax justice in the mail-order business or the online sale of services, such as sourcing accommodation, other regional authorities will also be able to use the information as a basis to assess tourist taxes, for example.

“In other words, enforcing this obligation to keep records brings multiple benefits,” Brunner continues. Its success is also reflected in the fact that, in 2020, over 9,000 foreign companies registered to pay tax in Austria. We’re seeing a high compliance rate with our solution, including in comparison with other countries, which is undoubtedly because the platforms are finding it clear and easy to use. We’ll continue to strive for close cooperation at international level, because concerted action is key when it comes to taxing e-commerce.”

The obligation to keep records covers all online platforms in principle and requires them to report total annual domestic sales in excess of EUR 1 million to the tax authority electronically by 31 January of the following year. The tax administration had already conducted research into platforms subject to reporting requirements before it introduced the new scheme. If reports are missing or incomplete, a request for their submission or follow-up questions are sent to the platform in question where necessary.