Tasks in the anti-fraud fight
In the understanding of the Federal Ministry of Finance, combating fraud means securing the financial interests of the Republic of Austria and the European Union. This definition alone does not fully cover the tasks of anti-fraud measures. The protection of honest business and consumers as well as the protection of the environment and biodiversity are also among the tasks of the Federal Ministry of Finance and therefore in the broadest sense also form part of combating fraud.
Protection of the financial interests of the Republic of Austria
The strategic goal of the Federal Ministry of Finance is to ensure stable finances, in order to be able to continue to fulfil the tasks of the public sector in the future as well. Any action by tax debtors that is contrary to this principle and thereby unjustifiably reduces State revenue is subject to the anti-fraud fight.
Protection of the financial interests of the European Union
With its accession to the European Union, the Republic of Austria has also assumed the obligation to ensure proper collection of EU resources and adequate use of subsidies.
Protection of the fair economy
Any form of deliberate tax evasion enables a company to offer its goods or services more cheaply than its competitors can. Through black-market sales, non-payment of wage and social security contributions, or illegal imports of excisable goods, illegally acting companies enter into direct competition with entire professional groups and cause not only a considerable drop in taxes but also massive losses in turnover for these professional groups.
Consumers must have the certainty that the branded goods they purchase do meet the quality standards and guarantees promised by the brand owner. IP owners have a legal claim to have their trademarks and intellectual property protected against counterfeiting and illegal acts by third parties.
Strengthening tax compliance
The principle of tax compliance is basically geared to a partnership between the tax authority and the citizens who properly fulfil their tax obligations, as well as effective measures to establish tax justice towards those who do not – combating fraud in the form of tax supervision, auditing and control.
Protection of environment and biodiversity
Trade in live animals and plants protected under international treaties is prohibited and punishable. The field of activity of the Federal Ministry of Finance also includes environmental protection agendas in the form of implementation of the Contaminated Sites Remediation Act (Altlastensanierungsgesetz, ALSAG). By uncovering illegal landfills and illegal rubble and waste deposits, a valuable contribution is made to the protection of the environment.
A successful fight against fraud cannot be limited to detection of tax evasions and other offences that have already been committed, but must aim at preventing and suppressing tax offences. Fraud can also be curbed through targeted information to the public – more transparency leads to less fraud.
Internal risks relate primarily to gaps in internal process flows that allow taxpayers to circumvent controls through incorrect declarations and applications and thereby gain a fiscal advantage (lower tax burden, unjustified payments, late payment of taxes). External risks specifically concern taxpayers’ activities aimed at reducing the state’s tax claim or obtaining unjustified payments at the expense of the budget through fraudulent actions.
Fighting Tax Crime: The Ten Global Principles
The OECD developped the first comprehensive guide to fighting tax crimes. It sets out ten global principles, covering the legal, strategic, administrative and operational aspects of addressing tax crimes. The guide has been prepared by the OECD Task Force on Tax Crimes and Other Crimes (TFTC). It draws on the experience of the members of the TFTC as well as additional survey data provided by 31 jurisdictions.
Ensure Tax Offences are Criminalised
Devise an Effective Strategy for Addressing Tax Crimes
Have Adequate Investigative Powers
Have Effective Powers to Freeze, Seize and Confiscate Assets
Put in Place an Organisational Structure with Defined Responsibilities
Provide Adequate Resources for Tax Crime Investigation
Make Tax Crimes a Predicate Offence for Money Laundering
Have an Effective Framework for Domestic Inter-agency Co-operation
Ensure International Co-operation Mechanisms are Available
Protect Suspects’ Rights
Read the full report here