Tax Audit

How to properly prepare for a tax audit?

Generally, a tax audit is announced by phone approximately one week before it begins. There isn't much time between the announcement and the start of the audit. Therefore, you should always have the documents to be handed over to the auditor readily available. At the beginning of the audit, the auditors request the documents to be examined in electronic form (known as ACL files). These files should be readily generated at any time. Part of good preparation is also checking these files in advance for any irregularities to avoid surprises later on. If you have committed any tax offenses in the past, they must be discussed with your tax advisor before the start of the audit. These offenses must be disclosed to the auditor in the form of a "voluntary disclosure" no later than the beginning of the audit.

Should a voluntary disclosure be made?

If there have been tax violations in the past, they can be disclosed to the auditor in the form of a "voluntary disclosure" at the beginning of the audit in order to have a mitigating effect on any potential penalties. However, be cautious, as a voluntary disclosure must be done correctly and completely; otherwise, it will not have the intended effect, and the authorities will be informed of your misconduct.

Where does the tax audit take place?

For the companies we represent, we generally handle the tax audit at our office, which has proven to be extremely effective in practice. Many companies do not have their own space to accommodate the auditor. However, an even more important aspect is emotional. When the audit is conducted at our office, we engage with the auditor on a purely professional and impartial level, which benefits all parties involved.

How many years are examined?

Usually, the tax authorities examine the past three assessment years. Additionally, the value-added tax (VAT) is reviewed up until the last VAT return period through a so-called "VAT follow-up audit."

Procedure of the tax audit

After the documents have been formally submitted, the auditor evaluates them using their auditing program. If discrepancies or uncertainties are discovered, the auditor will request detailed receipts and explanations. The detailed documents and explanations are then provided to or discussed with the auditor. At the end of the audit, the auditor compiles their findings in a "closing meeting program" and holds a final meeting with the taxpayer and their advisor. During this meeting, all points are discussed once again. The auditors must adhere to specific guidelines for conducting the audit, which are outlined in the Financial Administration's organizational manual. You can download a copy of this manual here: Organizational Manual of the Financial Administration.

Can information be refused?

Generally, entrepreneurs are obligated to disclose all information regarding their tax obligations to the tax authorities. However, there are limits to this requirement, and information regarding one's private life does not need to be provided.

Is representation by a tax advisor necessary?

Do not hesitate to engage a trusted tax advisor during a tax audit. Believe us, the fee for representation during a tax audit will certainly be offset by the reduced tax payments.

Financial Police

The Financial Police in Austria is a special control unit of the Office for Combating Fraud. Its task is to combat tax evasion, social fraud, illegal gambling, and the shadow economy. The Financial Police aims to protect Austria's financial interests. Its powers include the right of entry and detention, as well as the right to establish identity. The tasks of the Financial Police include tax supervision, securing the basis of taxation, and forwarding findings to the relevant authorities. They also monitor compliance with labor market and gambling regulations, as well as reporting obligations for companies. The Financial Police conducts its own investigations and works closely with the Data, Information, and Processing Center. It supports the fraud prevention strategy of the Federal Ministry of Finance and can be commissioned by