Phase 2 Supplementary Report for Austria

SUPPLEMENTARY PEER REVIEW REPORT Phase 2 Legal and Regulatory Framework AUSTRIA PourFor plus more de renseignementsinformation ForumGlobal mondial Forum onsur Transparency la transparence and et l’échangeExchange de renseignementsof Information for à Taxdes Purposesfins fiscales www.oecd.org/fiscalite/transparencewww.oecd.org/tax/transparency www.eoi-tax.org Email: [email protected] TABLE OF CONTENTS – 3 Table of Contents About the Global Forum 5 Abbreviations 7 Executive summary �� 9 Introduction �� 13 Information and methodology used for the peer review of Austria 13 Overview of Austria 14 Recent developments ��16 Compliance with the Standards ��17 A. Availability of information 17 Overview ��17 A1 Ownership and identity information �� 19 A2 Accounting records ��41 A3 Banking information �� 44 B. Access to information �� 47 Overview �� 47 B1 Competent Authority’s ability to obtain and provide information 48 B2 Notification requirements and rights and safeguards 59 C. Exchange of information �� 63 Overview �� 63 C1 Exchange of information mechanisms �� 64 C2 Exchange of information mechanisms with all relevant partners �� 71 C3 Confidentiality �� 73 C4 Rights and safeguards of taxpayers and third parties 77 C5 Timeliness of responses to requests for information �� 78 SUPPLEMENTARY PEER REVIEW REPORT – PHASE 2 REPORT – AUSTRIA © OECD 2015 4 – TABLE OF CONTENTS Summary of determinations and factors underlying recommendations �� 83 Annex 1: Jurisdiction’s response to the review report 87 Annex 2: List of all exchange-of-information mechanisms in force �� 89 Annex 3: List of all laws, regulations and other material received 98 Annex 4: People interviewed during on-site visit 100 SUPPLEMENTARY PEER REVIEW REPORT – PHASE 2 REPORT – AUSTRIA © OECD 2015 ABOUT THE GLOBAL FORUM – 5 About the Global Forum The Global Forum on Transparency and Exchange of Information for Tax Purposes is the multilateral framework within which work in the area of tax transparency and exchange of information is carried out by over 120 jurisdictions, which participate in the Global Forum on an equal footing The Global Forum is charged with in-depth monitoring and peer review of the implementation of the international standards of transparency and exchange of information for tax purposes These standards are primarily reflected in the 2002 OECD Model Agreement on Exchange of Information on Tax Matters and its commentary, and in Article 26 of the OECD Model Tax Convention on Income and on Capital and its commentary as updated in 2004 The standards have also been incorporated into the UN Model Tax Convention The standards provide for international exchange on request of foreseeably relevant information for the administration or enforcement of the domestic tax laws of a requesting party Fishing expeditions are not authorised but all foreseeably relevant information must be provided, including bank information and information held by fiduciaries, regardless of the existence of a domestic tax interest or the application of a dual criminality standard All members of the Global Forum, as well as jurisdictions identified by the Global Forum as relevant to its work, are being reviewed This process is undertaken in two phases Phase 1 reviews assess the quality of a jurisdiction’s legal and regulatory framework for the exchange of information, while Phase 2 reviews look at the practical implementation of that framework Some Global Forum members are undergoing combined – Phase 1 and Phase 2 – reviews The Global Forum has also put in place a process for supplementary reports to follow-up on recommendations, as well as for the ongoing monitoring of jurisdictions following the conclusion of a review The ultimate goal is to help jurisdictions to effectively implement the international standards of transparency and exchange of information for tax purposes All review reports are published once approved by the Global Forum and they thus represent agreed Global Forum reports For more information on the work of the Global Forum on Transparency and Exchange of Information for Tax Purposes, and for copies of the published review reports, please refer to wwwoecdorg/tax/transparency and wwweoi-taxorg SUPPLEMENTARY PEER REVIEW REPORT – PHASE 2 REPORT – AUSTRIA © OECD 2015 Abbreviations – 7 Abbreviations ADG: Administrative Assistance Implementation Act AG: joint-stock company AML/CFT legislation: Anti-money laundering/combating financing of terrorism Legislation BAO: Federal Fiscal Code CDD: Customer Due Diligence EStG: Income Tax Act FBG: Austrian Commercial Register Act Firmenbuch: Business Register Finanzstrafgesetz: Fiscal Offences Act FMA: Financial Market Authority Genossenschaft: Co-operatives GmbH: Limited liability company KStG: Corporation Tax Act Multilateral Convention: Convention on Mutual Administrative Assistance in Tax Matters, as amended by the 2010 Protocol UStG: Value-Added Tax Act SE: European Company Strafgesetzbuch: Criminal Code Treugeber: the economic owner of assets held in a Treuhand Treuhand: Austrian fiduciary relationship Treuhänder: trustees SUPPLEMENTARY PEER REVIEW REPORT – PHASE 2 REPORT – AUSTRIA © OECD 2015 EXecutive summary – 9 Executive summary 1. In 2013, the Global Forum evaluated Austria for its implementation of the standard in practice Austria was rated Partially Compliant overall This supplementary report evaluates the progress made by Austria since then This report concludes that Austria is now rated Largely Compliant overall 2 The Phase 2 report concluded that Austria was Compliant for elements A2 (Availability of Accounting Information), A3 (Availability of Banking Information), C4 (Rights and Safeguards) and C5 (Exchanging Information), Largely Compliant for elements C2 (Network of EOI Mechanisms) and C3 (Confidentiality), Partially Compliant for elements B1 (Access to Information), B2 (Rights and Safeguards) and C1 (EOI Mechanisms), and Non-Compliant for element A1 (Availability of Ownership and Identity Information) 3. The legal and practical implementation of the standard for elements A2, A3, C4 and C5 have remained Compliant 4. For element A1, the Phase 2 report concluded that Austria’s legal framework did not contain adequate incentives or specific sanctions to ensure that all bearer shares issued by unlisted companies would be converted into registered shares before 1 January 2014 (the timeline for conversion provided by law) Austria has introduced new legal measures to address the shortcomings identified in the Phase 2 report and have actively monitored the implementation of the rules in practice The conversion of bearer shares has only been mandatory since 1 January 2014, and so experience with the new rules is limited Therefore, it is recommended that Austria continues to ensure that the rules are effectively implemented As a result of these changes the rating for element A1 has been upgraded to Largely Compliant 5. The issue in element B1 was that Austria could only use its access powers to obtain banking information for 40 out of 92 EOI partners Austria addressed this issue by ratifying the Multilateral Convention and updating its treaty network on a bilateral basis, and can now use its access powers to obtain bank information for 97 out of 118 EOI partners The restrictions that existed during the peer review period under some EOI relationships which since have been updated to the standard, did affect EOI in practice SUPPLEMENTARY PEER REVIEW REPORT – PHASE 2 REPORT – AUSTRIA © OECD 2015 EXecutive summary – 10 Nevertheless, given the progress made by Austria in updating its treaty network, the rating for element B1 has been upgraded to Largely Compliant 6. In respect of element B2, Austria had a prior notification procedure for accessing bank information, without any exceptions Austria addressed this issue by abolishing the prior notification procedure with effect from 16 June 2014 The rating for element B2 has

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