Austria Plans Tax Data Bank

by Ulrika Lomas, Tax-News.com, Brussels

06 July 2010

Austria’s coalition government has confirmed plans to create a transparency database, providing every individual with a virtual account in which not only precise tax payments will be clearly visible and readily accessible, but also where they are able to view exactly what benefits they are receiving in return from the state.

Following much political wrangling and on-going debate, and in exchange for a deal on the standardization of social aid, the ruling Social Democratic Party (SPÖ) has finally given the green light to a controversial proposal put forward by coalition partner the Austrian People’s Party (ÖVP), aiming to introduce a transparency database in Austria from 2012 at the very latest. The database is designed to provide detailed information to both the state and individuals regarding what tax payments are being made, to whom, and for how much.

Under the proposals, individuals will be able to obtain in an instant an overview of precisely how much of their income has been given to the state in the form of taxes or levies, and to find out what benefits they have received from the state in the form of aid, support and other services. The information contained in the database will provide details on, for example, transfer payments of family support benefits and money for care, on government subsidies granted to industry, on funding for research, on grants accorded to farmers, and on social security benefits (such as unemployment benefits and pensions) as well as on tax savings.

Alluding to the government’s latest proposal, Austria’s Finance Minister and ÖVP chairman Josef Pröll described the transparency database as an x-ray image. Using the simile of a doctor drawing “the right conclusions” from an x-ray, Pröll emphasized that the government too would be able to draw the right political conclusions from the database.

Finance and social ministers are due to present their initial assessment by the beginning of September, with the aim of submitting a government bill to the National Assembly by October 19. Determined that the bill will be adopted before Christmas, the government is anticipating that the new law will then enter into force from January 1, 2011.

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