Tax audit in Vienna – process and preparation

A tax audit, now officially referred to as an „external audit“ (Außenprüfung), can affect any Viennese company that is required to keep accounts or records. The legal basis is the Federal Fiscal Code (Bundesabgabenordnung, BAO), specifically Sections 143 et seq. The authority's aim is to ensure that taxes have been declared completely and correctly. Anyone who knows the process of an external audit and the necessary preparations need not worry about a possible audit and can approach the situation far more calmly.

Not every company is affected by a tax audit. The tax office selects the companies to be audited according to three criteria.

• Group selection (Gruppenauswahl): the businesses to be audited are selected computer-assisted using mathematical-statistical procedures.
• Time selection (Zeitauswahl) concerns businesses whose last audit was a long time ago.
• Individual selection (Einzelauswahl), on the other hand, applies in cases of specific irregularities. Discrepancies in tax returns, third-party tips or industry-typical risks – for instance in gastronomy or construction – can trigger an audit.

As a rule, the last three assessed years are audited. In certain cases, however, earlier periods that are not yet time-barred may also be included.

The tax office usually announces an external audit at least one week in advance, mostly by phone. An announcement by e-mail is not permissible under fiscal law. At the start of the procedure, the auditor identifies themselves and hands the company the audit order. This specifies the types of tax and periods to be audited as well as the exact start of the audit. The audit order counts as an official notice (Bescheid).

The audit generally takes place at the business, but can also be carried out at the office of the tax representative, which is often sensible in practice. During the audit, the auditor has the right to inspect books, receipts and records, to view the business premises and to obtain information. If books are kept electronically, the data must be provided in machine-readable form – as a text or XML file, but not as a PDF – on a data carrier.

The audit concludes with the final meeting (Schlussbesprechung), in which the audit findings are discussed. A written record (Niederschrift) must be drawn up of this meeting, which should also include any differing legal opinions of the company. Signing this record merely confirms that the meeting took place, not agreement with its content. Differing legal opinions and the presentation of exonerating facts should be documented. On the basis of the subsequent audit report, corrected tax assessments may be issued, which the company can contest within one month.

To ensure the tax audit in Vienna runs smoothly, it makes sense to involve your tax representative as soon as the audit is announced – and not only on the day of the audit. Under certain conditions, filing a voluntary self-disclosure (Selbstanzeige) in good time before the audit begins can make sense. Within the company, only a single contact person should be designated for dealings with the auditor. Other employees refer any questions to this person. All relevant documents such as the general ledger, journals, receipts, payroll records, contracts and source records (calendar entries, delivery notes, logbooks) should be available in full and in order. If source records are missing, the tax office may question the factual accuracy of the books and carry out an estimate.

A frequently underestimated point is the following: if findings are made during the audit (e.g. back payments, new assessment bases), these must be implemented in the following years without fail. If this is omitted, the accusation of intent can easily arise in a later audit, which can entail consequences under fiscal criminal law.

A tax audit is no reason to panic, but a good opportunity to review your own bookkeeping and documentation. The experts at Treuhand-Union support Viennese companies through every phase of the external audit: from the first announcement through the final meeting to the assessment of any findings. With 25 offices across Austria and 71 tax advisors, a competent contact is available for every industry and company size – someone who knows your company and is quickly reachable.