The aim of the 2013 government programme was to drive forward and realise implementation of the pre-filled tax return. This already appeared largely assured through transfer of the previous year’s figures to FinanzOnline. However, the Austrian Ministry of Finance sought further optimisation intended to significantly ease the burden on taxpayers primarily in the context of income tax and the related employee tax return. The upshot of this was a project contract from the then Directorate-General IV, with the aim of enabling automatic payment of tax credit balances. This would include obtaining from the source the data required for calculating any tax credit balance, thereby relieving the burden on the individual taxpayer. In addition to creation of the technical preconditions, the challenges consisted of enabling electronic data transfer from the relevant organisations, having regard to data protection law, and adjusting Austrian procedural law. This would mean that a tax credit balance could be paid out without an application being made, and the adjustments resulting from a subsequently filled-in tax return could be taken into account without unnecessary bureaucracy.
Therefore, the core concept of the project consisted of two areas: the automatic payment of tax credit balances relating to employment, and the incorporation of strategically long-term extraordinary allowances. The first relates to income tax, where the calculation basis consists of payslip data transmitted by employers. The second relates to donations, contributions to churches and religious associations, retrospective pension contributions and additional contributions to pension schemes as well as data relating to disability.
Through automated employee tax assessment, since the second half of 2017 and under certain preconditions, taxpayers have been receiving tax refunds without needing to make a separate application. The beneficiaries are taxpayers who, by the middle of the following year, have not submitted a tax return for the previous year. In this way, where too much income tax has been deducted, it is automatically refunded; likewise, sole earners, single-parent credits or social security payments are also credited.
The advantages for taxpayers are that there is no requirement to submit a separate tax return, as overpayments of tax are automatically calculated by the tax administration. The credit amount is transferred to beneficiaries’ bank accounts and a notice of assessment is issued. This service supports in particular those people on a low income or a minimum pension who, in the past, often did not make use of the option to submit an employee tax return. However, in principle, it benefits anyone who only has income liable to income tax and who is owed a tax credit. If the tax administration can assume that a taxpayer will submit an application to report additional expenditure, then initially, no automated employee tax assessment will be implemented. However, if, within a period of two years following the assessment period no employee tax return has yet been submitted where a tax credit is owed, an automatic tax calculation will always be undertaken.
Through data transmission directly from the organisation by means of encrypted ‘sector-specific personal tax identifiers’, the highest level of data protection is assured. Taxpayers save themselves the inconvenience of collecting and collating donation receipts, while it enables automatic integration into the automated employee tax assessment, ordinary employee tax returns and income tax returns.