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GLOBAL FORUM ON TRANSPARENCY AND EXCHANGE OF INFORMATION FOR TAX PURPOSES

Peer Review Report Phase 2 Implementation of the Standard in Practice


AUSTRIA

TABLE OF CONTENTS 3

Table of Contents

About the Global Forum  5 Executive Summary  7 Introduction11 Information and methodology used for the peer review of Austria11 Overview of Austria 12 Recent developments17 Compliance with the Standards 19 A. Availability of Information 19 Overview 19 A.1. Ownership and identity information 21 A.2. Accounting records 58 A.3. Banking information 64 B. Access to Information  67 Overview 67 B.1. Competent Authoritys ability to obtain and provide information  68 B.2. Notification requirements and rights and safeguards 78 C. Exchanging Information 83 Overview 83 C.1. Exchange of information mechanisms 85 C.2. Exchange of information mechanisms with all relevant partners 93 C.3. Confidentiality 96 C.4. Rights and safeguards of taxpayers and third parties 98 C.5. Timeliness of responses to requests for information 99

PEER REVIEW REPORT PHASE 2 AUSTRIA OECD 2013

4 TABLE OF CONTENTS Summary of Determinations and FactorsUnderlyingRecommendations 107 Annex 1:Jurisdictions Response to the Review Report113 Annex 2:List of All Exchange-of-Information Mechanisms inForce115 Annex3:List of All Laws, Regulations and Other Material Received121 Annex4:People Interviewed During On-site Visit 123

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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 100 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 Article26 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. Phase1 reviews assess the quality of a jurisdictions legal and regulatory framework for the exchange of information, while Phase2 reviews look at the practical implementation of that framework. Some Global Forum members are undergoing combined Phase1 and Phase2 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 www.oecd.org/tax/transparency and www.eoi-tax.org.

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EXECUTIVE SUMMARY 7

Executive Summary
1. This report summarises the legal and regulatory framework for transparency and exchange of information for tax purposes in Austria, together with the practical implementation of that framework. The international standard laid down in the terms of reference of the Global Forum for monitoring and reviewing progress towards transparency and exchange of information, considers the availability of relevant information within a given jurisdiction, the ability of the competent authority to access it swiftly, and whether the information may be exchanged effectively with its partners in information exchange. The assessment of effectiveness in practice has been performed in relation to a three year period (2009 to 2011). 2. Since its commitment to the international standards of transparency and exchange of information, in March 2009, Austria has negotiated several exchange of information mechanisms that incorporate the full text of Article26 of the OECD Model Tax Convention or comparable provisions and is also party to the EU Administrative Cooperation Directive 2011/16/EU which provides for exchange of information (EOI) to the standard. In all 39 of the 92 EOI relationships entered into by Austria now provide for the exchange of bank information to the standard. 33 relationships are in force. 3. In the case of 9 arrangements Belgium; Bosnia and Herzegovina; Bulgaria;Luxembourg; Mexico; Qatar; Serbia; South Africa and Tajikistan the obligations stipulated have been found not to be fully in line with the standard because of an issue concerning the obligations for an EOI partner to provide certain identity information in their EOI requests. Since its phase1 review, the convention and protocols with Hong Kong, China; San Marino; Singapore and Switzerland have either been amended or clarified to bring them in line with the standard. Belgium, Bulgaria and Luxembourg are also covered by the new EU Administrative Cooperation Directive 2011/16/EU. Austria should nevertheless ensure that all the mechanisms concluded with its partners will lead to effective exchange of information in accordance with the standard. 4. In order to give effect to these mechanisms, the Austrian competent authority for international exchange of information in tax matters, the Federal Ministry of Finance, has broad powers to access ownership and accounting

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8 EXECUTIVE SUMMARY
information from legal and natural persons. Austria also recently introduced specific legislation governing access to information of a banking nature. This legislation expressly lifts bank secrecy when the request is made under an EOI mechanism including a provision equivalent to paragraph5 of Article26 of the OECD Model Tax Convention. This access to bank information is allowed under the condition that the person concerned by the request is first notified that the information is being obtained by the competent authority in order to respond to an international request for information. Austria should however ensure that this process allows for exceptions as required by the international standard. Austria had no experience in accessing bank information for EOI purposes following the introduction of the recent legislation lifting bank secrecy, since it has not received any requests under a EOI mechanism which includes the appropriate provision pertaining to this type of information. Austria should monitor its new procedure to make sure that it can access bank information in accordance with the international standard. 5. Though Austrian law generally guarantees the availability of information on the owners of companies and partnerships, there are insufficient mechanisms to ensure the availability of information on holders of bearer shares issued by joint-stock corporations and European companies in all circumstances. Therefore, element A.1 is assessed as not being in place. Since its phase1 review, Austria has adopted new provisions prohibiting the issue of bearer shares by unlisted joint stock companies. There are however neither incentives nor specific sanctions to ensure that all bearer shares issued by unlisted companies will be converted into registered shares before 1January 2014, the timeline for conversion provided by law, and Austria should address this deficiency. 6. All companies and partnerships must register with the business register and the revenue authorities. To this extent detailed ownership information must be provided by partnerships and limited liability companies. While joint-stock companies and co-operatives are not subject to such requirements, these two types of companies must maintain a register of all registered shares or a register of members. Based on the 13 EOI requests for ownership information, in respect of which Austria has provided assistance, Austria has sufficient practical mechanisms in place to ensure that it can obtain information in practice. 7. Ownership information on foundations, whether public or private, is available due to the multiple requirements these entities are subject. While Austria does not recognise trusts, ownership information relating to these arrangements is available under the anti-money laundering requirements applying to trust service providers. The situation is the same for Treuhand (Austrian fiduciary relationship) where these requirements are also supplemented by a partial registration system. Austrian legislation also guarantees

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EXECUTIVE SUMMARY 9

the availability of accounting information for companies, partnerships and foundations due to the requirements provided for by commercial laws and tax legislation. Professional trustees and Treuhnder must keep accounting records except in some specific situations. Comprehensive anti-money laundering requirements make detailed bank information available in Austria. 8. Austria has in place a system of responses to incoming requests that is professional, in the sense that it provides all types of information accurately and respects the needs of confidentiality. Peer inputs have indicated that the peers are generally satisfied with the quality of information provided by Austria. The practices followed by Austria show that the information requested is in most instances provided in a timely manner. Statistics show that out of 829 requests received during the three year review period Austria answered 589 requests (71%) in less than 90 days. However, Austrias partners have indicated that Austria does not routinely provide an update of status when not in a position to provide the requested information in 90 days. 9. A follow up report on the steps undertaken by Austria to answer the recommendations made in this report should be provided to the PRG within twelve months after the adoption of this report. An interim report should be provided to the PRG within six months after the adoption of this report.

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INTRODUCTION 11

Introduction

Information and methodology used for the peer review of Austria


10. The assessment of the legal and regulatory framework of Austria and the practical implementation and effectiveness of this framework were based on the international standards for transparency and exchange of information as described in the Global Forums Terms of Reference to Monitor and Review Progress Towards Transparency and Exchange of Information, and was prepared using the Global Forums Methodology for Peer Reviews and Non-Member Reviews. The assessment was based on information available to the assessment team including the laws, regulations, and exchange of information arrangements in force or effect as at 17May 2013, Austrias responses to the Phase2 questionnaire and supplementary questions, information supplied by partner jurisdictions, other relevant sources as well as information collected during the on-site visit in Vienna in December 2012. During the on-site visit, the assessment team met with officials and representatives of the relevant Austrian government agencies, including the Ministry of Finance, Tax authorities, and the registration and anti-money laundering authorities. The phase2 review of Austria covered a three year review period ending on 31December 2011. 11. The Terms of Reference breaks down the standards of transparency and exchange of information into 10 essential elements and 31 enumerated aspects under three broad categories: (A)availability of information; (B)access to information; and (C)exchange of information. This review assesses Austrias legal and regulatory framework against these elements and each of the enumerated aspects as well as the practical implementation of that framework. In respect of each essential element a determination is made that: (i)the element is in place; (ii)the element is in place but certain aspects of the legal implementation of the element need improvement; or (iii)the element is not in place. These determinations are accompanied by recommendations for improvement where relevant. In addition, to reflect the Phase2 component, an assessment is also made concerning Austrias practical application of each of the essential elements. As outlined in the Note on Assessment Criteria,

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12 INTRODUCTION
following a jurisdictions Phase2 review, a rating will be applied to each of the essential elements to reflect the overall position of a jurisdiction. However, this rating will only be published at such time as a representative subset of Phase2 review is completed. This report therefore includes recommendations in respect of Austrias legal and regulatory framework and the actual implementation of the essential elements, as well as a determination on the legal and regulatory framework, but it does not include a rating of the elements (see Summary of Determinations and Factors Underlying Recommendations at the end of this report). 12. The phase1 assessment was conducted by a team which consisted of two expert assessors and one representative of the Global Forum Secretariat: Advocate Hilary Pullum, Legislative Counsel of Guernsey; Mr Jesper Vestergaard Senior Legal Adviser in the Danish Ministry of Taxation; and Mr. Rmi Verneau from the Secretariat to the Global Forum. 13. The phase2 assessment was conducted by a team consisting of three expert assessors and two representatives of the Global Forum Secretariat: Ms. Merete Helle Hansen, Senior Adviser in the Ministry of Taxation of Denmark; Ms. Lilian Birkemose, Senior EOI officer of the Danish Competent Authority; Mr. Nigel Garland, Deputy Director (Compliance and International), Guernsey; and Mr.Rmi Verneau and Mr. Bhaskar Goswami from the Secretariat to the Global Forum. The team evaluated the implementation and effectiveness of Austrias legal and regulatory framework for transparency and exchange of information and its relevant information exchange mechanisms.

Overview of Austria
14. Located in central Europe, Austria is a country with a land area of 84000 km and 8.4million inhabitants. Austria is surrounded by eight countries: Germany and the Czech Republic to the north, the Slovak Republic and Hungary to the east, Italy and Slovenia to the south, and Switzerland and Liechtenstein to the west. The capital of Austria is Vienna, with about the quarter of the Austrian population. German is Austrias national language while Croatian, Hungarian and Slovenian are official languages at a local level. Since 1999, the Austrian currency has been the Euro. 15. Austria is an advanced developed country where in 2012 services accounted for 69.4% of the GDP, industry 29.1% and agriculture 1.5%.1 Austrias main economic sectors are production of goods for exports, tourism and financial services. European Union members represent more than 70% of Austrian international trade, with Germany, Italy, and Switzerland being its
1. Information available on the Statistik Austria website, www.statistik.at/web_en/.

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INTRODUCTION 13

main trading partners. Austria is one of the most developed countries in the world with a GDP per capita of USD42400 (EUR317002) in 2011. 16. Austria has been a member of the United Nations since 1955, is a founding member of the Organisation for Economic Co-operation and Development (OECD) and joined the European Union (EU) in 1995. Austria is member of the Global Forum on Transparency and Exchange of Information for Tax Purposes.

General information on legal system and the taxation system Legal system
17. Austria is a parliamentary democratic republic established as a federal State comprising nine Lnder (states). These Lnder exercise all of the rights which have not been assigned to the Federation (Bund). The Federations Legislative power is exercised by the Parliament which is constituted of two chambers, the Nationalrat (Chamber of Representatives) and the Bundersrat (Chamber of States). All Nationalrat members are directly elected on a proportional basis for a five year term. The Nationalrat takes precedence over the Bundesrat except when the rights of the Lnder are concerned. Each Land also has its own parliament which exercises the legislative powers within its own domestic competence, the Landtag. 18. The Bunds Executive power belongs to the government led by the Bundeskanzler (Federal Chancellor). The Bundeskanzler is appointed by the Bundesprsident (President of the Federation) elected for a six years term by direct universal suffrage. The Bundesprsident is the head of the State, head of army and represents Austria abroad. The Bundeskanzler exercises all functions that are not assigned to the Bundesprsident by the Constitution. 19. The Austrian legal system is founded on Roman law, also known as civil law. The hierarchy of sources is ordered as follows: the Federal Constitution of 1920 as amended, international treaties with constitutional rank (e.g.the European Convention on Human Rights), laws and, in turn, regulations. According to the Austrian Constitution, Federal law and Lnder law have the same status. Nevertheless, the civil, entrepreneurial, criminal and financial law (including tax and anti-money laundering legislation) are part of the Bund legislation and apply throughout Austria. 20. International treaties are a source of law under Article50 of the Austrian Constitution. They are concluded by the Federal President acting on the proposal of the Federal Government. If their character is political, or if they change or supplement statutory law, the approval of the National Council
2. Using 11February 2013 exchange rates.

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14 INTRODUCTION
is required. The Council may decide that the treaty is non-self-executing, i.e.needs to be implemented by additional legislation. However, all tax treaties signed by Austria are considered to be self-executing. This means that the provisions of a tax treaty are directly incorporated into the domestic law. Even though tax treaties, after incorporation into domestic law, are formally at the level of ordinary statutory law, they are regarded as lex specialis and consequently have supremacy over ordinary statutory law. 21. Judges are independent in the exercise of their functions. They are appointed by the Bundesprsident. Within the judicial system, a distinction is drawn between: Private law tribunals have jurisdiction to hear all civil and criminal matters and organised on local and regional levels (district courts Bezirksgerichte and state courts Landes-gerichte) with four Court of Appeal acting as a second instance court; and Independent administrative tribunals have jurisdiction to review the legality of decisions and the exercise of powers by the administrative authorities. This includes all cases relating to tax matters. The Supreme Court and the Administrative Supreme Court are respectively the highest judicial instances in Austria for civil and criminal matters, and administrative cases. Finally the Constitutional Court examines the conformity of statutes with the constitution and can annul unconstitutional laws, and at the request of the Bund or Lnder, the Court can rule on the extent of their executive or legislative powers, which ruling has binding effect.

Taxation system
22. The power to legislate in tax matters comes at the Federal level. Tax matters are regulated by the Federal Fiscal Code (hereafter BAO) which addresses procedural aspects, and by special laws such as the Income Tax Act (EStG), the Corporation Tax Act (KStG) and the Value-Added Tax Act (UStG ). In Austria, income is subject to two main taxes: income tax for individuals and corporate tax for companies. 23. According to the EStG individuals are subject to unlimited tax liability when they have their residence in Austria and are liable to tax on their worldwide income. Individuals that are not deemed to be residents of Austria for tax purposes are taxed on income from Austrian sources only. Income such as salaries or income from capital is subject to a withholding tax while other income is subject to a taxation scale comprising four rates, from 0% (income up to EUR11000) to 50% (income over EUR60000).

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INTRODUCTION 15

24. All legal entities organised under private law (e.g.joint stock companies, limited liability companies, foundations, and co-operatives) as well as public entities carrying on commercial activity are subject to corporation tax. When these entities are resident in Austria for tax purposes, i.e.when they have their seat or place of effective management in Austria, they are liable to tax on their worldwide income while when the entities are not tax resident in Austria their Austrian tax liability is limited to income from Austrian source. The corporate tax is levied at the nominal rate of 25% with a minimum tax of EUR3500 for joint stock companies and EUR1750 for limited liability companies. 25. As a member of the European Union, Austria is a member of the European common value-added tax (VAT) system. The normal rate of VAT is 20% and the reduced rate 10%. 26. In 2011(last data available): VAT total revenue was EUR23.39billion and 33.48% of Austria total tax revenues; individuals income tax total revenue was EUR25.72billion and 36.82% of Austria total tax revenues; and corporate tax total revenue was EUR5.27billion, 7.55% of Austria total tax revenues.

27. Austrias network of mechanisms allowing for international exchange of information (EOI) in tax matters currently covers 92 jurisdictions, 87 by way of double tax conventions (DTCs) and 5 by way of tax information exchange agreements (TIEAs). Since March 2009 and its commitment to the international standards for transparency and exchange of information in tax matters, Austria has only concluded EOI agreements incorporating the full text of Article26 of the OECD Model Tax Convention, in particular as regards information held by banks and financial institutions. 40 EOI arrangements allowing for the exchange of bank information have been signed so far by Austria. 28. A new EU Administrative Co-operation Directive 2011/16/EU which allows EOI to the standard to take place was adopted by the European Council on 15February 2011 and came into effect on 1January 2013. This multilateral tool will allow for exchange of information to the standard with 14 more partners. This has been transposed into Austrian law with the Austrian EU Mutual Assistance Act, Federal Law Gazette No I 112/2012.

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16 INTRODUCTION

Overview of commercial laws and other relevant factors for exchange of information Overview of financial sector and relevant professions
29. At the end of 2010, Austria had a developed and diversified financial sector contributing to 5.6% of national GDP. At that date, the Austrian financial sector comprised 843 banks3, 99 investment firms, 163 investment service providers, 29 investment funds management companies and 2158 domestic investment funds, amongst other entities. In 2011 the total size of the balance sheets of banks in Austria was EUR992billion. In the same year the net asset value of investment funds was EUR137billion and the total assets of pension funds was EUR15billion. 30. The financial sector is regulated by the Federal Banking Act (Bankwesengesetz) No532/1993 adopted in 1993 as amended. This sector is under the supervision and regulation of the Financial Market Authority (FMA), an independent body under public law placed under direct parliamentary control. The FMAs functions include issuing regulations, granting licenses to financial professionals as well as supervising and enforcing prudential and AML/CFT requirement. Domestic financial institution carrying on limited specialised financial business and insurance intermediaries are directly supervised by the local district authorities. Since 2008, the Austrian National Bank has the sole responsibility for conducting offsite monitoring and onsite examinations of banks. 31. In Austria, civil law notaries (appr. 500), lawyers (more than 5000), and accountants (more than 10000 businesses) are considered to be designated non-financial businesses and professions under the scope of the anti-money laundering legislation and are accordingly required to perform customer due diligence (CDD). All these professionals are under the supervision of professional supervisory authorities.

Anti-money laundering/combating financing of terrorism legislation


32. Anti-money laundering/combating financing of terrorism (AML/ CFT) legislation in Austria is primarily based on the relevant EU law in particular the third EU Directive 2005/60/EC of the European Parliament and of the Council of 26October 2005 on the prevention of the use of the financial

3.

Of which, 539 were rural credit co-operatives providing limited services, while there were 47 joint-stock and private banks, 54 saving banks and 67 industrial credit banks.

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INTRODUCTION 17

system for the purpose of money laundering and terrorist financing.4 This legislation was transposed in Austrian law with effect as of 1January 2008. 33. An assessment of the Austrian AML/CFT legal and regulatory framework was conducted by the IMF (International Monetary Fund) and the FATF (Financial Action Task Force) in 2008.5 The report published in 2009 shows that Austrian authorities have implemented a comprehensive AML/CFT system supported by well developed federal administrative and supervisory bodies. Further, the report noted that the Austrian registration system is well developed though access to information on some entities is sometimes missing. According to the report, CDD is usually in line with the FATF Recommendations even if exceptions to these requirements are in some circumstances too broad, while record keeping requirements set out by the Austrian law meet the international standard. The Austrian AML/CFT system was strengthened since the last evaluation performed by the FATF. In particular, the Banking Act was amended in July 2010 following the conclusions of the IMF/FATF report as regards savings deposit accounts with a balance lower than EUR15000.

Recent developments
34. Austria has recently signed eight new agreements allowing for exchange of bank information. Furthermore, on 29May 2013, Austria signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, which following its entry into force in Austria will allow for the exchange of information to the standard with 14 more partners.

4. 5.

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2005:309:0015:0036:EN:PDF, accessed 2May 2011. www.fatf-gafi.org/document/48/0,3746,en_32250379_32236982_44145136_1_1_1_1,00.html, accessed 2May 2011.

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COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION 19

Compliance with the Standards

A. Availability of Information

Overview
35. Effective exchange of information requires the availability of reliable information. In particular, it requires information on the identity of owners and other stakeholders as well as accounting information on the transactions carried out by entities and other organisational structures. Such information may be kept for tax, regulatory, commercial or other reasons. If information is not kept or the information is not maintained for a reasonable period of time, a jurisdictions competent authority may not be able to obtain and provide it when requested. This section of the report assesses the adequacy of the Austrias legal and regulatory framework on availability of information. It also assesses the implementation and effectiveness of this framework in practice. 36. Austria has a sound legal and regulatory framework which ensures that information concerning the identity of owners and shareholders in companies and partnerships is usually available to the authorities. All such entities have to be registered by the local competent court in the Firmenbuch, the Austrian register of businesses. For registration, partnerships and limited liability companies must provide information on the identity of all their shareholders and partners and the Austrian legislation requires this information be updated without delay if there is any change. The phase2 review of Austria has noted that there are sufficient and workable mechanisms present

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20 COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION


within the district court authorities for the efficient maintenance of the Firmenbuch. 37. As a result of mechanisms, such as the obligation on the entities to maintain share registers, all information concerning registered shareholders in joint stock companies and members of co-operatives is available. However, from 1January 2014 it will no longer be possible for unlisted joint stock companies and European companies to issue bearer shares In July 2011 Austria amended its Companies Act to put in place measures to ensure the identification of owners of existing bearer shares issued by joint-stock companies and to prohibit the issue of bearer shares by unlisted companies. There are however neither identifiable incentives nor specific sanctions to ensure that all bearer shares will be converted into registered shares before 1January 2014, the timeline for conversion provided by law, and that all holders of bearer shares will be entered in the share register by that date. It is therefore recommended that Austria introduce appropriate mechanisms to ensure the identification of holders of bearer shares in all instances. 38. All these obligations are supplemented by comprehensive tax requirements, including registration and provision of any facts and circumstances relevant for tax purposes, as well as the annual submission of a tax return. In practice the tax administration use its wide powers to enforce these tax obligations and ensure that all type of relevant entities comply with them. 39. While trusts, a common law concept, are not recognised in Austria, information on the settlors and beneficiaries is available due in particular to the implementation AML/CFT requirements. The situation is the same as regards Treuhand, an Austrian fiduciary relationship, and is supplemented, for those arrangements, by a partial registration system when lawyers and civil law notaries are acting as Treuhnder (trustees). Austria has a very strong system of supervision by notaries and other professions in the context of their general duties, and also in their role as supervisors of the AML/CFT regime. 40. All relevant companies, partnerships and foundations are required to keep comprehensive accounting records and supporting documents for a seven-year period, in particular as a result of obligations set out in the Fiscal Code and the obligation to back the annual tax return with supporting documentation. Professional trustees and Treuhnder are subject to the same requirements except in some specific situations. 41. Banks and financial institutions are required to perform customer due diligence (CDD), to identify and verify the identity of their customers and to hold CDD and customers transaction records for a period of at least five years pursuant to anti-money laundering legislation. In practice, the FMA ensures that records are kept by banks are in accordance with their AML

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COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION 21

Obligations. As a result of this supervision, banking records are maintained in a proper way and for at least 5 years, making this information available in Austria for EOI purposes.

A.1. Ownership and identity information


Jurisdictions should ensure that ownership and identity information for all relevant entities and arrangements is available to their competent authorities.

Austrian registers
42. The business register (Firmenbuch) is maintained in Austria by each local court of justice. All businesses, whatever their legal form and activities, must be registered (s. 2 Austrian Commercial Register Act; FBG). In Austria, of the 17 district courts that have been set up, 16 have a commercial registry. The district court is headed by a President, who is responsible for the administration of the Court. In a typical district court in Austria there are approximately 20 persons working in the commercial registry. 43. Although the register is managed at the local level, the Firmenbuch is operated as a central electronic database (ss.28 and 29 FBG) and there is a single register for the whole Austrian territory. This means that all entries in the register are available on a national basis. This register is open for public inspection and all information maintained can be accessed by the Austrian revenue authorities (ss.33, 34 and 35). Austrian law also provides that all documents held by registration authorities, such as deeds of incorporation, can also be accessed for EOI purposes. 44. In addition to this register, all entities and arrangements relevant for tax purposes must be registered with the revenue authorities for tax purposes (s.119 and 120 Fiscal Code) and must, in particular, disclose all facts that are of relevance for tax purposes to the tax administration. 45. Since 2005, all the documents for registration have been received automatically from notaries (where a notarial deed is required by law) and lawyers. Notarial deeds must mandatorily be submitted electronically. When drafted by a lawyer, articles of incorporation are usually submitted in a physical format. The process of registration, when all information provided is correct, takes one week and once registered, the new entry is electronically available on the records of the registry on the next business day. The Austrian authorities reported that in 89% of cases the registration could be completed without any further queries. Upon registration, each entity is given a unique identification number. The specific procedure and practices, in respect of different entities, are discussed in the relevant sections below. However, the procedure is similar in respect of all entities, be they companies, partnerships, etc.

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22 COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION

Companies (ToR6 A.1.1)


46. Austrian law provides for four types of companies: Aktiengesellschaft (AG) joint stock company (Stock Corporation Act adopted in 1998). Joint stock companies have a minimum capital of at least EUR70000, determined in advance, divided into smaller amounts (shares). Shareholders liability is limited to the amount of their contributions and they are not personally liable for the companys liabilities. A notarial deed is required for the incorporation of an AG. There were 1447 AGs incorporated in Austria on 31December 2012 (of which 101 were listed on a stock exchange); The European Company (SE) is a company with a European dimension, and does not strictly fall under the territorial scope of the legislation relating to domestic companies in force in the country where it has been incorporated. European companies are regulated by Council Regulation (EC) No 2157/2001 of 8October 2001 on the Statute for a European company (SE). Pursuant to Article10 of the EU Regulation, the laws that apply to SEs are those that apply to public limited companies (AGs). 20 SEs were registered in Austria at 31December 2012. All rules hereafter described for AGs apply to European companies; Gesellschaft mit beschrnkter Haftung (GmbH) limited liability company (GmbH Act of 6March 1906). The minimum capital of a GmbH is EUR35000, the liability of each participant is limited to a certain amount and they are not personally liable for the companys debts. The articles of incorporation of a GmbH must be notarised. Most foreign-owned businesses operate in Austria under this legal form. There were more than 125900 registered GmbHs in the Firmenbuch at the end of 2012; and Genossenschaft co-operatives regulated by the Co-operative Act of 9April 1873 as amended. A co-operative is a company without a fixed number of members. It should not aim to make profits but rather to assist its members. A co-operative can be founded with limited (which is the norm) or unlimited (which is rare) liability. The legal capability is not limited. The deed of incorporation must be notarised. There were 1833 co-operatives registered in the Firmenbuch on 31December 2012.

6.

Terms of Reference to Monitor and Review Progress Towards Transparency and Exchange of Information.

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Registration requirements
47. According to the Austrian Commercial Register Act (FBG), all companies must be registered in the Firmenbuch. Unless they are registered, companies cannot come into existence. This obligation also covers other entities (see other sections of this report). The FBG does not provide for a timeframe to go to the local court for registration. However while the company is not registered it cannot operate, as registration in the Firmenbuch is a prerequisite to carry on any activity. 48. Information maintained in this register includes (s.3FBG): commercial register number, corporate name, legal form, registered office, name and date of birth of the company representative(s). There are different requirements for registering shareholder details, subject to the type of company: (i)for a GmbH, the identity of all the shareholders must be disclosed to the registration authorities (s.5 of the FBG); (ii)for an AG and SE where there is only one shareholder, the identity of this shareholder must be mentioned in the Firmenbuch (s.5) but if there is more than one shareholder their details are not entered into the Firmenbuch; (iii)for a Genossenschaft there is no requirement to disclose the identity of the members. 49. In addition, the GmbH law specifically states that the identity and date of birth of all shareholders must be disclosed to the Firmenbuch (s.11 GmbH Act) and that all transfers of shares must be disclosed without delay to the local court of justice (s.26(1)). All such transfers must also be effected by notarial deed (s.76 GmbH Act). 50. All entries in the Firmenbuch are published in the Official Gazette of the Wiener Zeitung (s.10 Entrepreneurial Code). This publication contains the full text of the entry in the register. 51. Pursuant to section30 of the Entrepreneurial Code, any change to the corporate name or the companys owners and any change of the registered office must be reported to the registration authorities. Amendments to the registered facts must also be immediately and without delay filed with the court (s.34 of the same code and s.10FBG) and the local court amends the entry in the Firmenbuch accordingly. This means that the identity of all GmbHs shareholders is continuously kept updated in this register 52. All companies are obliged to keep records for seven years (s.212 of the Entrepreneurial Code). In the event of liquidation, all AGs books and papers must be deposited in a safe place, accessible by the court, for a period of seven years after the company has been liquidated. Any shareholder or creditor is allowed to inspect these books and papers upon application by the court (s.214 Austrian Stock Corporation Act). The same rules apply for GmbH (s. 93 of the Limited Liability Company Act) and Genossenschaften (s.51 Co-operatives Act).

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53. In practice, to check the accuracy of the data that is filed before the district court authorities, there are established procedures that are used. The first level of checking is carried out by the notary himself, who submits the documents for registration. This duty is placed upon the notary by the AML laws, which require him to identify and verify the identity of all his clients, including all persons involved in a company. Hence, the identity of all shareholders involved in a company upon registration is checked by the notary in charge of drafting the articles of incorporation. This matter is dealt with in greater detail later in the report in the section dealing with requirements of the AML/CFT law. 54. Upon receipt of these articles, the district court authorities also carry out a formal and substantive check. The President of the court along with its Administrative Directors are also responsible for ensuring the correctness of the data that is filed before the district court and in practice, this is ensured by an internal division of the court dedicated to these functions. Once the application is received at the district court, the application is checked by the staff, to ensure that all the documents that need to accompany the application are there. It is then forwarded to one of the judges, who will have it substantively checked. Once this has been done, and before officially registering, the Director inspects the records to see that the procedures have been correctly followed. The entire process of registration by the district court takes three days to a maximum of one week from the date of receipt. 55. Upon registration the district court authorities are not empowered to carry out on-site visits to check the veracity of information filed. However, in the event of a potential fraud being detected, the district court can ask the tax authorities to carry out on-site visits. Austria has reported that there is no way to filter out statistics to indicate how many on-site visits were carried out at the request of the district court authorities. 56. In addition to the functions relating to the creation of a company, if the district court discovers a case where the company has either not carried out registration formalities or has not provided updates, the court can apply a sanction. The sanction is between EUR700 to EUR3600. The district court authorities have reported that in 2012, in 21305 cases, compulsory sanctions were applied for not providing annual balance sheets in time (50621 in 2010 and 28834 in 2011). Statistics for penalties that may have been levied for other breaches are not available.

Information held by companies


57. Pursuant to section61 of the Austrian Stock Corporation Act, an AG must keep a share register. This register must contain the following information: identity and address of the shareholders and in the case of a natural person the date of birth, in the case of legal entities, the register and

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number under which the legal entity is registered (included, when such company is registered abroad); and number of shares held. 58. If registered shares are transferred to another party, cancellation and new registration in the share register will take place upon notification and evidence. 59. Genossenschaften are subject to the same requirement (s. 14 Co-operatives Act) and must maintain a register indicating for all co-operative members, their full names, marital status, date of joining and leaving and number of shares held. This register is open for inspection. 60. Austria has reported that the responsibility for ensuring that companies carry out the obligation upon them to maintain this information lies with the management (Vorstand) of the stock company who is responsible for maintaining in a proper manner this register. This is one of the duties of the management in order to organise and run the company and the management is primarily responsible to the supervisory board that is charged with the responsibility to supervise how the company is run. The system as it exists is adequate as any loss or damage that may be caused by not maintaining a share register will expose the management to a liability. In practice, from the assessment performed, it appears that the holders of nominal shares become shareholders and are entitled to exercise their rights as shareholders only after registration. Since the general meeting has to be convened once a year, the management will not expose itself to the risk of not properly maintaining the share register. Its failure to do so would make it difficult to pass legally effective resolutions at such general meetings. Such general meetings are attended and supervised by a public notary. Practical experience has shown that the mechanism works well and ensures that the companies maintain this information in accordance with their obligations.

Tax requirements
61. must: Pursuant to sections 119 and 120 of the Fiscal Code (BAO), taxpayers disclose circumstances which are relevant to the existence and the scope of any tax liability (s.119 (1)). The disclosure should in particular be achieved by way of tax returns, registrations, notifications and provision of other information (s.119(2)); and notify to their tax offices all circumstances which justify, change or end their personal tax obligations in respect of income tax, corporate tax, VAT and taxes on capital (s.120).

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62. Considering the legal requirements set out in ss.119 (1) and 120, all business activities and all other relevant changes which have an effect on the Austrian tax liability must be disclosed to the Austrian revenue authorities. This includes in particular the start and termination of any activity. There is however no obligation to provide detailed ownership information as it has no direct effect on the tax liability of companies in Austria. 63. The application for registration or the notification of any change must be file within one month of the event requiring the notification of the tax office (s.121 of the BAO). 64. In addition, pursuant to sections 133 and 134 of the BAO companies must submit an annual corporate tax return by the end of the month of April following the assessment period. This return does not however contain any information on the companies shareholders. Dividends and other assimilated income with its source in Austria are subject to a final withholding tax (capital yield tax) at a flat rate of 25%. The withholding agent is liable to pay the tax within one week of the payment of the dividend to the recipient. He also has to register electronically with the competent tax office within a week of the payment of the dividend, indicating whether or not capital yield tax has to be withheld. If it has not been withheld, he has to provide reasons. Failure of withhold the tax and payment to the tax office, will deem the withholding agent to be guilty of tax evasion and the penalties of up to EUR5000 may be levied upon him. In addition, the recipients will be ordered to pay the capital yield tax. 65. As mentioned above, all companies must first register themselves with the Firmenbuch before registering with the tax authorities. Once registered for commercial purposes, the district court authorities then send the information, electronically, to the tax authorities. When doing so, the district court provides the tax authorities with the details that have been filed by the company, including details of the founding members, the balance sheets and all the other details that are submitted at the time of registration together with the unique number that has been assigned to the entity by the Firmenbuch. 66. On receipt of this information, the tax authorities once again check the correctness of the information that has been provided. Furthermore any new business is obliged to inform the Tax Administration about the establishment within one month. Following this, the tax authorities issue a notice to the company seeking additional details like the balance sheet or proof of business activities. For the registration one of the following forms must be filed with the tax authority: Form Verf 15 or Verf 24. The articles of association, the opening balance sheet, an excerpt of the company register, an identification card of a managing director and a specimen signature sheet of the representatives must be filed as attachments. These documents will be checked at a desk audit, including the correctness of the company registration

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information. The company has one month to provide these details to the tax authorities. Failure to provide this information can result in the imposition of a one-time penalty of EUR300. The tax authorities reported that the level of compliance by companies in respect of the information sought by them in this regard, is very high and that its practical experience has shown that penalties are rarely levied 67. Before registration for tax purposes, the tax authorities carry out on-site visits in the case of all newly founded companies, to check the correctness of the details filed by the company. Once registered, the company is assigned a Tax Identification Number (TIN). A further unique number is also assigned for VAT purposes. This process ensures that there is a double check of the details filed by the company (through its reply to the notice and the on-site visit), even after the checks that are carried out by the district court authorities. Austria has reported that in 2011 a total of 13178 on-site visits were conducted by the tax authorities on all legal forms of companies (13012 in 2010). 68. Tax returns, and VAT returns, must be filed by companies electronically. If the company is for some reason unable to file its return by the due date, it has to seek an extension from the tax authorities. In case the extension is not granted and yet the return is filed beyond the due date, a penalty of EUR300 may be levied. Penalties could be on-going in nature, in the sense that they are levied for the period that the breach continues, but the total penalty levied cannot exceed EUR5000. In case the company fails to file its tax return, the tax authorities can resort to the estimation of income in order to determine the companys liability to tax. Besides the estimate itself, an additional tax at the rate of 10% is levied in such cases as also in cases of late filing of tax returns. Austria has reported that in 2010, the penalty levy was resorted to in 12247 cases (12751 in 2009 and 13355 in 2008) and estimation was made in 62634 cases (69416 in 2009 and 70237 in 2008) (these figures cover all taxpayers, companies and individuals included). 69. The audit of companies is usually done on the basis of a risk assessment, which depends on the type of business carried out and other factors. Audits could be desk audits or could call for on-site visits. On-site visits are carried out when there is a need to check the correctness of some claims made or contents of documents. During the course of an audit, the audit teams can ask for all relevant documents and auditors are empowered to take copies of these documents. This covers accounting records as well as documents dealing with ownership information such as deed of incorporations, articles of associations or share registers. 70. Taxpayers are obliged to provide documents to the tax authorities for the past seven years and for the past ten years in cases involving tax fraud. Failure to provide these relevant documents to the tax authorities can invite

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a penalty of up to EUR5000. In 2011, the Austria tax authorities carried out 1660 on-site inspections of limited liability companies (1439 for 2010). Looking at the practices in Austria, in this regard at a broader level, in the year 2011, there were a total of 13178 on-site visits conducted by the tax authorities in respect of all companies (13012 in 2010). The total number of internal audits (desk audits) conducted in 2012 was 527185 (452191 in 2011 and 364326 in 2010). The cumulative number of audits that were carried out in the three year review period, in the case of taxpayers showing income from business may be tabulated as below.
2009 total number of cases on-site audits VAT audits desk audits total number of audits percentage of businesses audited 2010 2011 2012 1189 179 1202 832 19075 16470 348796 384341 32% 19780 14906 364326 399012 33% 1178 213 1217 952 19957 13515 452191 485663 41% 16452 12496 527185 556133 45%

In respect of other taxpayers, the position is as below.


total number of cases audits percentage of other taxpayers audited 2009 657714 16% 2010 634120 16% 2011 638348 16% 2012 607347 15% 3951 861 3909 828 3875 437 3800 250

71. The Austrian tax authorities have advised that the level of payment compliance of taxpayers is very high, as at November 2012, as much as 97% of the tax collections are paid voluntarily. Austria has reported that approximately 81% of the taxes assessed after audit (should they be desk or on-site audits) are paid on time. As for the compliance of the taxpayers filing returns, Austria has reported that in 2010, 1747 353 taxpayers filed tax returns after the tax authorities initiated the process of filing of returns (1740 396 in 2009 and 1747353 in 2008) and that in addition another 95490 returns were filed voluntarily by the tax payers without the need for tax authorities to initiate the process the filing of returns, in 2010 (108938 in 2009 and 115854 in 2008). In 2010, in 268948 cases tax returns were filed after action taken by the tax authorities (267604 in 2009 and 284488 in 2008). This action includes automatic reminders, manual reminders and penalty reminders (see above for the number of sanctions applied).

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72. In summary, the high level of compliance of Austrian taxpayers coupled with strict registration processes ensures that information necessary to assess the tax situation of taxpayers will be available either directly with the tax authorities or in the books and documents that have to be maintained by taxpayers themselves.

Disclosure of major shareholdings


73. EU Directive 2004/109/EC of 15December 2004 was transposed into Austrian legislation through section91 of the Austrian Stock Exchange Act. That law calls for the publication of major shareholdings in issuing bodies whose shares are eligible for trading on a regulated stock exchange (primarily AG and European companies). 74. Pursuant to the same section, any natural person or legal entity that directly or indirectly acquires securities conferring on it voting rights of 5% or more must so advise the issuer, the Austrian Financial Market Authority, and the stock exchange company within two working days. Such notification is also required when the number of voting rights reaches or exceeds 10, 15, 20, 25, 30, 35, 40, 45, 50, 75 or 90% of the companys shares, including bearer shares. 75. The effect of this obligation is that all shareholdings in excess of 5% in listed Austria companies are publicly known.

Foreign companies
76. When a limited liability company or a joint stock company with its registered office abroad maintains a branch in Austria, it must be registered in the Firmenbuch (s.12 Entrepreneurial Code, s.107 Limited liability Company Act). When such company does not have its seat of effective management in an EU Member State or in a State party to the Agreement on the European Economic Area, this company must appoint at least one person resident in Austria responsible to represent the company in Austria. 77. In such case, the applicant must provide, for registration, a copy of the companys article of association and, if such articles are not written in German, a certified translation of these articles (s. 107 Limited Liability Company Act). However, there is no requirement to provide any details of shareholders as there is for domestic companies. 78. When a company registered abroad has its seat of effective management in Austria: when the company is registered in another EU country, this company must be registered as a branch in the Firmenbuch. In such cases the information to be provided upon registration is the same as described above;

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in other cases, s.10 of the Austrian law on international private law is applicable. The law that applies to these companies is the law of the country where they have their seat of effective management. In Austria, these companies, in any cases, are considered as partnerships under civil law. In that case, registration in the Firmenbuch is only required when the annual turnover is over EUR700000 (s.189 of the Entrepreneurial Code). When they go to the local court for registration, these companies must chose the legal form under which they want to be registered7 and provide the level of information corresponding to that legal form (see paragraphs 45 et seq.). Austrian authorities have advised that in practice the unlimited liability of foreign companies shareholders makes the number of foreign companies with their seat of management in Austria very limited. Foreign companies usually prefer to set up a subsidiary in Austria.

79. Finally, foreign companies must also disclose all facts and circumstances that are relevant for tax purposes (ss.119 and 120 BAO). However, for tax purposes these companies are not always considered as partnerships under civil law. If they are comparable to companies according to Austrian law they are treated as companies for Austrian tax purposes. According to the Corporation Tax Act (s. 1), companies, even those incorporated abroad, having their place of effective management in Austria are taxable on an unlimited basis. To this extent, they must register with revenue authorities and provide the same level of information as similar Austrian domestic companies have to provide, in particular all facts that are relevant for tax purposes. For companies, there is however no obligation to provide detailed ownership information as it has no direct effect on the tax liability of companies in Austria (in the situation where such foreign companies would be registered for tax purposes as partnerships such information would be available due to the filing obligations concerning partnerships). Branches of foreign companies also have to be registered with revenue authorities even if their tax liability is limited to Austrian source income. 80. Most foreign companies operate through subsidiaries which are covered by the provisions relating to domestic companies. This is as a consequence of the legal framework as described above which results in the number of foreign companies that operate through branches being low. The district court authorities do not however, maintain any statistics on the number of such foreign companies operating in Austria. Therefore, it has not been possible to verify the views of the Austrian authorities. However, as detailed below, the
7. GesbR cannot be registered as GesbR in the Firmenbuch in Austria. Foreign companies must then chose one of the legal form that can be registered in the Firmenbuch. This can be the form of a joint stock company, limited liability company, co-operative, limited partnership or general partnership.

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Austrian authorities have been able to collect information relating to branches of foreign companies. 81. The procedure for foreign companies to register with the Firmenbuch is no different from that for domestic companies. As regards the requirements of registering with the tax authorities, they are the same as for domestic companies. Hence, the position regarding availability of ownership information in relation to foreign companies is no different from that for companies incorporated in Austria. 82. In the last three years, Austria has received 13 EOI requests concerning ownership of foreign companies, of which they were able to answer 12. In the one case that information could not be provided, Austria states that the matter is pending at the local tax office and is being actively followed up Austria has reported that it has sent a reminder to the local tax office concerned but the information has not yet been received, given the complexity of the case. The requesting jurisdiction has been informed of the situation. Peers have not reported any specific issue in relation to the provision of ownership information pertaining to foreign companies. This indicates that in practice Austria is able to obtain ownership information about foreign companies to a reasonable level.

Ownership information held by service providers Anti-money laundering requirements


83. In Austria, anti-money laundering provisions are set out in legislation implementing EU Directive 2005/60/EC. This legislation has been developed in the laws regulating professionals subject to AML requirements. The following entities and professionals are, amongst others, covered by AML obligations: credit and financial institutions, and investment companies under the Austrian Federal Banking Act (BWG ); lawyers under the Solicitor-Advocates Code (RAO); civil law notaries under the Civil Law Notaries Code (NO); auditors under the Austrian Accountancy Act (BibuG); tax consultants and auditors under the under the Professional Chartered Accountant Act (WTBG); and trusts, Treuhnder or company service providers when providing certain services to third parties8 (see s.365m Austrian Industrial Code GewO).

8.

This includes when creating a legal person, acting as director of a legal person, or providing a registered office or a business office to legal persons.

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84. Pursuant to sections 40 of the BWG, 8b of the RAO, 36b of the NO, 98b of the WTBG, 79a of the BibuG, and 365m of the GewO, these entities and professionals are required to perform customer due diligence (CDD) and therefore identify their customers and clients when: establishing a continuous business relationship. This must also be done for existing customers on a risk assessment basis; carrying out occasional transactions amounting to EUR15000 or more, whether the operation is carried out in a single operation or in several operation which appear to have ties; there is a suspicion of money laundering or terrorist financing, regardless of any derogation, exemption or threshold; or there are doubts about the veracity or adequacy of data identifying the contracting party or beneficial owner.

85. Pursuant to the same article, the identification and verification of the identity of the customer must be ascertained by the personal presentation of an official photo identification document issued by a government authority. Where the customer is a company or other entity, the identity must be ascertained on the basis of a meaningful supporting document which is available under the usual legal standards of the country in which the legal person is incorporated. In addition, the identity of the natural person competent to represent this legal entity is ascertained by the presentation of an official photo identification document. 86. In addition, persons and entities covered by the CDD requirements must identify all beneficial owners (s.40BWG, s.8d RAO, s.36d NO, s.98b WTBG, s.79b BibuG, s.365o GewO). Beneficial owner is defined in each applicable law according to the definition included in the Third EU Antimoney Laundering Directive. 9 Such entities must store CDD and accounting
9. Directive 2005/60/EC of the European Parliament and of the Council of 26October 2005 on the Prevention of the use of the Financial System for the Purpose of Money Laundering and Terrorist Financing. With respect to companies that Directive defines beneficial owner (s.6) to mean the natural person(s) who ultimately owns or controls the customer and/or the natural person on whose behalf a transaction or activity is being conducted. It goes on to indicate that the beneficial owner shall at least include: (a)in the case of corporate entities: (i)the natural person(s) who ultimately owns or controls a legal entity through direct or indirect ownership or control over a sufficient percentage of the shares or voting rights in that legal entity, including through bearer share holdings, other than a company listed on a regulated market that is subject to disclosure requirements consistent with Community legislation or subject to equivalent international standards; a percentage of 25% plus one share shall be deemed sufficient to meet

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material for no less than five years after the relationship has ceased and if the entity ceased activity or is dissolved, the last acting management must ensure that this information is stored in accordance with the terms of the Law. 87. To ensure the implementation of this legislation, public authorities, and in particular the Financial Market Authority (FMA) are in charge of monitoring professionals subject to CDD requirements. See section A.1.6 below with respect to sanctions for non-compliance with these obligations. 88. Looking at the practical implementation of these laws, it consists of two parts. One is the due diligence that is exercised by the notaries, advocates and other similar professionals and the second is the supervision by the FMA on banking and financial entities. The issues connected to the supervision by the FMA on banking and financial entities are discussed under section A.3 of this report. 89. With respect to the due diligence that is to be exercised by professionals, these rules are found in the laws that govern them, such as the Notarial Code and in related guidance. In the case of notaries, when they handle the incorporation of companies, they verify in practice the identity of all the parties involved, including beneficial owners. This is because the Notarial Code requires (i)all parties to a deed to be identified and (ii)notaries to identify their clients in all circumstances. As notaries are in addition personally responsible for any mistake made in deeds in which they have been involved, they comply in practice with these requirements. This verification is based on an official identification such as a passport. Copies of these identity documents are kept in the file that is maintained by the notary for each company for which (s)he is involved in the incorporation. In case a foreign company is a shareholder or a member, the notary seeks the business register of the foreign company. 90. The notarial deed that is drawn up in the course of the incorporation of a company contains the articles of association of the company. In the case of a foreign company being a member, details of the foreign company are also attached. In case of individuals, their identification details are obtained. All this information is retained by the notary. Information that is collected by the notary as part of the AML supervision is shared with the FIU when it is so required by the AML laws. Such situations may arise when the notary feels that there might be a suspicious activity or transaction relating to money laundering or the financing of terrorism. 91. The system of inspection of notaries that has been put in place is such that each notarial office is inspected every three to five years. These
his criterion; (ii) the natural person(s) who otherwise exercises control over the management of a legal entity..

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inspections are carried out by the regional chambers of notaries. These regional chambers set up an audit plan, based on which these inspections are carried out. This audit plan will set out who is being audited and when. The notaries who are being inspected are also bound by the notarial code to provide all cooperation. They have to provide all documents that are called for in the course of the inspection. This is apart from surprise checks that may be carried out. These surprise checks are beyond those that are envisaged as part of the audit plan and take place when some specific information comes to light that may call for such a check. 92. The inspection that has been referred to above, is carried out by other notaries or peers. There is no separate staff maintained for this task. The inspection team usually consists of five to six persons. This could include experts like accountants or IT professionals, if the need so arises. The purpose of these inspections is to check that notaries are fulfilling all their obligations, including the maintenance of escrow accounts (35000 in 2011, up from 32000 in 2009) and those prescribed under the AML law. 93. As for the experience of these inspections, it has been reported by the Austrian Chamber of Notaries that breaches are few and far between. Some breaches have been noticed in the information and documentation that needs to be maintained by the notary. This was related to the CDD that the notaries are bound to carry out in the course of their activities. When such a breach is noticed, disciplinary proceedings are initiated by the Chamber of notaries, which informs the FIU. In the last three years, of the 492 notaries, 329 have been inspected, including 25 surprise inspections. These inspections have resulted in penal procedures in 44 cases. According to the Federal Ministry of Justice, of these 44 cases, one civil law notary has been prosecuted for money laundering. Austria has reported that in this particular case, disciplinary proceedings were initiated against the notary on the suspicion that he had not complied with the strict duties of establishing and verifying the identity of the party and of the beneficial owner in a non-face-to-face transaction. 94. The Austrian Bar Association has a legal regime (for AML/CFT purposes) identical to that of the notaries. There are nine regional bar associations in Austria. Inspections are carried out by appointed members of the executive committee of the regional bar associations. The powers of the bar association to act as supervisory authority for AML/CFT purposes are laid down in the Lawyers Act. The Bar Association carries out checks on its members, when they have some specific information or suspicion. The check or audit that is carried out, is designed to check whether the lawyer is carrying out all his obligations, including those prescribed under the AML/ CFT regime. The sanctions that follow if a breach is found can vary between a written reprimand to a financial sanction of up to EUR45000. In serious cases, the lawyer could be struck off the rolls of the association.

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95. The Bar Association has in the last three years discovered three cases, in the course of their inspections, where breach of AML/CFT provisions has occurred. Disciplinary proceedings have been initiated in all cases. All Austrian attorneys have escrow accounts and these accounts are also reviewed in the context of inspections carried out by regional bar associations. The register of escrows is maintained in electronic format. All clients must be informed of their registration in the register of escrows. In its EOI experience, Austria has reported that it has asked lawyers and notaries to provide information and it has never faced a problem in this regard. 96. Another body that operates as supervisors for AML/CFT purposes is the Chamber of Chartered Public Accountants and Tax Consultants. This set of professionals provides services that include, tax related consultancy, counselling, book keeping, payroll services and representation before tax authorities. As for their role in setting up legal persons or arrangements, this is limited to providing financial data. 97. In their role as supervisory authorities for AML/CFT purposes, they have developed some special guidance and some special questionnaires for their clients. This covers identification of the persons involved and some risk assessment for AML/CFT purposes. The identification documents that they collect include personal identification, company registers, details of beneficial ownership etc. These details have to be maintained by the accountants for seven years. 98. On the issue of internal controls, the Chamber for Chartered Accountants does not have the powers to conduct any inspections on its members. For this task, there is another Quality Assurance Authority for auditors. This authority inspects all auditors for listed companies once in three years and other auditors are inspected once in six years. Any shortcoming needs to be attended to by the inspected auditor in six months to a year depending on the facts of the case. The Quality Assurance Authority can also report the matter to the Chamber who may take disciplinary action against the auditor. Practical experience has shown that CDD obligations are satisfactorily fulfilled by the Chartered Accountants in Austria. Austria has reported that it is contemplating legal amendments that will allow the Chamber of Chartered Accountants to also carry out inspection of its members. Austria has reported that in the course of answering EOI requests it has asked Chartered Accountants to provide information and it has never faced any difficulty. The details of the inspection carried out by the Quality Assurance Authority are tabulated below.

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2009 Number of instances where quality inspection did not reveal any breaches Denial of such confirmation Number of entities receiving an order of measures for improvement after the quality inspection Number of entities with extra inspection 10 0 9 1 2010 213 0 190 13 2011 179 5 132 42

99. It is noticed that there is a significant difference between the number of inspections in 2009 and 2010. Austria has explained that prior to 1January 2011 auditors had to participate in a quality inspection successfully. However, on 1January 2011 a transitional provision was phased out so that all auditors had to obtain a confirmation on a successful participation in a quality inspection in order to be allowed to exercise their profession. Therefore the number of quality inspections rose considerably between 2009 and 2010 so that all auditors fulfilling the prerequisites could obtain the above-mentioned confirmation. 100. One or more professionals subject to AML/CFT requirements are always involved in the creation of companies and foundations and may also be involved in drafting deeds relating to other entities or arrangements (see below regarding partnerships, Treuhand and trusts). When these persons are involved in these processes, it means that the parties to the deeds or contract will always be identified and this identity further verified by the requirement for each person to provide corroboratory evidence of their identity. In practice, this means that when these deeds or contracts are submitted to government authorities, ownership information contained in these documents has already been verified, giving broad assurance that it is accurate.

Nominees
101. Nominee ownership is regulated by the rules on the fight against anti-money laundering. According to section365m of the GewO, both natural and legal entities and registered general partnerships, particularly corporate consultants acting in the role of a nominee shareholder for another person, are subject to AML/CFT requirements. They must, as a consequence, perform CDD, identifying the person for whose benefit the shares are held. Thus, when someone is acting as a nominee, it is possible to obtain the identity of the beneficial owners of the shares. 102. Nominee ownership is regulated by the AML/CFT legal framework in Austria and therefore the practices described above also apply in respect of nominee ownership. During the on-site visit professionals confirmed the extremely narrow scope of nominee ownership. They reported that to the

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best of their knowledge, non-professional nominees are not likely to exist in Austria and, more broadly, no issues were reported with regard to nominee ownership information. Austrias tax authorities also advised that they have never received any incoming request dealing with nominees but are ready to use their information gathering powers to collect such information if so requested by a treaty partner. The ability of Austrias tax authorities to exchange information relating to nominee ownership should be monitored by Austria on an on-going basis.

Conclusion
103. Considering legal obligations imposed by the various legislation in force in Austria, FBG, Entrepreneurial Code, laws regulating each type of company, and tax requirements: an AG is required to provide the identity of its shareholder to the registration authorities where such a company has a single shareholder. In all cases, AGs must maintain up-to-date share registers in which the identity of all holders of registered shares must be indicated. In addition, the identity of any shareholder owning more than 5% of an AG listed on a stock exchange must be disclosed to the company, to the Financial Market Authority, and to the stock exchange company; Genossenschaften are required to maintain up-to-date registers of their members; the identities of all GmbH shareholders must be disclosed to the registration authorities upon registration and updates must be provided; branches of foreign companies are also required to be registered in the Firmenbuch. Foreign companies having their registered seat in an European Union country and their place of effective management in Austria must be registered in the Firmenbuch as branches. In other cases, when these companies have their seat of effective management in Austria, they are registered in the Firmenbuch when their annual turnover is beyond EUR700000; and all these entities are subject to further tax requirements. They must be registered with the revenue authorities. Any changes of relevance for taxation must also be notified to revenue authorities within one month of the event. There is however no clear requirement to provide the identity of shareholders or members in companies upon registration.

104. The practical application of the legal requirements is effective. The practical standards enforced by the registration authorities, service providers and the tax authorities are such that ownership and identity information in

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respect of companies is available and easily retrievable in Austria. Apart from this, the peer input received indicates that Austria has been able to provide ownership information, whenever requested by its treaty partners. In the three year period under review, ending 31December 2011, in addition to the 13 requests received in relation to foreign companies, Austria received nine requests that concerned ownership information in respect of Austrian companies. Austria reports that it has responded to all these requests.

Bearer shares (ToRA.1.2)


105. Pursuant to the old section10 of the Stock Corporation Act, AGs (as well as SEs) may choose to issue their shares either in nominative or bearer form. It has not been possible to get any information regarding the number of Austrian companies that have issued bearer shares Nevertheless, there were several mechanisms ensuring that information on bearer share holders identities was available under certain circumstances: an AG was required to provide the identity of its shareholder where such company had a single shareholder; for publicly-listed joint-stock companies, as described above, a duty of notification existed for shareholders who own 5, 10, 15, 20, 25, 30, 50, 75, or 90% of the companys shares, including bearer shares (section91 Austrian Stock Exchange Act. Pursuant to the same legal provision, a company in this situation was obliged to provide without delay (less than two trading days later) this information to the Austrian Financial Market Authority (FMA), the stock exchange company and the issuer; and financial institutions and certain non-financial businesses and professions were subject to the obligations in the AML/CFT Act, and had, therefore, to identify customers, including those who open securities portfolios.

106. In 2011 Austria amended its Company Law10 to address the fact that no ownership information on holders of bearer shares was available in Austria. The law provides that listed companies can still issue bearer shares for the purpose of being listed. However, no individual bearer shares will be issued and all these shares will be certified by global certificate(s). A publicly listed stock corporation must deposit the global certificate(s) with a securities custodial bank. The global certificate will not contain the names of the shareholders but will contain details of the bank where the certificates are deposited. The bank where the share certificates are deposited will have to
10. Gesellschaftsrechtsnderungsgesetz adopted on 7July and July 21st by the two chambers of the national assembly and entered into force on August 1st 2011.

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keep the ownership details in respect of the bearer shares as they are required to do so under the AML/CFT law (see section A.3 of this report). Thus, for listed companies, identity details in relation to the owner of all shares will be known from 1January 2014. 107. In contrast, for unlisted companies, the issuance of bearer shares is prohibited from 1January 2014. From this date, companies are allowed to issue only nominal shares (registered shares). All shares that qualify as registered shares must be entered in the companys share register. This share register must contain information that includes (i)the name, date of birth and the relevant address of the shareholder, (ii)number of shares or share numbers, (iii)for companies that are not publicly listed, a bank account into which payments of dividends must be made and (iv)if the shares belong to a person other than the one listed in the share register, then all the above information, in respect of that other person. In addition, the law states that after 1January 2014, bearer shares cannot be traded or sold without complying with the new registration requirements. If they do not, the shares shall be deemed to be registered shares. In the meantime, from the entry into force of the law (1August 2011) until 31December 2013, bearer shares can still be issued. 108. In addition, while the conversion of bearer shares must be completed by 1January 2014 and the holders of bearer shares whose shares are not converted by this date will lose their rights in the company from that date, the holders will be entitled to recover them without any time limit upon disclosure of their identity to the company. The system implemented by Austria does not provide any incentive for shareholders to convert their bearer shares into nominal shares, until such time as they have a need to obtain their rights in the company. In the meantime there is nothing to prevent them from transferring the shares to another person (until 31December 2013) who may then claim them as their own without identifying the former owner. Austria has stated that after 1January 2014, the owners of bearer shares cannot exercise their rights. However they remain owners of their shares in the company and remain entitled to be registered as shareholders later on. Austria is of the view that in practice bearer share certificates will still be helpful in proving the ownership of the shares, but if any doubts arise, the shareholder will need other means to prove their rights, e.g.presenting the relevant contracts to show how they became owner of the shares. In Austrias opinion the incentives for bearer shareholders to convert their shares are very strong, because shareholders who do not convert their shares before the end of 2013 will have to prove their entitlement by other more complicated means than by simply presenting their bearer shares who will by then have lost their validity to represent the proportion of the shares owned. 109. Although Austria has made some efforts in seeking to ensure the availability of ownership information relating to bearer shares, the review

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of the provisions has highlighted that the safeguards that have been built into the new system, to ensure its success, are not as strong as they could be. There are no requirements on the company to obligate the holders of bearer shares to comply with the new legal requirements and no effective sanctions for a shareholder not complying with these obligations. Austria has reported that, as of 31December 2012, 1346 joint stock companies were not listed and might be covered by these new rules if they have issued bearer shares. Austria also expects that by June 2013, 40% of its non-listed companies will have converted their bearer shares into nominal shares. But there is no tracking system in place whereby the accuracy of this conversion process may be followed. 110. The Austrian authorities consider that since it will not be possible to utilise the voting rights, trade these shares, or benefit from the payment of dividends, shareholders will comply with these requirements and deposit their bearer shares for conversion to nominal shares. The Austrian authorities also feel that unless companies can set their house in order on this matter, it will not be possible for them to convene meetings of shareholders for approval of the annual report, although in companies where a bare majority of the shares are nominal it would continue to be possible to convene meetings of shareholders. 111. In conclusion, it may be said that Austria has taken steps to address the gap that was identified in respect of bearer shares and the Austrian authorities believe that in most instances bearer shares issued by non-listed companies are likely to be converted by shareholders within the defined period of time. As has been stated above, there were 1346 joint stock companies not registered in a stock exchange that are obliged to convert to nominal shares. Austria has reported that according to their National Numbering Agency (OeKB) that provides International Securities Identification Number (ISIN), 448 ISINs for bearer shares have been issued for 378 entities. However, the lack of incentive and sanctions does not ensure that from 1January 2014 the identity of all holders of shares in unlisted joint-stock companies will be known in all instances.

Partnerships (ToRA.1.3)
112. There are three main forms of partnerships that can be set up in Austria: Offene Gesellschaft OG general partnership (ss.105 to 188 Entre preneurial Code (UGB)) An OG is a partnership formed by at least two partners who are jointly and severally liable for all its commitments. No minimum capital is required to form an OG. The

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partnership may be formed by notarial or private deed. There were 18000OGs registered in the Firmenbuch on 31December 2012; Kommandit Gesellschaft KG limited partnership (ss.105 to 188 UGB). A KG is a partnership formed by one or several partners who are jointly and severally liable (the active or general partners), and one or more limited partners (the dormant partners) whose liability is limited to the level of their contribution. Limited partners cannot engage in management activity, even through a power of attorney. No minimum capital is required to form such a partnership and the articles of incorporation can be under a notarised or private format. There were 42700 KGs incorporated in Austria at the end of 2012. Gesellschaft brgerlichen Rechts GesbR (Civil Law Partnership), an association of at least two natural persons who wish to combine their knowledge or property in a particular field. This partnership under civil law is not a legal entity and each partner is jointly and individually liable to the debts of the partnership. A partnership under civil law is established by written, oral, or implied agreement between the partners, who may act in their own name or on behalf of the partnership. While not having legal status, a GesbR is a relevant entity for tax purposes in Austria. The calculation of the partnership profit is made at the partnership level and further split between the partners. There are 11000 GesbR registered in Austria.

113. Austrian legislation also allows for the creation of a stille Gesellschaft (silent partnership). Under a stille Gesellschaft, a person makes an equity contribution into another persons business. This arrangement can be characterised as a contract, and like a contract, its existence is not disclosed to the public. These partnerships do not have any legal capacity and personality. Therefore, they cannot act as entities separated from their partners and cannot hold real estate or assets. They have no income or credits for tax purposes, do not carry on business and cannot be compared to a limited partnership. Therefore these arrangements are not under the scope of the Terms of Reference.

Registration requirements
114. According to the Austrian Commercial Register Act (FBG) legal entities must be registered in the Firmenbuch. This obligation also covers OGs and KGs (s.2) and unless they are registered, these two types of partnerships cannot come into existence. The FBG does not provide for a timeframe to go to the local court for registration. However, while the partnership is not registered it cannot operate as the registration in the Firmenbuch is a prerequisite to carry on any activity.

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115. The information maintained in the Firmenbuch includes (s.4FBG): commercial register number, corporate name, legal form, registered office, name and date of birth of the partnerships representative. In addition, the identity and date of birth of all partners with limited and unlimited liability must be entered in the business register, making OGs and KGs ownership information available upon registration. 116. Any entry in the Firmenbuch is published in the Official Gazette of the Wiener Zeitung (s.10 Entrepreneurial Code). This publication contains the full text of the entry in the register. 117. Pursuant to section30 of the Entrepreneurial Code, any change to the corporate name or the registered office must be reported to the registration authorities. Amendments to the registered facts, such as identities of limited and unlimited liability partners, must also be immediately filed with the court (s.10 FBG). This means that the identity of all partners of OGs and KGs must be kept up-to-date in the Firmenbuch. 118. GesbR are not required by law to be registered either in the Firmenbuch or in any other public register. 119. The procedure for partnerships to register with the Firmenbuch (wherever required), is the same as that in respect of companies. As in the case of companies, the Firmenbuch receives the documents in electronic form. These documents are then checked by the court authorities and the judge. Once the district court authorities are satisfied with the veracity of the documents that have been provided, they register the partnership. This process, as with the registration of companies, takes between three days to a week to complete.

Information held by partnerships


120. There is no obligation under Austrian legislation for OGs, KGs and GesbR to maintain registers of partners.

Tax requirements
121. must: Pursuant to sections 119 and 120 of the Fiscal Code (BAO), taxpayers disclose circumstances which are relevant to the existence and the scope of a tax liability (s.119(1)). The disclosure should in particular be achieved by tax returns, registrations, notifications and provision of other information (s.119(2)); and notify to their tax offices information concerning all circumstances which justify, change or end their personal tax obligations in respect of income tax, corporate tax, VAT and any other taxes.

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122. For registration by the revenue authorities, all partnerships must file a Verf 16 form. This obligation covers OG, KG and GesbR. As indicated on this registration form, a copy of the articles of association/partnership statutes must be provided to the revenue authorities11. In addition, the identity of any partners must be disclosed. The identification information includes the name of the investor, his/her date of birth, address and the percentage of capital held. 123. The application for registration or the notification of any change must be filed within one month of the event requiring the notification of the tax office, as mentioned on the form to be filed (form Verf 60 in that case). 124. In addition, while being transparent entities for tax purposes, pursuant to sections 133 and 134 of the BAO, partnerships (OG, KG or GesbR) must submit an annual declaration of income (form E6) by the end of April following the assessment period including details on the partners identity. This information is of high importance to ensure the taxation of the partnership profits within the hands of each partners according to the percentage of capital held. 125. As all partnerships carrying on business in Austria or receiving income from Austrian sources are relevant entities for tax purposes, this means that these partnerships, whether incorporated in Austria or in a foreign jurisdiction, are subject to all tax requirements set out in s.119(1) and 119(2) of the BAO. 126. In the case of partnerships, the registration procedures in respect of tax authorities are the same as those for companies. As in the case of companies, the tax authorities can carry out on-site inspections of partnerships. While registering with the tax authorities, partnerships will have to provide details of the respective contributions of the partners. In practice, this is done very consistently. In 2011, the tax authorities have carried out 624 inspections of limited partnerships (559 for 2010). This was just 4.74% of the 13178 onsite inspections carried out in 2011 (4.3% of the 13012 for 2010). 127. As for the records that are maintained by the tax authorities in respect of partnerships, a common database is maintained in respect of all entities, including partnerships. The correctness of the data that is maintained by tax authorities will be checked when an audit is taken up. The penalty for not filing the Verf 16 and/or the Verf 60 form is up to EUR5000. It could also lead to the estimation of income. Late filing of these forms will attract an additional tax of 10%. The details that are contained in the Verf 16 and Verf
11. Where no written articles of association exist (for instance in the case of a GesbR), the main content of the oral agreement must also be disclosed pursuant to ss.119 and 120 of the BAO.

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60 forms are cross checked by the tax authorities, with the details that are provided by the district court authorities. The tax authorities may also carry out an on-site visit in this process. These procedures ensure that any detail in relation to partnerships and in particular the identity of its members will be maintained in a proper and accurate manner by the tax authorities.

Ownership information held by service providers


128. The obligations on service providers, described previously in section A.1.1 of this report, are equally relevant for partnerships. Lawyers, civil law notaries, as well as all professionals deemed to be company service providers, fall specifically within the scope of application of the AML/CFT requirements when they establish a business relationship with their clients and when they assist clients in the preparation or conduct of transactions. These service providers must identify their clients and retain for five years information on the identity of their clients and those beneficial owners who own/control at least a 25% interest in a client12, as well as all information regarding transactions conducted. 129. The practical applications of the obligations on service providers are the same as has been described in the case of companies. Here also the service providers will establish and verify the identity of the parties. The details of the individual members of the partnership will be available with the notaries and lawyers who have registered the partnership. This will be so in cases where the partnership is set up by an oral agreement also.

Conclusion
130. Information that OG and KG in Austria must provide upon registration includes the identity of their partners and this must be updated in the Firmenbuch. OG, KG but also GesbR are also relevant entities for tax purposes. Thus, revenue authorities receive information on partners in a partnership on an annual basis, through the compulsory declarations that partnerships must file. Any change in the facts that are of significance for tax purposes must also be disclosed within one month of the event to revenue authorities. This includes partnership ownership information as partnership profits are taxed within the hands of the partners. These different avenues ensure partnerships ownership information is available in all circumstances. 131. The practical application of the legal requirements is effective. The practical standards that are enforced by registration and tax authorities are such that ownership and identity information in respect of partnerships is available and easily retrievable in Austria. As mentioned above the identity
12. For the definition of beneficial owner see footnote 9.

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and ownership information is available with the court authorities and the service providers as well as the tax authorities. Peer inputs received also indicate that Austria was able to exchange information when it was sought by the treaty partner. During the three year period under review, Austria received one request concerning ownership information on partnerships, which it was able to answer to the satisfaction of its treaty partner. Austria has received 13 requests in 2011 concerning other aspects of partnerships like accounting information (12 in 2010 and 16 in 2009).

Trusts (ToRA.1.4) and Treuhand


132. Austria, as a civil law jurisdiction, does not have the concept of trusts. Its law does not recognise this concept and Austria has not signed the Convention on the Law Applicable to Trusts and on their Recognition (1July 1985, The Hague).13 There are, however, no obstacles to prevent an Austrian citizen or service provider from acting as a trustee of a foreign trust or preventing a foreign trust from owning assets in Austria. 133. It is also possible in Austria to set up Treuhand. The Treuhand is a civil contract which is not regulated in law, but is based on the general principle of the autonomy of the contracting parties (i.e.the ability of any person to enter into any contract which whomsoever they chose) and delimited by jurisprudence and doctrine. A Treuhand does not have any legal status. It is created when a person, the Treuhnder, is authorised to exercise rights over property in his or her own name, on the basis of and in accordance with a binding agreement with another person, the Treugeber. There are two main types of Treuhand; the Fiducia and the Ermchtigungstreuhand. With the Fiducia most of the rights connected to the assets are transferred to the Treuhnder, whereas the Ermchtigungstreuhand only entails a transfer of certain rights connected to the assets such as the right to manage them. The Treuhand can exist without any written record. It can be concluded between any two persons who have the necessary legal capacity to conclude to a contract. The Treugeber and the Treuhnder may chose to inform third parties of the legal arrangement between them (offene Treuhand or open Treuhand ) or not (verdeckte Treuhand or hidden Treuhand ).

Registration requirements
134. As regards the availability of information regarding settlors, trustees and beneficiaries of trusts, Austrian legislation does not require registration or disclosure of this information to government authorities because Austrian legislation does not recognise trusts. Further, Austrian legislation does not contain
13. www.hcch.net/index_en.php?act=conventions.text&cid=59, accessed 2May 2011.

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any provisions detailing what information trustees resident in Austria have to maintain on the foreign law trusts they administer, which will remain subject to the requirements imposed by the law under which they were created. 135. For Treuhand, there is a partial registration system in place in Austria, which only applies where the Treuhnder is a lawyer or civil law notary and which is also subject to, the nature of the property, and, in the case of funds, their amount: according to s. 10a RAO, lawyers must register every Treuhand of more than EUR40000 at the Register of Escrows of the competent Bar Association. 23000 Treuhnder are registered in this register; and pursuant to the Treuhandregister-Richtlinien (guidelines for the registration of Treuhand ), civil law notaries should register every Treuhand of more than EUR10000 in the digital Register of Escrows maintained by the Austrian Chamber of Civil-Law Civil law notaries. The Austrian chamber of notaries has reported that there were 35439 Treuhand relationships registered in 2012 (35729 in 2011 and 32303 in 2010).

There is no information on Treuhand available in the Firmenbuch. As has been mentioned above, in the case of Treuhand, the registration is, in some instances carried out by lawyers and/or notaries. Where the registration is carried out by lawyers and notaries, the service provider will keep the details of the contracting parties. The notary or lawyer will keep all details of the client and the details of the property that has been registered.

Tax requirements
136. Section24 of the BAO provides that under a Treuhand relationship assets are to be attributed to the Treugeber. Consequently, if a person states that assets are held in a fiduciary relationship, then this person has to provide evidence of the existence of such a relationship in order to avoid the assets or any income derived therefrom to be attributed to him or her for tax purposes. The same rule applies similarly to trusts and settlors. 137. As economic owner of the assets (the legal owner being the Treuhnder), the Treugeber must report to the tax authorities all earnings deriving from the Treuhand. In particular, a Treugeber is obliged to report to the tax authorities about all facts relevant for his taxation (ss.119 and 120 of the BAO) and to file a tax return (s.134). Similarly, the same rules apply to the settlor of a trust. 138. Trustees or Treuhnder resident in Austria may also be taxpayers subject to the provisions of Austrian tax law, and in particular sections 119 and 120 of the BAO stating that any persons must disclose to the revenue authorities facts and circumstances that are significant for taxation and all

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information needed to determine the tax liability of these persons can be requested by the revenue authorities (see in particular sections 143 and 161 to 165 of the BAO further described in section B.1 of this report). Further, these powers can also be used to answer incoming requests for information. This means that a trustee or a Treuhnder resident in Austria may, if requested by the Austrian tax authorities, be in a position to provide all information on settlors and beneficiaries of trusts and Treuhand administered in Austria. 139. As far as the tax authorities are concerned the procedure that is followed here involves the reporting of the position of the Treuhnder as the legal owner of the assets to the tax authorities. The issue that is of importance to the tax authority here is the holding of the assets in fiduciary capacity. The tax authorities in Austria seek evidence of that from the Treuhnder. That evidence is also cross-verified. This cross-verification may be carried out by an on-site visit or with the service provider, where the registration has been carried out by one. The tax authorities check for details of the beneficial owner in the case of the Treuhand. If the Treuhnder is unable to satisfy the tax authorities that the assets are held in a fiduciary capacity, those assets and income derived there from will be attributed to him or her for tax purposes. The details of the assets of the Treuhand are retained by the tax authorities. The same rule applies similarly to trusts and settlors. 140. The Treuhnder and the Treugeber file separate tax returns. The penalties for not filing a tax return or late filing, is the same as for companies and partnerships.

Information held by service providers


141. Auditors, lawyers, civil law notaries legal and tax advisers are also entities with AML/CFT reporting obligations under Austrian legislation (see above, section A.1.1) and must perform CDD in any circumstances. In addition, both natural and legal entities and registered general partnerships, in particular when beingcorporate consultants and exercising the role of a trustee under a trust or similar legal arrangement or enabling another person to perform the aforementioned roles are subject to AML/CFT requirement (see in particular s.365m of the GewO). 142. Pursuant to the AML/CFT legislation, when a professional is required to perform CDD, identification of its clients and beneficial owners is required. Beneficial owner is defined as the natural person(s) who ultimately own or control at least 25% of the contracting party, or the natural person on whose behalf a transaction or activity is being conducted (s.365 of GewO). 143. The AML rules that apply to service providers in respect to companies also apply to Treuhnder and trustees acting in a business capacity. However, the Austrian authorities have reported that trustees and trusts are

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not common to Austria. During the period under review (2009 to 2011 inclusive), Austria did not receive any EOI requests relating to trusts, and therefore has no experience in this regard. Professionals in Austria also do not have any significant experience in dealing with trusts. Similarly, non-professional trustees are not known in Austria but the Austrian authorities stand ready to answer any incoming requests received in relation to these arrangements. The position of trustees acting in a non-business capacity (and therefore not be covered by the AML/CFT requirements) and the effect on EOI in practice should continue to be monitored by Austria.

Conclusion
144. While there are no general registration requirements for trusts to be registered, a partial obligation exists for Treuhand where it is administered by a lawyer or civil law notary. Further, the obligations set out in the BAO require anyone to disclose all facts and circumstances that are relevant for taxation in Austria and this may include information on settlors and beneficiaries of trusts and Treuhand. Finally, under the AML/CFT requirements, trust service providers are obliged to maintain ownership and identity information regarding their clients and those beneficial owners who have at least a 25% interest in a trust or foundation.14 145. The practical application of the above legal requirements has not occurred frequently in Austria as trust arrangements are not common. Austria has not received any EOI requests concerning trusts or trust-like arrangements during the period under review.

Foundations (ToRA.1.5)
146. Austrian law recognises the concept of foundations. A foundation (Stiftung) is an organisation intended to promote on a long-term (indefinite) basis a particular purpose (designated by the founder) through assets dedicated to that purpose. Austrian law allows for the creation of:
14. Directive 2005/60/EC of the European Parliament and of the Council of 26October 2005 on the Prevention of the use of the Financial System for the Purpose of Money Laundering and Terrorist Financing. With respect to legal entities such as foundations or legal arrangements such as trusts, that Directive, as implemented in Austria defines beneficial owner to mean (i)where the future beneficiaries have already been determined, the natural person(s) who are beneficiary of 25% or more of the property of a legal entity; (ii)where the individual that benefit from the legal entity have yet to be determined, the class of persons in whose main interest the entity is set up or operates; (iii) the natural person or persons who exercise control over 25 % or more of the property of a legal entity.

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public benefit foundations under the Federal Foundations and Funds Act (BStFG). These foundations can only be set up for charitable purposes. They may carry on a minor commercial activity to the extent that this activity supports the main purpose of the foundation; and private foundations under the Private Foundations Act (PSG). In such foundations, the founder dedicates property for private purposes devoid of any self-interest. There is a legal prohibition which prevents foundations from carrying on any commercial activity.

Public foundations Information held by government agencies


147. Within the meaning of the BStFG, foundations are assets with legal personality which have been permanently earmarked by the direction of the founder, the proceeds of which are intended for charitable or benevolent purposes (s.2). The purpose of a public foundation must be to assist the needy if it is for benevolent purposes or, if it is for charitable purposes, the purpose must be for the common good and can benefit everyone or a specific class of people. The law deems the common good to include benefit in respect of; intellectual, cultural, moral, sporting or material matters (s.2(2)). 148. The deed of foundation, required to be notarised, must contain the following (s.4BStFG ): the founders declaration of his intent to dedicate a particular asset to the establishment of a foundation; detail of the assets dedicated to the foundation; details of the charitable purpose; and a proposal for the appointment of the foundation protector.

149. Once the deed of foundation is established, it must be provided by the founder to the Foundations Authority, which decides whether a permission to establish the foundation is granted or not. This permission grants legal personality to the public foundation and the establishment of the foundation is published in the Official Gazette of the Wiener Zeitung (s.6BStFG). Further, the Foundation Authority appoints the foundation protector. 150. In the six months following its appointment, the foundation protector must submit the foundation Charter where the following information must, amongst other things, be mentioned (s.10BStFG ): the name and the seat of the foundation;

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details of the purpose of the foundation; details of the class of persons who are the beneficiaries; and designation of the foundations administrative and representative bodies.

151. The foundation Charter must be approved by the Foundations Authority and the foundation cannot commence its activities until the Charter has been approved (s.10BStFG). 152. All public foundations are registered in the single foundation register maintained by the Ministry of Interior (s.40BStFG ). The register contains the name, seat and address of the foundation, details on the purpose of the foundation and the group of beneficiaries, and the names and addresses of the representatives and executives of the foundation. This register is open to any person for inspection (s.40). Information in this register is kept permanently (s.40(5)). 153. There are 220 public foundations registered in Austria. These public foundations are supervised by the Foundations Authority. The organisation of this Authority is such that it has a head office in Vienna and there are regional offices in each of the nine Lnder of Austria. There is only one person working in the head office in Vienna and five to six people in each of the regional offices. The regional offices are under the supervisory control of the head office. As regards the supervisory role of the Authority vis-a-vis the foundations, this consists of supervising their work and addressing the legal questions when deficiencies are detected. If the matter is not resolved by the Authority, it will be settled by the Courts. 154. While all public foundations are required to register themselves with the jurisdictional regional office, there is no legal provision that would ensure that all foundations actually register themselves. There are no penalties for not registering. The system relies on the belief that foundations will automatically register themselves, if they want the status of having a charitable purpose and the resultant tax benefits. 155. Public foundations, according to the BStFG are corporate entities and therefore in principle subject to corporate tax. However, they are exempt from unlimited corporate tax when they are dedicated to a charitable or benevolent purpose. Then public foundations can merely become subject to unlimited corporate tax in case and to the extent that they conduct an economic activity. Moreover capital income of public foundations is always subject to taxation. Public foundations are regarded as being dedicated to a charitable or benevolent purpose when they are (i)set up in accordance with the requirements of the BStFG which requires, inter alia, a dedication to charitable or benevolent purposes according to the deed of foundation and the statutes and (ii)when

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their administration in fact is only and directly dedicated to the fulfilment of these purposes. This means that a public foundation that in fact does not only and directly pursue its charitable or benevolent purpose can become subject to unlimited corporate tax. Moreover any changes of the statutes that are relevant for a granted tax exemption have to be reported to the competent tax office within one month. 156. When a foundation approaches the regional office for registration, the regional office is required to check the identities of all persons involved, including the beneficiaries. The foundation needs to provide the details of the assets. The regional office will check on the details only if they find some required information missing. The regional office then sends a report to the head office. There is no institutionalised system by which the head office will check the information that has been sent by the regional office. As per the data that has been provided by Austria, 16 inspections have been carried out by the regional offices in 2012 (six in 2010 and 13 in 2011). Enquiries into whether the foundation is carrying out its avowed objective and not carrying out any commercial activities is a matter that is left to the tax authorities. 157. Austria has further reported that the BStFG does not include specific requirements as to how the foundation authorities must fulfil their super visory duty (the discussion below naturally also applies analogously to funds and fund authorities). Under sec. 14(4) BStFG, the officers of the foundation authority must be allowed to inspect the financial management and administration of foundation assets. Austria has claimed that the Federal Ministry of Internal Affairs exercises great care in ensuring that the entries in the Foundation and Fund Register satisfy applicable legal requirements. It states that in 2011 a number of foundations were requested to discharge directors who were inadmissible under the BStFG. 158. The offices of the Foundation Authority maintain records in electronic and physical format for an indefinite period.

Information available with service providers


159. Financial institutions, civil law notaries, lawyers, accountants (including when they carry out transactions involving foundations) are service providers with obligations under Austrias AML/CFT legal framework (see also above, SectionA.1.1). Under these pieces of legislation, service providers are obliged to maintain ownership and identity information regarding their clients and the beneficial owners with at least a 25% interest in a client (see above conclusion under A.1.4). 160. The AML obligations on service providers that have been discussed in the preceding paragraphs of this report, also apply here.

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Conclusion
161. The Austrian legal and regulatory framework ensures the availability of ownership information on public foundations: (i)the name of the founder is available in the deed of foundation; and (ii)designation of the foundations administrative and representative bodies and details on the class of beneficiaries must be disclosed in the foundations Charter which must be provided to the Foundations Authority. Private foundations

Information held by government agencies


162. A private foundation can be established by a natural or legal person(s) by drawing up a foundation deed. The foundation deed must be established or authenticated by a civil law notary (s.10PSG) and must contain, amongst others, the following information (s.9): the purpose to which the assets are dedicated; the purpose of the foundation; the name and address of the founder; the names of the members of the board of directors; and the names of the members of the supervisory board;

163. Beneficiaries are the parties designated as such in the foundation deed (s.5 PSG). When the foundation deed does not expressly stipulate the name of the beneficiaries, it may be that the group of beneficiaries is detailed in the deed while the identity of the beneficiaries themselves is mentioned in an appendix, alternatively there may be no details of the foundations beneficiaries in the deed. 164. Where the foundation benefits to a class of persons, there is no obligation to designate the name of each beneficiary, and this group of beneficiaries can directly be known from the purpose followed by the foundation. 165. Private foundations must be registered by the local court where they have their registered office (s.13PSG and s.2FBG). The information maintained in the Firmenbuch includes (s.3FBG): commercial register number, foundation name, legal form, registered office, name and date of birth of the foundation representative(s). In addition, and pursuant to section13(3) of the PSG, information on the purpose of the foundation, the date of the deed and of any amendments to that deed and the name and date of birth of the members of the supervisory board must be provided.

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166. Any amendment to the information entered in the Firmenbuch must be updated without delay (s.10FBG). 167. As for the practical application of these legal requirements, the procedure that is applicable for other entities that need to register with the district court registry applies in the case of private foundations also.

Tax requirements
168. Pursuant to sections 119 and 120 of the Fiscal Code (BAO): taxpayers must disclose circumstances which are of relevance to the existence and the scope of any tax liability (s.119(1)). The disclosure should in particular be achieved by tax returns, registrations, notifications and provision of other information (s.119(2)); and taxpayers must notify to their tax offices information concerning all circumstances which justify, change or end their personal tax obligation in respect of income tax, corporate tax, VAT and taxes on capital.

169. 3192 Private foundations were registered for tax purposes by the end of year 2012. For registration by the revenue authorities, all foundations must file a Verf 15b form. As indicated on this registration form, a copy of the deed of foundation must be provided to the revenue authorities. As a result of the requirements of the Corporate Income Tax Act 2010, foundations should disclose any appendix to the foundation deed to the tax authorities, together with a copy of any Treuhand used by the founder. If these documents are altered, the changes must be notified to the tax authority. In addition, since April 2011 the identity of any beneficiaries not named in the deed must be disclosed to the revenue authorities as provided for in section5 of the PSG. For foundations set up before 1April 2011, the name of all such beneficiaries must be disclosed to the revenue authorities on or before 30June 2011. 170. The application for registration or the notification of any change to registered information must be file within one month of the event requiring the notification, as detailed on the form to be filed. 171. As far as the practical application of the registration requirements of private foundations with the tax authorities is concerned, the same procedure applies as in the case of companies. However, there are five specific tax offices in Austria that have been given the task of registering private foundations. Austria has reported that in the year 2010, three inspections were carried out on private foundations. One of the objectives of these inspections was to check whether private foundations fulfill their obligations to maintain identity information on the beneficiaries. No problems were noticed on the issue of identification of beneficiaries. Private foundations are also subject

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to internal (desk based) and external (on-site) audits by the tax authorities. In 2012, there were 932 internal audits on private foundations (760 in 2011 and 827 in 2010). The tax assessed in 2012 on this account was EUR702156 (EUR1000 000 in 2011 and EUR1094 432 in 2010). As for external audits, there were 77 such audits in 2012 (116 in 2011 and 91 in 2010). The amount assessed in 2012 was EUR21145 076 (EUR24517 176 in 2011 and EUR31645 362 in 2010).

Information available with service providers


172. Financial institutions, civil law notaries, lawyers and accountants (including when they carry out transactions involving foundations) are service providers with obligations under Austrias AML/CFT legal framework (see also above, section A.1.1). Under these pieces of legislation, service providers are obliged to maintain ownership and identity information regarding their clients and those beneficial owners who have at least a 25% interest in a client (see above conclusion under A.1.4). 173. The practices of professionals subject to AML obligations as well as the supervision carried out by supervisory bodies to ensure that these obligations are complied with, (which have been discussed in the preceding paragraphs of this report) also apply in the context of private foundations.

Conclusion
174. The Austrian legal and regulatory framework ensures the availability of ownership information for private foundations: the name of the founder, of the board of directors, and the supervisory board is indicated in the deed of foundation on a mandatory basis. The deed must be established by a civil law notary who is a professional with CDD obligations; private foundations must be registered in the Firmenbuch; and for registration by the revenue authorities, foundations must provide the foundation deed and the identities of their beneficiaries.

The system of maintenance of ownership and identity information is much stronger in the case of private foundations than for public foundations. By a combination of the requirements of the district tax authorities and the tax administration, ownership and identity information is available in respect of private foundations. Austria has not received any EOI request concerning ownership information of foundations during the three year period under review.

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Enforcement provisions to ensure availability of information (ToRA.1.6) Registration requirement


175. Pursuant to section24 of the FBG, the court can, by way of a fine of up to EUR3600, enforce the obligations set down in the act, including the obligations to file an application and to submit all necessary documents for inclusion in the Firmenbuch. For non-compliance with this obligation within two months, an additional fine of up to EUR3600 may be imposed. 176. In addition, the Austrian commercial law states that until registration by the local court of justice and entry in the Firmenbuch, companies do not exist as such and any person acting on behalf of a non-registered company is severally liable to the debt of the company (s.34 Austrian Stock Corporation Act, s.2 Limited Liability Company Act, s.8 Co-operatives Act, ss.123 and 161 UBG). 177. In the practical implementation of these legal requirements, the district court authorities can levy a penalty if they notice a breach. As mentioned above the penalty is EUR3600. The representative of the company is the person who is be subject to the penalty. In case the district court authorities receive some information, that is not publicly available, that points to a breach committed by a company, the district court authorities forward this information to the tax authorities. There is an institutionalised system of such mutual assistance between the district court authorities and the tax administration. As a preventive measure, if the district court authorities feel the need to check the company registers, they request such inspections be carried out through the tax administration. Austria has reported that in 2011 in two cases (two cases also in 2010), on-site inspections were carried out by the tax authorities.

Obligation for any entity to maintain ownership information


178. Austrian commercial legislation does not include any specific sanctions for AGs if they do not maintain share registers or do not have their registers properly kept. However, AGs shareholders that are not entered on the register are precluded from exercising any of their rights vis--vis the company (s.61 para 2 AktG). If the board of directors of an AG does not keep the share register, its members may be liable for any damages (s. 84 of the law), could be dismissed by the supervisory board (s. 75 para 4 of the law) and may face criminal sanctions (when the obligation to maintain a share register is breached and this breach leads to a financial loss the sanction can be imprisonment of up to 10 years. See s.153 of the penal code). 179. As mentioned earlier, Austria has reported that the responsibility to ensure that the companies carry out the obligation upon them to maintain

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this information lies with the management (Vorstand) of the stock company which is responsible for maintaining in a proper manner this register. This is one of the duties of the management in order to organise and run the company and the management is primarily responsible to a supervisory board that is charged with the responsibility to supervise how the company is run. The system as it exists is adequate as any loss or damage that may be caused by not maintaining a share register will expose the management to a liability. 180. When the board of a Genossenschaft does not keep the register of members, a fine up to EUR3500 is applied by the Firmenbuch. Genossenschaftens members also face in that situation criminal sanctions up to one year imprisonment.

Tax requirements
181. All obligations deriving from the BAO are supported by sanctions to respect tax requirements, including the provision of information to the authorities. In particular section111 of the BAO states that the Fiscal Authority is authorised to compel compliance with the fiscal legal obligations by imposition of a fine not exceeding EUR5000. For late submission of tax returns, a 10% surcharge may be applied. 182. The Fiscal Offences Act also sets out a range of sanctions where tax obligations are not fulfilled: whoever intentionally reduces his taxation by violating a duty of notification, disclosure or truthfulness under the BAO is deemed guilty of tax evasion (s.33). In that case, tax evasion is punishable by a fine of up to the double of the amount of tax avoided. In addition to this fine, the court may impose a custodial sentence of up to two years; where a person fails to self-assess taxes (when required to do so), an administrative fine of half the amount of taxes to be paid may be imposed (s.49); a person who does not retain books and record as required by the BAO may be punishable by a fine of up to EUR5000 (s.51).

183. Section42 of the PSG states that whoever does not or does not fully comply with the obligation to provide the name of a private foundations beneficiaries to the revenue authorities may be punished by a fine of up to EUR20000 for each beneficiary whose identity is not disclosed. 184. In the year 2012, the Austria tax audit unit performed 16452 tax audits (19957 for 2011 and 19780 for 2010) resulting in an additional revenue of EUR1487 209872 (EUR1567 322507 for 2011 and EUR1069 675769 for 2010). Austria has reported that separate analysis of sanctions that resulted

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from these audit actions is not possible. This is because the audit and penalty proceedings are recorded in two different databases. It is currently not possible to create an unambiguous link between these data.

Disclosure of major shareholding


185. According to s.48 para.1 No.5 of the Austrian Stock Exchange Act, non-compliance with the disclosure requirements for major holdings is to be sanctioned with a fine up to EUR30000, unless the offence constitutes a crime within the competence of criminal courts.

AML/CFT legislation
186. All requirements coming from the AML/CFT framework are supported by administrative sanctions, unless the offence constitutes a crime. For example: fines up to EUR75000 or a term of imprisonment of up to six weeks for banks and financial institutions in case of non-compliance; fines up to EUR45000 and disciplinary sanctions (debarring up to one year, removal from the list of lawyers) for lawyers who do not comply with AML/CFT obligations; fines up to EUR36000 and disciplinary sanctions (suspensions up to one year, debarring from office) for non-compliance by civil law notaries; and fines up to EUR20000 for non-compliance by companies and trusts service providers, and nominees.

187. Any person involved in money laundering, when the amount involved is over EUR50000 is punishable with a term of imprisonment from one to ten years (s.165 (4) of the criminal code). 188. Austria has reported that in this regard, in the year 2012 there were 34 administrative proceedings initiated (35 in 2011 and 14 in 2010). In 2012, penalties were levied in 14 cases (7 in 2011 and 5 in 2010). The volume of pecuniary sanctions in 2012 was EUR57700 (EUR21000 in 2011 and EUR38500 in 2010)

Conclusion
189. Austrian legislation usually provides for sanctions in situations where the information required by law is not kept.

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Determination and factors underlying recommendations
Phase1 determination The element is not in place. Factors underlying recommendations Although Austria has put in place new provisions to prohibit the issue of bearer shares by unlisted jointstock companies, the mechanisms to identify the owners of bearer shares previously issued by these companies may not be sufficient. In addition, until full effect is given to these provisions (1January 2014), bearer shares can still be issued or transferred without identification of their holders. Information regarding the ownership of foreign companies incorporated outside the EU and that are resident for tax purposes in Austria may, under certain circumstances, not be available. Recommendations Austria should introduce mechanisms ensuring the identification of the holders of bearer shares in all instances.

In such cases, Austria should ensure that ownership and identity information is available.

Phase2 rating To be finalised as soon as a representative subset of Phase2 reviews is completed.

A.2. Accounting records


Jurisdictions should ensure that reliable accounting records are kept for all relevant entities and arrangements.

General requirements (ToRA.2.1)


190. The obligations to keep accounting records arise in Austria from both Entrepreneurial Code (UGB) and Tax Code (BAO). The same obligations also apply to foreign companies resident in Austria, as well as to branches of foreign companies, for the activities they carry on in Austria. 191. According to section190 of the UGB, businesses are required to keep books and records in order to retrace their transactions and to enable their financial position to be established. These accounting records must permit reconstruction of the individual business transactions. The entries in

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accounting books should be made chronologically should be complete and made in a correct and timely fashion. No entry may be altered in a manner which no longer permits the original content to be ascertained (paragraphs 3 and 4 of s.190). 192. The requirements set out in the UGB apply to: joint stock companies, limited liability companies and partnerships where no general partner with unlimited liability is a natural person, whatever their turnover; and any other businesses whose turnover is above EUR700000 a year.

193. Section124 of the BAO states that whoever bears an obligation under the UGB or other provisions of law to keep and retain books and records must also keep this information for tax purposes. 194. In addition, pursuant to section125 of the BAO, all agricultural, forestry and commercial businesses must keep books and records: they have a turnover exceeding EUR400000 for two successive calendar years; or their value15 exceeds EUR150000 as of 1January of any year.

195. These obligations relate to any type of entity whatever its legal form. Books and records to be kept must ensure the preparation of financial statements and the annual inventories (s.125BAO). These records must be kept in such a manner that they are capable of providing a general view of the business transactions and enable reconstruction of the individual business transactions from their origins to their execution. 196. Finally, and pursuant to section126 of the BAO, taxpayers who bear an obligation to submit tax returns must keep such records necessary for recording facts and circumstances relating to their tax liability. In particular, when such taxpayers are not required to keep books and records according to sections 124 and 125 of the BAO, they nevertheless have an obligation to record all their business receipts and disbursements and prepare their annual accounts at the end of each year for purposes of income and profit tax collection. 197. Given that tax returns must be filed by all companies and partnerships (see ss.133 and 134 BAO), together with comprehensive tables showing a clear picture of the company or partnership financialsituation (including a
15. Value should be understood as at the amount of the unitary value increased by the value of commercial tenancies as a lessee and decreased by the value of commercial leases as a lessor (at the most recent determinative amount thereof).

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balance sheet, a profits and losses account and an inventory), it follows that, as a result of section126 of the BAO, comprehensive obligations to keep accounting records are imposed on company and partnerships not already covered either by the provisions of the UGB or sections 124 and 125 of the BAO. 198. In practice, the tax authorities have sufficiently wide powers to ensure that companies and partnerships keep to the obligations to maintain and produce accounting records. During the course of an audit or for the purpose of gathering information to answer EOI requests, tax authorities can ask the taxpayer to produce accounting records and underlying documentation of the last seven years. In cases of tax fraud this is extended to the last 10 years. The tax authorities have the powers to seek the production of any relevant document. Failure to do so, on the part of the taxpayer will attract a penalty of up to EUR5000. The tax authorities are also empowered to take copies of documents. Seizure of original documents is allowed only in criminal tax matters. 199. In order to check the veracity of accounts that have been presented by the taxpayer, the tax authorities have the power to conduct third party enquiries. In case the accounts that are presented by the taxpayer are found unreliable, the tax authorities are empowered to estimate the income of the taxpayer, based on their enquiries. 200. As regards trustees, Treuhnder and any other fiduciary relationships, the main obligations in Austria to keep accounting records come from the Austrian Civil Code (s.1012) requiring persons acting on behalf on another one to, in particular, present all accounts where demanded. The obligation to keep records and receipts does not depend on any obligations under tax law. It has not been possible to determine the extent to which this may be considered as a full requirement to keep accounting records or how many arrangements are in this situation. 201. However, professional trustees and Treuhnder are also subject to the record keeping requirements set out in the BAO in their professional capacity and to the extent that there is an obligation to pay taxes in Austria i.e.when (i) income from Austrian source is derived from a trust or a Treuhand or (ii) assets located in Austria are held through a fiduciary relationship. As persons liable to tax on the income derived from a trust or Treuhand (s.24 of the BAO), settlors and Treugeber when (i) they are resident for tax purposes in Austria or (ii) income from Austrian source is received through a fiduciary relationship, are also required to keep accounting records explaining the income received as well as enabling them to fill out their financial statements.

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202. Regarding the practical implementation of the obligations that are placed upon Treuhnder and the Treugeber, these are also enforced by the tax authorities as has been described above under section A.1.4 of this report. Here also, failure to provide these accounting records or underlying documentation on the part of the taxpayer will in practice attract a penalty of up to EUR5000. 203. When the Treugeber or settlor is not resident in Austria and all assets held through the fiduciary relationship are located outside Austria, there is no record keeping requirements provided for by the Austrian tax legislation. However, any obligation under foreign provisions of law that applies to a specific Treuhand/trust in Austria under the rules of international private law will also trigger the obligation to keep accounts under Austrian tax law (Art.124 BAO). 204. Section32 of the Public Foundations and Funds Act imposes the obligation on any foundation to invest assets or funds in line with the purpose of the foundation. To this extent, evidence of the investment must be furnished to the Foundations Authority. All legal transactions relating to funds, assets and real property also need the prior approval of the supervisory authority. Paragraph 3 of section32 also states that public foundations are subject to accounting rules and must submit, pursuant to section14 of the same act, a balance sheet showing all assets and liabilities within six months after the end of the accounting period. 205. Private foundations are subject to the general accounting requirements deriving from UGB and must therefore keep books and records (s.18 Private Foundations Act). Private foundations are also taxable entities according to the BAO and are further subject to the record keeping requirements set out in this code. 206. In respect of foundations also, the same obligations will apply to these entities, in respect of answering the tax authorities, as has been discussed above. 207. Austria has reported that the number of desk audits performed in the year 2012 was 527185 (452191 in 2011 and 364326 in 2010). The additional revenue that was generated by this exercise was EUR588396 901 in 2012 (EUR438191 578 in 2011 and EUR3011 901365). Austria has reported (as mentioned earlier) that a separate figure for penalties levied is not available as the amount levied by way of penalties and that generated from these audits is in two different databases and a linkage cannot be made between them. Penalties are also levied by the district court authorities for not providing annual balance sheets on time. The district court authorities have reported that in 2012, in 21305 cases, compulsory sanctions were applied for not providing annual balance sheets in time (50621 in 2010 and 28834 in 2011).

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Conclusion
208. Except in some specific situations relating to trusts and Treuhnder, the obligations in the accounting and tax legislation, ensures the availability of accounting records from which it is possible to accurately review all transactions, to assess the financial position of all entities, and to prepare financial statements. 209. Austria has reported that largely, they have not found any problems in the practices of the taxpayers maintaining accounting records. During the three year period under review, ending 31December 2011 Austria received a total of 397 requests that concerned accounting information. Of these, 148 requests were for companies, two for foundations, 40 for partnerships and 207 for individuals. The Austrian competent authority has been able to provide accounting information, whenever sought by a treaty partner. Peers have commented that they have been satisfied by responses provided by Austria although delays in the provision of information, have been highlighted in several instances. Austria has reported that of the 397 requests relating to accounting records, 391 have been answered. The remaining 6 are pending. These are pending on account of timing issues.

Underlying documentation (ToRA.2.2)


210. Pursuant to section212 of the UGB, all businesses required to keep accounting records must keep books, inventories, financial statements with the consolidated management reports, copies of received and sent business correspondence and all evidence underlying ledger entries in the books. 211. Section131 of the BAO also imposes comprehensive obligations on any person or entity required to keep accounting records, to retain all underlying documentation needed to explain all transactions. In particular all records must be associated with receipts and business papers. It is also mentioned in this section of the BAO that all receipts and evidence associated with the books and records should be kept in a manner organised to enable the verification, at all time possible of the entries. 212. Further, since Austria is an EU member and thus party to the intracommunity VAT system, its businesses are subject to special requirements regarding evidence of transactions carried out. In particular, it is necessary to keep all documents that can be used to review intra-community flows of goods and services, including invoices issued and received, goods delivery notes, or the contracts under which purchases and sales have been conducted (see s.18 Austrian Value Added Tax Act). 213. These various requirements ensure that when any entity is required under Austrian legislation to keep accounting records, those records are

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backed by the necessary documentation on the transactions performed and which allow for assessment of the financial position and preparation of financial statements for all relevant entities and arrangements. 214. On the practical implementation of this aspect, the tax authorities have ample powers to seek the production of underlying documentation of up to a period of seven years. The system as it exists in Austria is such that the tax authorities can seek any relevant document. The powers that tax authorities can use for seeking information to answer an EOI request are the same as are available to then in a domestic tax case. Failure to provide documents would attract penalty of up to EUR5000. As mentioned earlier, there could be an on-going penalty till the breach continues, but it cannot exceed EUR5000. 215. Austrian authorities also answered more than 3952 incoming VAT requests in the three years under review (1245 for 2009, 1361 for 2010 and 1346 for 2011) and in these requests, Austrias s VAT partners mainly ask for underlying documents justifying delivery of goods or provision of services, such as invoices, contracts and other supporting documents. The large number of requests received as well as the capacity of Austrias authorities to provide answers gives broad assurance that underlying documentation is kept in compliance with the standard in Austria. 216. The peer input received indicates that Austria has been able to answer requests in this regard, without difficulty. Austria has in the three year period under review exchanged information concerning underlying documentation in 214 cases. Of these, 80 cases concerned companies, 22 cases involved partnerships and 112 cases were related to individuals.

5-year retention standard (ToRA.2.3)


217. All businesses covered by the record keeping requirements set out by the UGB must keep their accounting records for a seven year period, this period starting from the end of the calendar year for which the last entry in the books was made (s.212UGB). 218. Pursuant to section132 of the BAO, all books and records that must be kept in accordance with this code must also be retained for a seven year period. The same requirements apply to all accompanying documentation. 219. As has been mentioned above, the tax authorities can seek documents for up to a seven year period. In cases of tax fraud this period is extended to 10 years. The Austrian tax authorities have demonstrated that they are in a position to effectively supervise the obligation to maintain accounting records and underlying documentation for the five year period, prescribed by the standard.

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Determination and factors underlying recommendations
Phase1 determination The element is in place Factors underlying recommendations In the case of fiduciary relationship, there are some uncertainties as regards the detailed obligations to keep accounting records where the Treugeber or settlor is not resident in Austria and assets held through the fiduciary relationship are located abroad. Recommendations Austria should make it clear that reliable accounting records are kept in the case of fiduciary relationships in any situation.

Phase2 rating To be finalised as soon as a representative subset of Phase2 reviews is completed

A.3. Banking information


Banking information should be available for all account-holders.

Record-keeping requirements (ToRA.3.1)


220. Legal obligations to keep bank information are contained in the Austrian Federal Banking Act (BWG ). 221. The BWG explicitly prohibits any form of anonymous accounts (s.40d(2)). Section40(1) of the BWG requires that financial institutions and a wide range of additional financial businesses and professions have knowledge of their customers. This section states that all credit institutions and financial institutions must ascertain and verify the identity of the customer in the following cases: before initiating a permanent business relationship; this must also be done to existing customers on a risk assessment basis; before executing any transactions which are not conducted in connection with a permanent business relationship and which involve an amount of at least EUR15000 or more, whether the transaction is carried out in a single operation or in multiple operations between which there is an obvious connection;

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when there is a suspicion of money laundering or terrorist financing, regardless of any applicable derogation, exemption or threshold; and when there are doubts about the veracity or adequacy of previously obtained customer identification data.

222. Pursuant to the same section, the identification and verification of the identity of the customer and its beneficial owners must be ascertained by the personal presentation of an official photo identification document issued by a government authority. Where the customer is a company or entity, the identity must be ascertained on the basis of a meaningful supporting document which is available under the usual legal standards of the country in which the legal person is incorporated. In addition, the identity of the natural person competent to represent this legal entity is ascertained by the presentation of an official photo identification document. 223. The BWG (s.40(3)) also requires that undertakings and persons covered by the AML/CFT obligations store: (i)documents serving the purpose of identification for at least five years after the termination of the business relationship with the customer; and (ii)all documentation and records of all transactions for a period of at least five years after their execution. 224. Banks and financial institutions that do not comply, even if only negligently, with the requirements set out in section40 of the BWG are guilty of an administrative offence punishable with a term of imprisonment of up to six weeks or a fine of up to EUR75000 unless the act constitutes a criminal offence falling into the jurisdiction of the courts. Banks and financial institutions could also be charged with committing or participating in money laundering and therefore be subject to criminal sanctions according to s.165 of the Penal Code. Any person involved in money laundering, when the amount involved is over EUR50000 is punishable with a term of imprisonment from one to ten years (s.165(4) of the Penal Code). 225. Financial institutions are supervised by the FMA. This supervisory body has two divisions, one that is involved in prevention of money laundering and terrorist financing and the second deals with internal affairs and European integration. In its supervisory role, the FMA supervises the compliance with the legal provisions and due diligence obligations in the area of prevention and combating of money laundering and terrorist financing. The supervision of the regulated entities by the FMA covers (i)credit institutions, (ii)life-insurance undertakings, (iii)payment institutions, (iv)e-money institutions and (v)investment firm and investment service providers. 226. The FMA conducts its supervisory activities using measures like onsite visits and other off-site supervision. On-site supervision includes on-site visits and company visits. On-site visits are two week long exercises and the audit module includes carrying out system review of the general strategies

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and procedures. The system review also covers a review of the organisation, the risk analysis strategies that it follows, its IT infrastructure, its CDD requirements, the policies and training imparted in this regard. Case by case assessments are also carried out that review the practical implementation of the strategies and procedures. A sample of the client relationships is examined to see whether the CDD procedures have been correctly followed. The company visits last about half a day and involve discussion and interviews with the company officials. This also covers the organisation and the AML measures of the organisation, the risk analysis followed, its IT infrastructure, CDD requirements of the company and policies followed and training imparted in this regard. The FMA also resorts to company visits to check some information that may have come up in some of its suspicious transaction reports (STR). Off-site investigations are also carried out where the FMA receives specific information in respect of a particular institution. These can result in fines up to EUR150 or even imprisonment of up to six weeks. 227. The sanctions that the FMA could apply vary in degree based on the failing which has been uncovered but range from administrative penalties to the revocation of the license of the institution. The FMA reported that they have found breaches relating to failure to adhere to the CDD principle, information regarding the client and/or the beneficial owner not being properly documented etc. The FMA has initiated 34 administrative procedures in 2012 (14 in 2010 and 35 in 2011). In 2012, in 14 cases penalties were levied (five in 2010 and seven in 2011). The pecuniary sanctions in 2012 was EUR57700 (EUR38500 in 2010 and EUR21000 in 2011). 228. The provisions detailed above confirm that Austria has put in place a system whereby the availability of information is ensured from a legal and a practical perspective. Since Austrias commitment to exchanging banking information is recent, Austria has not received any request for such information, since the introduction of the relevant legislation under a mechanism that meets the standard, therefore it has no experience in accessing this type information. It is however clear that banking information is available within financial institutions in accordance with the international standard.
Determination and factors underlying recommendations
Phase1 determination The element is in place. Phase2 rating To be finalised as soon as a representative subset of Phase2 reviews is completed

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B. Access to Information

Overview
229. A variety of information may be needed in respect of the administration and enforcement of relevant tax laws and jurisdictions should have the authority to access all such information. This includes information held by banks and other financial institutions as well as information concerning the ownership of companies or the identity of interest holders in other persons or entities. This section of the report assesses Austrias legal and regulatory framework gives to the authorities access powers that cover the right types of persons and information, the effectiveness of its practices and whether the rights and safeguards that are in place would be compatible with effective exchange of information. 230. Following its commitment to the international standards in March 2009, Austria enacted on 8September 2009 new legislation (Administrative Assistance Implementation Act) expressly stating that all domestic investigation and information gathering measures can also be used for the purpose of answering incoming international requests for exchange of information in tax matters (EOI requests). Further, this legislation also allows for the access by revenue authorities to bank information when the request is made under a treaty which includes provisions allowing for the exchange of bank information, whether these provisions are contained in Double Taxation Conventions or Tax Information Exchange Agreements. Austria now has 40 EOI relationships which allow for exchange of bank information but must ensure that access to bank information is available to all its treaty and relevant partners. 231. This new legislation also provides for the prior notification of the taxpayer concerned when a request is received for bank information. This notification is a mandatory prerequisite to the favourable examination of the incoming request by the Austrian competent authorities. As such, the implementation of a notification procedure complies with the standard. However, the notification procedure should also allow for exceptions in urgent cases or when the notification is likely to undermine the provision of the requested information.

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232. Access to ownership and accounting information, as well as any other type of information, is ensured on the basis of the domestic information gathering powers of the revenue authorities. These powers ensure access to information either held by the person concerned by the request or any third party and through multiple avenues, such as questionnaires, provisions of any books, records and documents of relevance, or testimonies. All of this information can be exchanged with treaty partners. 233. To ensure the provision of the requested information, Austrian authorities can rely on sanctions taking the form of fines, the use of search and seizure powers being restricted to criminal cases. 234. Austria is in a position to provide all types of information requested and its powers to compel the provision of information are adequate and ensure that the necessary information will is gathered in most instances. In the three year period under review, the requests for banking information that Austria received were either received before Austrias commitment to the international standard or were made under a treaty not containing a provision for the exchange of banking information in civil tax matters. Accordingly, Austria has not made use of the new powers to access this type of information granted by the Administrative Assistance Implementation Act. As a result, it is recommended that Austria monitor on an on-going basis the collection of banking information and its prior notification procedure to ensure that timely answers can be provided to its partners when this information is requested.

B.1. Competent Authoritys ability to obtain and provide information


Competent authorities should have the power to obtain and provide information that is the subject of a request under an exchange of information arrangement from any person within their territorial jurisdiction who is in possession or control of such information (irrespective of any legal obligation on such person to maintain the secrecy of the information).

235. The competent authority for Austria in respect of EOI is the Federal Ministry of Finance. Austrias powers to access information for EOI purposes vary depending on whether the EOI agreement in question was signed before or after Austrias commitment to the international standards. EOI agreements signed before March 2009 allow for the exchange of ownership and accounting information, as well as bank information provided that criminal proceedings concerning tax fraud are already pending in the requesting state. EOI mechanisms signed since that date, which include wording akin to Article26(5) of the OECD Model Tax Convention, also allow for the exchange of bank information in all criminal tax matters and in civil tax matters.

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236. To reflect this change and its commitment to the standards, Austria brought into effect new legislation on 8September 2009, the purpose of which is to implement rules regarding the collection of information for EOI purposes. Although particularly adopted to allow an access to bank information in civil tax matters, the Administrative Assistance Implementation Act (ADG) applies to all cases where administrative assistance is requested by a treaty partner. Thus, whether the request relates to ownership, accounting, or bank information, the ADG is the core legal framework under which EOI takes place. In particular, section2(1) clearly states that in connection with the applicable provision of law, the investigative action necessary to deal with a foreign request for administrative assistance shall be conducted in the same manner as if the foreign taxes were domestic taxes. 237. In all cases, the ADG provides for checking of the incoming request by the Austrian competent authority to ascertain whether or not this request meets the prerequisites to grant administrative assistance under the provisions of the applicable EOI mechanisms (s.2(3) ADG). 238. The competent authority in Austria is the Central Liaison Office (CLO). The CLO is part of the Tax Investigation Service of the tax administration of Austria. The Head of the CLO has two teams under him (in Vienna) with a total of 20 people working in these two teams including the team leaders. Apart from these two teams in Vienna there is one person located at Linz, one at Innsbruck and two at Salzburg. These persons located outside Vienna, were earlier deployed for operation of the treaty with Germany but are now being integrated with the head office of the CLO. These persons, therefore, now deal with the requests that are received from Germany, through the office of the CLO. 239. The office of the CLO does not only deal with issues of information on request. It also handles spontaneous exchange and mutual assistance within the European Union (EU). It operates as the single interaction point for tax-related information exchange between other jurisdictions and the local tax offices of Austria. The Head of the CLO is also head of the legal team within the Tax Investigation Service. 240. Contact details of the CLO are published on the EU-CIRCA website for countries within the EU. For countries outside the EU, the details of the CLO are published on the the secure website of the OECD or exchanged via email. The CLO contact details are detailed on the website of the Federal Ministry of Finance. 241. To facilitate easy and efficient EOI, within the EU, Austria uses standardised forms and electronic exchange of information. The manner in which the requests are dealt with in practice are discussed in greater detail under the element C.5.

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Ownership and identity information (ToRB.1.1) and accounting records (ToRB.1.2)


242. Where the incoming request received from a foreign counterpart relates to the provision of ownership and accounting information, the ADG states that the information will be gathered using access to information powers provided for by the Austrian Federal Fiscal Code (BAO). These powers can be used whether the request is made under an EOI mechanism meeting the international standard or not. 243. According to section143(1) of the BAO, the Austrian tax authorities are authorised to request information about all the facts that are relevant to explain the imposition of taxes. The obligation to provide such information applies to all persons, including where the personal tax obligations of the person required to provide this information are not the subject of the enquiry. This information must be provided to the best of the knowledge of this person and includes the obligation to provide any type of certificates or written documents. This obligation also includes the possibility for the tax authorities to inspect such documents (s.143(2) BAO). 244. When tax returns have already been filed, the tax authorities are permittedin the course of their duties of assessing and auditing tax liabilities to review these tax returns and when necessary to require the provision of supplementary information (s.161BAO). These powers can also be used in the course of answering incoming EOI requests. 245. Section164 of the BAO provide for the possibility to ask taxpayers to submit all types of books, records and business papers, allows the Austrian authorities to access and use for EOI purposes any type of accounting records and ownership information that must be kept under Austrian legislation. Pursuant to section165 of the BAO, third parties can also be asked to provide such information when negotiations with the taxpayer are not likely to lead to the provision of information or have no prospect of doing so. Austrian authorities have advised that tax authorities have a wide margin in evaluating whether a request to the taxpayer is likely to lead to the provision of information. In this evaluation the following aspects should be taken into consideration: the taxpayers interest in confidentiality, the interests of third parties and the tax administrations economy and convenience. 246. Ultimately, if some conditions are met, revenue authorities may also use further investigation powers and in particular summons third parties to testify as a witness (s.169BAO). Some persons cannot be required to provide information in this way (persons with restricted cognitive abilities, clerics and organs of the State or other regional administrative body; see s. 170) while others can refuse to be summoned (relatives of the defendant and persons who have legal obligation of secrecy such as lawyers or civil law notaries; see s.171).

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247. Pursuant to section172, anyone required to testify as a witness can also, upon request of the fiscal authorities, be required to submit documents, deeds and business records relating to specifically designated facts for inspection. Section173 of the BAO finally states that these testimonies may also be provided in writing. 248. Considering these broad powers and the various avenues enabling the revenue authorities to gather information, any type of ownership or accounting information can be collected in Austria from taxpayers or any third parties and can be exchanged upon request with counterparts. 249. The CLO has access to various databases, besides the central database. These other databases are, (i) electronic land register, (ii) electronic commercial register, (iii)electronic central register of residents, (iv)electronic central trade register, (v)electronic central register of associations, (vi)electronic central licensing register for vehicles and (vii)electronic vehicle permit and information register. These are all means whereby a lot of information is directly available. 250. The office of the CLO has also access to the taxpayers database that is maintained by the tax administration. In cases where the information requested is available on that database (tax returns, type of income received, residential status, habitual abode) and the help of the local tax office is not required, the CLO will be able to answer the EOI request immediately, while informing the jurisdictional local tax office. Austria has reported that it can answer about 11% of the requests from the databases that it has access to In respect of the rest; the local tax office has to make third party enquiries or enquiries with the taxpayer. 251. Where the information (be it identity and ownership information or concerning accounting records), is required to be gathered by the local tax office, they are given four months to do so. The local tax office will first try to answer the request from the database or the paper files that it maintains. The tax office then contacts the person. In cases where the information is required urgently, this time limit for the local tax office to answer the request can be shortened by the CLO. In practice, in 55% of the cases, the information was already in possession of the tax administration and in 20% of the cases, it was in possession of the taxpayer. In 9% of the cases, it was in possession of a third party and in 4% cases it was in possession of a bank. In about 1% of the cases, it was in possession of another governmental authority. 252. The tax authorities have the power to summon accountants and professionals during the course of the audit of a taxpayer. They can obtain information from the professional insofar as it is not protected by professional secrecy. The scope of professional secrecy is in line with the international standard and this has been clarified by the Austrian Supreme Court (in the case of Oberster Gerichtshof/OGH) in the decision dated 18October 2012.

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Bank information (ToRB.1.1)


253. When a request for bank information is made under a treaty including provisions specifically providing for the exchange of bank information, then the credit institution must provide this information when so requested by the Austrian tax authorities. 254. Section3 of the ADG states that where a request is submitted for the provision of information from a credit institution and such information is covered by banking secrecy law, then the credit institution which holds that information shall bear an obligation to provide the information and to permit inspection of and to surrender documents and files. The authority competent to handle the request for administrative assistance in Austria shall demand this information to be provided without delay, setting a reasonable deadline. Austrian authorities have advised that the provisions of the ADG and the BAO should be read together. While section3 of the ADG specifically states that banks are required to provide information upon request of the revenue authorities, the procedure to collect this information derives from the BAO, and in particular from section143. According to that section, all third parties can be required to answer any request received from the revenue authorities and bank secrecy can be lifted. 255. Where the request involves banking information under an agreement that is in line with the international standard, the matter is dealt directly by the CLO who will apply the provisions of the Administrative Assistance Implementation Act (ADG). Here the CLO will first check whether the requirements set by the relevant legal basis for providing the bank information are fulfilled.16 Then it simultaneously notifies the bank or credit institution and the individual concerned. The individual has 14 days to ask for a formal notification about the fulfilment of the legal requirement. In this case, the competent authority must issue a decision of first and last instance which can then be appealed at the Constitutional or Administrative Court. 256. Where the requesting jurisdiction is seeking bank information, the matter will be handled directly by the CLO. The CLO will seek the information from the bank. However, Austria has no practical experience in this matter under the new procedures as no request for bank information has been received yet from treaty partners, following the introduction of the new legislation. The CLO has reported that it has developed the necessary contacts
16. This being that there is an applicable (EU) Community Law, a double taxation treaty or other international agreement or other applicable legal basis under Austrian domestic law which contains a provision on administrative assistance stating that in no circumstances may Austria decline to provide information merely because the information is held by a credit institution (section2(3) of the ADG.

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and mechanisms with the banks to ensure that swift answers will be provided in answer to requests received. It has already been decided that the banks will normally be given two weeks to provide the information. 257. The CLO has also reported that it is not legally obliged to send the original request to the bank and that in practice only the elements necessary to collect the requested information will be provided to the bank. However, under the provisions of the ADG, the essential elements of the information request will be provided to the individuals who have rights of disposition arising out of the business relationship with the credit institution (relating to the bank account) which is subject to the request during the prior notification process. Austria has also clarified that it will never pass on such information as the original request received, consultation protocols, notices of other authorities, reports and similar documents. For the information that is sought from banks, Austrias authorities have reported that no standard notification document has been developed as they have not yet had any practical experience and have not been able to specify which information from the incoming request will be disclosed to the person concerned (see section C.3). 258. Apart from this procedure, there are no further restrictions on the powers of the CLO to access bank information. The CLO is ready to answer all incoming requests pertaining to bank information and has taken the necessary measures to make sure that banks will answer expeditiously. However, Austria has no practical experience on exchanging bank information under the new laws that it has brought in force. It is recommended that Austria monitors this issue and ensure that its practical implementation is in line with the international standard. 259. In other cases, where the request for banking information is under an EOI arrangement that is not in accordance with the international standard,17 the ability to obtain banking information is seriously restricted by a requirement for the requesting party to obtain the taxpayers consent. Only when such consent is provided will the request be sent to the local tax office. The local tax office then contacts the bank/credit institution requiring the production of the requested information. The local tax office has a time limit of three months to collect this information, as set by the CLO. In criminal cases, the procedure of referral to the local tax office is the same, except that here the CLO needs a formal statement from the requesting jurisdiction indicating that it is a criminal matter. These cases are usually processed by the criminal division of the competent local tax office which contacts the relevant bank. The deadline for obtaining this information is once again, three months.
17. Namely, the mechanism for EOI does not include a provision on administrative assistance stating that in no circumstances may Austria decline to provide information merely because the information is held by a credit institution.

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Use of information gathering measures absent domestic tax interest (ToRB.1.3)


260. The concept of domestic tax interest describes a situation where a contracting party can only provide information to another contracting party if it has an interest in the requested information for its own tax purposes. 261. The ADG clearly states that the investigative actions necessary to deal with a foreign request for administrative assistance are conducted in the same manner as if the foreign taxes were Austrian domestic taxes. Therefore, all domestic gathering measures described above in B.1.1 and B.1.2 can be used whether there is a domestic interest in the matter or not. 262. As mentioned earlier the CLO and the local tax office deal with EOI requests as they would a domestic case. There are no restrictions in the nature of domestic tax interest, on the powers of the authorities to use their gathering measures to answer EOI requests and no incoming requests have been declined by Austria for the period under review on the basis of a domestic tax interest.

Enforcement provisions to compel production and access to information (ToRB.1.4)


263. The Austrian authorities have search and seizure powers, though these powers can only be use in criminal cases. However the Austrian authorities have advised that this does not hinder the access to information in civil cases. 264. Non-compliance with the obligation to provide information on request of the tax administration can lead to administrative fines of up to EUR5000 (s. 111(3) BAO). This sanction may apply regardless of whether the request relates to ownership, accounting, or bank information. Austria has reported that this is an on-going fine till the information is provided. 265. In criminal procedures the refusal to comply with an order to provide bank information can lead to criminal sanctions of up to EUR10000 or in important cases to imprisonment of up to six weeks. Additionally a search warrant or a confiscation order could be issued and executed, if necessary, by using coercive measures (s.93(4) StPO). 266. The Austrian authorities report that they have been able to respond to all incoming requests without the need to resort to the imposition of these penalties and all information requested from third parties has been provided, with the exception of banking information which was subject of requests made prior to the introduction of the ADG. Austria has also reported that there has been no occasion to levy any penalty even in domestic cases.

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Secrecy provisions (ToRB.1.5) Bank secrecy


267. The legal basis for bank secrecy in Austria is provided for by section38 of the Austrian Federal Banking Act (BWG ). The provision of bank secrecy may only be amended by the Nationalrat (Chamber of Representatives) with at least one half of the representatives present and a two third majority of the votes cast. According to section38(1) of the BWG, credit institutions, their members, members of their governing bodies, their employees as well as any other persons acting on behalf of credit institutions must not divulge or exploit secrets which are revealed or made accessible to them exclusively on the basis of business relations with customers, or on the basis of section75(3) (reports on large value credits). If the employees of authorities as well as the Oesterreichische National Bank acquire knowledge subject to bank secrecy requirements in the course of performing their duties, then they must maintain bank secrecy as official secrecy; these employees may only be relieved of this obligation in limited circumstances such as with respect to AML. The obligation to maintain secrecy applies for an indefinite period of time. 268. Bank secrecy is lifted where information is required for the purposes of an EOI request made under agreements specifically incorporating the international standard on transparency and exchange of information. This follows from the fact that: these agreements expressly include a provision that the contracting parties may not decline to exchange bank information solely because the information is held by a bank or other financial institution notwithstanding any contrary domestic legislation; and the Administrative Assistance Implementation Act was specifically enacted by Austria in 2009 and allows revenue authorities to access bank information for EOI purposes when the request is made under a treaty which includes provisions allowing for the exchange of bank information.

269. Therefore, where information is sought under an EOI mechanism allowing for the exchange of bank information, the Austrian authorities may issue a request directly to the bank that holds the information. For access to information for the purposes of EOI under Austrias other agreements, which up to now do not follow the OECD standard, bank secrecy cannot be lifted except in criminal cases subject to special requirements as those agreements do not include an express provision equivalent to Article26(5) of the OECD Model Tax Convention. This concerns 63 of Austrias partners.

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270. Austria has not had any practical experience of providing bank information to treaty partners under the specific agreements that provided for this after the introduction of the ADG. As for the peer input received, most of the cases related to the period before the changes were made. For that period, a number of peers (eight) stated that it was extremely difficult to obtain bank information from Austria. In that period, in respect of a request received from one peer, Austria had asked to provide a note from a judicial authority containing (i)a confirmation that the criminal proceedings for criminal financial fraud had begun, (ii)description of the illegal conduct and (iii)confirmation that the illegal conduct was related to a tax audit or the collection of taxes. In respect of an EOI request from another peer, Austria sought that the consent of the taxpayer be provided. These problems that have been mentioned specifically have been encountered by other named treaty partners in some form or the other. In the three year period under review ending 31December 2011, Austria received 16 requests concerning banking information out of which 10 could not be answered. All these requests were however received before Austrias commitment to the international standard and were made under a treaty not containing a provision for the exchange of banking information in civil tax matters. 271. These requirements are no longer relevant where the EOI arrangements now meet the international standard (that Austria has negotiated post-2009) and if requests were now made by those same partners, Austria would be in a position to provide the requested information. However, as stated above, Austria has no practical experience of exchanging banking information in respect of these new/renegotiated treaties.

Professional secrecy rules


272. Professional secrecy is protected in accordance with the legislation governing the professions of lawyers (s.9RAO), civil law notaries (s.37NO), tax consultants and auditors (s.91WTBG) and accountants (s.76 BibuG). 273. These provisions provide for confidentiality with respect to all matters entrusted to these professionals. This duty also extends to personal circumstances and trade or business secrets that come to their knowledge in the performance of an engagement given to them. Austrian authorities maintain that professional secrecy rules do not relieve any person from the obligation to disclose information according to the provisions of the BAO. In addition, these rules do not cover matters relating to the tax records of these professionals (their records can be audited by the Austrian revenue authorities). 274. Austrian authorities have also advised that according to the case law developed by the Austrian Supreme administrative court, when information

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is covered by professional secrecy rules, taxpayers have increased obligation to cooperate with revenue authorities. In addition, all information necessary for tax purposes may primarily be required from the taxpayer by the Austrian revenue authorities (see in particular s.143 of the BAO). 275. Pursuant to the Terms of Reference, communications between attorneys and their clients can be protected, however it appears that secrecy provisions contained in Austrian legislation also encompass other professions, in particular accountants and notaries. During the phase1 review, it was not clear whether attorneys or notaries acting as financial intermediaries, trustee or Treuhnder, are allowed under Austrian legislation to disclose to the revenue authorities all information acquired in those capacities. Finally, from both tax and professional secrecy rules, the extent to which information held by lawyers, accountants or civil law notaries can be accessed for the purpose of international exchanges of information was not clear. 276. This issue was further reviewed during the course of the phase2 review, in particular to clearly circumscribe the situations in which professional secrecy rules may prevent the Austrian authorities to access information for EOI purposes. Officials from the Chamber of Civil Notaries indicated that although the information they held, for example when acting as a Treuhnder, would be subject to professional secrecy, this provision would be overridden if they were required to provide such information to a Fiscal Authority. All information in the possession of an accountant can be obtained by the Austrian tax authorities both for domestic purposes and in response to a valid EOI request. Professionals, including lawyers, were bound to provide information to the tax administration as far as this was not in conflict with the obligations arising from the professional secrecy rules as laid down in the particular professional code. All information kept by accountants and notaries on behalf of their clients and requested by tax authorities for tax purposes must be provided upon request. A judicial pronouncement of the Austria Supreme Court (in the case of Oberster Gerichtshof/OGH) of 18October 2012, showed that information related to a criminal tax matter could not be placed with a service provider or professional to avoid access to this information by government authorities. As a result, it may be concluded that professional secrecy rules do not prevent tax authorities accessing information held by notaries or accountants either for domestic or EOI purposes.

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277. After examining all the facts available, the assessment team has concluded that the potential gap that was identified in the phase1 report, does not actually exist. Moreover, practical experience has shown that Austria has not hindered exchanging information in this area.
Determination and factors underlying recommendations
Phase1 determination The element is in place, but certain aspects of the legal implementation of the element need improvement. Factors underlying recommendations Restrictions on access to bank information provided for by Austrias domestic legislation are currently overridden in respect of only 40 of Austria EOI partners. Recommendations Austria should ensure that its competent authority has access to bank information in respect of EOI requests made pursuant to all of its EOI agreements.

Phase2 rating To be finalised as soon as a representative subset of Phase2 reviews is completed Factors underlying recommendation Prior to the enactment of the ADG, Austrias experience of exchanging banking information was very limited. The access to banking information measures provided by the ADG have not yet been tested in practice. Recommendation Austria should monitor access to banking information to ensure that it is in a position to exchange information in line with the international standard.

B.2. Notification requirements and rights and safeguards


The rights and safeguards (e.g.notification, appeal rights) that apply to persons in the requested jurisdiction should be compatible with effective exchange of information.

Not unduly prevent or delay exchange of information (ToRB.2.1)


278. For the agreements signed since 2009, the Administrative Assistance Implementation Act (ADG) published on 8September 2009 sets out the rights and safeguards of persons concerned by a request for information made by a requesting jurisdiction.

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279. For the collection of bank information, the ADG provides for prerequisites to handle an incoming request, in particular, a prior notification procedure. This procedure comprises the following steps: where the information sought relates to bank information, the Federal Ministry of Finance must without delay notify the the individual(s) who have rights of disposition arising out of the business relationship with the credit institution that there has been an international request for administrative assistance and what information has been requested, simultaneously providing notice to the credit institution (s.4(1) ADG); in response to a well-founded application by the the individual(s) who have rights of disposition arising out of the business relationship with the credit institution, the Federal Ministry of Finance will rule on whether the material prerequisites18 for pre-empting banking secrecy have been met (s.4(2) ADG). The purpose of this pre-analysis of the request is to ensure that the incoming request is foreseeably relevant and therefore that administrative assistance can be granted by Austria; the individual concerned can send to the Federal Ministry of Finance an application for an administrative notice containing a determination of the material prerequisites. This must be sent on or before the end of two weeks following notification of the affected persons. That authority must, in that case, issue a decision of first and last instance (s.4(2) ADG); following expiry of the application period or, in the event of an application for a determination by administrative notice, upon expiry of a six-week period from the date the notice was served, the Federal Ministry of Finance will comply without delay with the foreign request for administrative assistance (s.4(3) of the ADG); and in the event that an appeal is filed against that administrative notice, upon application of the appellant, to grant suspensory effect the authority must await the decision of the Constitutional Court or Administrative Court before responding to the EOI request. If the court refuses to grant suspensory effect the competent authority may immediately after that decision submit the requested information to the requesting state without awaiting the final decision of the court (s.4(3)).

18.

i.e.in particular that the identity of the person under examination as well as, in 11 DTCs, to the extent known the name and the address of any person believed to be in possession of the requested information or, in 12 DTCS, the name and the address of this person have been provided.

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280. It is noted that the prior notification procedure implemented by Austria with the ADG has a scope restricted to access to bank information. Access to ownership and accounting information is not affected by this procedure. However, while restricted in its scope, this procedure does not allow any exception as the law clearly states that the authority competent to handle the administrative assistance proceedings must without delay notify the individual(s) who have rights of disposition arising out of the business relationship with the credit institution . 281. The Global Forums Terms of Reference clearly state that notification rules should permit exceptions from prior notification (e.g.in cases in which the information request is of a very urgent nature or the notification is likely to undermine the chance of success of the investigation conducted by the requesting jurisdiction). These exceptions are not allowed in the Austrian legislation. Since 2011, Austria has not amended its domestic legislation to bring it into line with the international standard and has reported that it believes that this procedure is necessary to protect the interests of the taxpayers. 282. Turning to the practical implementation of this matter, it has been stated earlier in this report that Austria has a system of prior notification of the taxpayer in cases where bank information is sought. This prior notification does not apply in respect of ownership information or accounting records. 283. Austria has no actual experience so far, with the new procedure that has been put in place after the enactment of the ADG as no request for banking information within scope has been received. Austria has clarified that when notifying the individual(s) who have rights of disposition arising out of the business relationship with the credit institution, the incoming request will itself never be provided to the taxpayer but only the necessary elements. However, it is not clear what information will be disclosed to the taxpayer in the prior notification document. 284. In the event the individual(s) who have rights of disposition arising out of the business relationship with the credit institution were to appeal the provision of information, and court proceedings take place, the Austrian authorities have stated that the court would only check whether the request is reasonable. On the question of what is reasonable, Austria has reported that the court would be obliged to follow the criteria laid down in the agreements. The Austrian authorities state that it is not expected that any hearings would take place; usually in tax matters, there are no hearings held. 285. Although from a theoretical perspective Austria has already thought about the different steps of the prior notification procedure, how to handle requests for banking information and the consequences the prior notification

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may have on the provision of banking information, the point that emerges is that Austria does not have any practical experience as far as these new procedures are concerned. It is recommended that Austria monitor its new procedures and make sure that their practical implementation is in line with the international standard.
Determination and factors underlying recommendations
Phase1 determination The element is in place, but certain aspects of the legal implementation of the element need improvement. Factors underlying recommendation The Administrative Assistance Implementation Act of 2009 requires the prior notification of the individual concerned when there is a request for bank information and this prior notification procedure does not allow for any exception. Recommendation It is recommended that certain exceptions from prior notification be permitted (e.g.in cases in which the information requested is of a very urgent nature or the notification is likely to undermine the chance of the success of the investigation conducted by the requesting jurisdiction).

Phase2 rating To be finalised as soon as a representative subset of Phase2 reviews is completed Factors underlying recommendation Austria does not have any practical experience of the new procedure to obtain banking information that it has put in place under the Administrative Assistance Implementation Act. Recommendation Besides the introduction of exceptions consistent with the international standard, Austria should, in instances where the prior notification procedure can be applied in compliance with the international standard, monitor the practical implementation of the procedure provided by the Administrative Assistance Implementation Act to ensure that it can meet its obligations to exchange banking information under its EOI arrangements.

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C. Exchanging Information

Overview
286. Jurisdictions generally cannot exchange information for tax purposes unless they have a legal basis or mechanism for doing so. In Austria, the legal authority to exchange information is derived from double tax conventions (DTCs) and tax information exchange agreements (TIEAs) once they become part of Austrias domestic law. This section of the report examines whether Austria has a network of information exchange agreements that would allow it to achieve effective exchange of information in practice. 287. Austrias international exchange of information (EOI) mechanisms cover 92 partner jurisdictions, 87 of them being covered by double taxation conventions (DTCs), 5 by taxation information exchange agreements (TIEAs). Where not updated since March 2009 following Austrias commitment to the standard, these agreements do not allow for exchange of information in compliance with the standard. Austria can also exchange information with its EU counterparts under the scope of the EU Council Directive on Administrative Cooperation in the field of Taxation 2011/16/EU, in force from 1January 2013, concerning mutual assistance by the competent authorities of the Member States in the field of direct taxation and taxation of insurance premiums. 288. Since its commitment to the international standards for transparency and exchange of information for tax purposes in March 2009, Austria has signed 9 DTCs, 23 protocols and 5 TIEAs allowing for the exchange of information, including bank information. The five TIEAs signed by Austria strictly respect the wording of the OECD Model TIEA. All protocols and DTCs include the full wording of Article26 of the OECD Model Tax Convention, including paragraphs 4 and 5, supplemented by additional rules listing the type of information to be provided by the requesting jurisdictions in its request for information. 9 of these agreements, with Belgium; Bosnia and Herzegovina; Bulgaria; Luxembourg; Mexico; Qatar; Serbia; South Africa; and Tajikistan, include provisions requiring the requesting party to provide the name and address of the holder of information when making an

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EOI request. These requirements are unduly restrictive and inconsistent with the standard (see Article5(5) of the OECD Model TIEA and its Commentary). Since its phase1 review, the convention and protocols with Hong Kong, China; San Marino; Singapore and Switzerland have either been amended or clarified to bring them into line with the standard. Following the adoption of the phase1 report, the situation as it stands now is that Austria has 40 EOI relationships that are to the standard (25 covered by a DTC/TIEA and 15 by the EU Directive only). 289. Of the 37 agreements signed since 2009, 15 have been ratified by Austria and are already in force.19 One other is awaiting completion of the ratification process by Austrias counterparts.20 In addition, to give these treaties effect, a new procedure ensuring revenue authorities have access to information held by financial institutions has been enacted (see above, part B of the report). 290. The 34 EOI agreements allowing for exchange of bank information, of which 22 are to the standard, cover some of Austrias main trading partners and neighbor countries, in particular, Germany and Switzerland. In addition, Austria is now party to the new EU Administrative Cooperation Directive which has entered into force on 1January 2013 and cover an additional 15 partners. 291. Each of Austrias agreements includes a confidentiality provision and in addition Austria has a strong domestic confidentiality regime applicable to persons who in the course of their public duties have access to tax information. The rights and safeguards protected under Austrias EOI agreements are consistent with the standard. 292. Although Austria has made progresses in a short period of time, having signed EOI agreements with 27 jurisdictions since its March 2009 commitment to the international standards, 11 of these new agreements have fallen short of the standard in the detail of some of their provisions. It is noted that since 2010 only three of the EOI agreements providing for the exchange of banking information and not meeting the standard have been revised, these being with Hong Kong, China, San Marino and Switzerland. 293. In practice, it is seen that Austria follows sufficiently robust practices that ensure confidentiality throughout the entire EOI process. The information that is received from the requesting jurisdiction and the information that is gathered are both well protected. Austria follows office practices that
19. Andorra; Bahrain; Denmark; Finland; Germany; Georgia; Gibraltar; Ireland; Jersey; Monaco; Netherlands; St. Vincent and the Grenadines; Sweden; Switzerland and the United Kingdom. 20. Belgium.

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are conducive to proper security of the documents and it also has good IT systems in this regard. Austria has, in its practices, been able to ensure that the rights and safeguard that ought to be available to the persons in respect of whom information is exchanged, are protected without hindering effective EOI. 294. Austria has in place a system of responses to incoming requests that is professional, in the sense that it provides all types of information, accurately and respects the needs of confidentiality. The peer input has indicated that the peers are satisfied with the quality of information provided by Austria. The practices followed by Austria also show that normally the information requested is provided in a timely manner. However, it has been indicated by Austrias partners and that Austria does not routinely provide update of status when not in a position to provide the requested information in 90 days. Austria should improve its practices in this area.

C.1. Exchange of information mechanisms


Exchange of information mechanisms should allow for effective exchange of information.

295. Austria has an extensive network of EOI arrangements covering 92 jurisdictions. Between March 2009 and May 2013, 8 DTCs, 15 protocols amending DTCs and 4 TIEAs were signed. All these mechanisms allow for the exchange of bank information. Since then, Austria has revised six treaties21 by entering into protocols and also signed one new DTC22 and one new TIEA23 They all allow for the exchange of bank information. Since 1January 2013, the new EU Council Directive 2011/16/EU has also been in effect, allowing for EOI to the standard with a further 15 partners. 296. The following tabulation indicates under which of its treaties Austria is able to exchange all types of information, including banking information. (i) Number of DTCs/TIEAs that provide exchange of all types of information including banking information 3724
21. Czech Republic; Georgia; Hong Kong, China; Romania; Slovenia; South Africa. 22. Chile. 23. Jersey. 24. Andorra; Bahrain; Belgium; Bosnia and Herzegovina; Bulgaria; Canada; Chile; Cyprus; Czech Republic; Denmark; Finland; France; Germany; Georgia; Gibraltar; Hong Kong, China; Ireland; Jersey; Luxembourg; Libya; Lichtenstein; Mexico; Monaco; Netherlands; Norway; Qatar; Romania; St. Vincent and the Grenadines; San Marino; Serbia; Singapore; Slovenia; South Africa; Sweden; Switzerland; Tajikistan and the United Kingdom.

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(ii) Number of DTCs/TIEAs to the standard 2825 (iii) Number of DTCs/TIEAs to the standard that are in force 1726 (iv) Number of EOI relationships (DTCs, TIEAs and the EU Directive 2011/16/EU) to the standard 4027 (v) Number of EOI relationships to the standard that are in force 3328 297. When more than one legal instrument may serve as the basis for exchange of information for example where there is a bilateral agreement with an EU member which also applies the EU Council Directive 2011/16/EU, the problem of overlap is generally addressed within the instruments themselves. There are no domestic rules in Austria requiring it to choose between mechanisms where it has more than one agreement involving a particular partner and thus the competent authority is free for any exchange to invoke all of the available mechanisms or to choose the most appropriate. 298. Beyond EOI upon request in the field of direct taxation, Austria, as an EU member, is party to the EU VAT common system and, as a consequence, to exchanges of information upon request in the field of VAT taking place under the Council Regulation (EU) No 904/2010 of 7October 2010 on administrative cooperation and combating fraud in the field of value added tax.

25.

Andorra; Bahrain; Canada; Chile; Cyprus; Czech Republic; Denmark; Finland; France; Germany; Georgia; Gibraltar; Hong Kong, China; Ireland; Jersey; Libya; Lichtenstein; Monaco; Netherlands; Norway; Romania; St. Vincent and the Grenadines; San Marino; Singapore; Slovenia; Sweden; Switzerland; and the United Kingdom. 26. Andorra; Bahrain; Cyprus; Denmark; Finland; Germany; Georgia; Gibraltar; Ireland; Jersey; Monaco; Netherlands; Norway; St. Vincent and the Grenadines; Sweden; Switzerland; and the United Kingdom. 27. Andorra; Bahrain; Belgium; Bulgaria; Canada; Chile; Cyprus; Czech Republic; Denmark; Estonia; Finland; France; Germany; Georgia; Gibraltar; Greece; Hong Kong, China; Hungary; Ireland; Italy; Jersey; Latvia; Lithuania; Luxembourg; Malta; Monaco; Netherlands; Norway; Poland; Portugal; Romania; San, Marino; St. Vincent and the Grenadines; Singapore; Slovakia; Slovenia; Spain; Sweden; Switzerland and the United Kingdom. 28. Andorra; Bahrain; Belgium; Bulgaria; Cyprus; Czech Republic; Denmark; Estonia; Finland; France; Germany; Gibraltar; Greece; Hungary; Ireland; Italy; Jersey; Latvia; Lithuania; Luxembourg; Malta; Monaco; Netherlands; Poland; Portugal; Romania; St. Vincent and the Grenadines; Slovakia; Slovenia; Spain; Sweden; Switzerland and the United Kingdom.

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Foreseeably relevant standard (ToRC.1.1)


299. The international standard for exchange of information envisages information exchange upon request to the widest possible extent. Nevertheless it does not allow fishing expeditions, i.e.speculative requests for information that have no apparent nexus to an open inquiry or investigation. The balance between these two competing considerations is captured in the standard of foreseeable relevance which is included in Article26(1) of the OECD Model Taxation Convention set out below: The competent authorities of the contracting states shall exchange such information as is foreseeably relevant to the carrying out of the provisions this Convention or to the administration or enforcement of the domestic laws concerning taxes of every kind and description imposed on behalf of the contracting states or their political subdivisions or local authorities in so far as the taxation thereunder is not contrary to the Convention. The exchange of information is not restricted by Articles1 and 2. 300. Of the 92 treaties signed by Austria, 32 DTCs refer to Article26(1) and make reference to the foreseeable relevance standard as set out in the international standard, and the 5 TIEAs signed by Austria also include such a reference. 301. All protocols or DTCs signed since 2009 include the full wording of Article26 of the OECD Model Tax Convention, including paragraphs 4 and 5. This article is supplemented by a list of additional information that should be provided by the requesting jurisdiction when sending a request. These provisions are based on article5 (5) of the OECD TIEA Model. In 11 of these treaties (Bahrain; Denmark; Finland; France; Germany; Ireland; Libya; the Netherlands; Norway; Sweden; the United Kingdom), the provision is the same as article5 (5) of the TIEA Model, in 8 of them (Belgium; Bosnia and Herzegovina; Bulgaria; Luxembourg; Mexico; Qatar; Serbia; and Tajikistan), the provision requires that the name and address of the person in possession of the requested information in Austria must be provided in the incoming request. The protocol to the convention with South Africa also contains similar restrictions. These restrictions do not conform to the standard. Of these, Austria has signed protocols or exchanges of notes with Hong Kong, China; San Marino; Singapore and Switzerland to bring them in line with the standard. to address the issue. With the coming into effect of the EU Directive 2011/16/EU on from 1January 2013, Austria is also able to exchange information, in line with the international standard with Belgium, Bulgaria and Luxembourg. With regard to the treaty with South Africa Austria has stated that they are contemplating a fresh revision process in this case.

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302. It is also noted that these restrictions apply regardless of the information sought. In particular, it is necessary to provide the name and the address of the person in possession of the requested information in Austria even in cases where the information sought relates to ownership or accounting information. For 2 of these 12 jurisdictions (Singapore and Tajikistan), this is a new development; it was not a requirement under the EOI provisions of the former treaties in place with Austria. 303. All other agreements signed by Austria and not yet updated to meet the international standard refer to the exchange of information where it is necessary, referring to both application of the treaty and domestic laws. The phrase as is necessary is recognised in the commentary to Article26 of the OECD Model Tax Convention to allow for the same scope of information exchange as does the term foreseeably relevant 304. In practice there have been no difficulties in this aspect.

In respect of all persons (ToRC.1.2)


305. For exchange of information to be effective, it is necessary that a jurisdictions obligation to provide information is not restricted by the residence or nationality of the person to whom the information relates or by the residence or nationality of the person in possession or control of the information requested. For this reason the international standards for exchange of information for tax purposes envisages that exchange of information (EOI) mechanisms will provide for exchange of information in respect of all persons. 306. None of the treaties signed by Austria since its commitment to the international standards are restricted, for EOI purposes, by the persons covered by the agreement. Of the 58 treaties that have not been updated since 2009, 32 of them explicitly indicate that the exchange of information is not restricted by article1 of the convention. 307. In practice, no difficulties have arisen with respect to this issue, relating to agreements which meet the international standards.

Exchange of all types of information (ToRC.1.3)


308. Jurisdictions cannot engage in effective exchange of information if they cannot exchange information held by financial institutions, nominees or persons acting in an agency or a fiduciary capacity. Both the OECD Model Tax Convention and the OECD Model TIEA, which are the authoritative sources of the standards, stipulate that bank secrecy cannot form the basis for declining a request to provide information and that a request for information cannot be declined solely because the information is held by nominees or

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persons acting in an agency or fiduciary capacity or because the information relates to an ownership interest. 309. The 23 protocols amending DTCs, the 9 DTCs and the 5 TIEAs signed by Austria since its commitment to the standards contain provisions similar to paragraph5 of Article26 of the OECD Model Tax Convention. These are the treaties signed with: Andorra; Bahrain; Belgium; Bosnia and Herzegovina; Bulgaria; Canada; Cyprus29; Czech Republic; Denmark; Finland; France, Germany; Georgia; Gibraltar; Hong Kong, China; Ireland; Libya; Luxembourg; Mexico; Monaco; the Netherlands; Norway; Qatar; Romania; Saint Vincent and the Grenadines; San Marino; Serbia; Singapore; Slovenia; South Africa; Sweden; Switzerland; Tajikistan; and the United Kingdom. 9 of these agreements (including with Belgium Bulgaria, and Luxembourg) do not meet the standard. Austria can also exchange bank information with 14 other countries that are parties to the EU Directive 2011/16/EU which is in effect from 1January 2013. These countries are Belgium; Bulgaria, Estonia, Greece; Hungary, Italy, Latvia, Lithuania, Luxembourg, Malta, Poland, Portugal, Slovakia and Spain. 310. Austria cannot however exchange bank information under the 58 DTCs that have not been updated since 2009. 311. Peer inputs received during the phase2 review have highlighted that a number of Austrias treaty partners have, during the period under review, requested bank information but been unsuccessful in their request owing to the lack of provision in the treaty enabling the use of the ADG legislation. This has, therefore, been a practical impediment during the period under review and the practical implementation of the ADG should continue to be monitored to ensure it enables the effective exchange of information to the international standard.

29. Footnote by Turkey: The information in this document with reference to Cyprus relates to the southern part of the Island. There is no single authority representing both Turkish and Greek Cypriot people on the Island. Turkey recognizes the Turkish Republic of Northern Cyprus (TRNC). Until a lasting and equitable solution is found within the context of the United Nations, Turkey shall preserve its position concerning the Cyprus issue. Footnote by all the European Union Member States of the OECD and the European Union: The Republic of Cyprus is recognised by all members of the United Nations with the exception of Turkey. The information in this document relates to the area under the effective control of the Government of the Republic of Cyprus..

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Absence of domestic tax interest (ToRC.1.4)


312. The concept of domestic tax interest describes a situation where a contracting party can only provide information to another contracting party if it has an interest in the requested information for its own tax purposes. A refusal to provide information based on a domestic tax interest requirement is not consistent with the international standard. EOI partners must be able to use their information gathering measures even though invoked solely to obtain and provide information to the requesting jurisdiction. 313. All EOI mechanisms signed by Austria since 2009 include the wording of Article26(4) of the OECD Model Tax Convention. However two of the oldest DTCs signed by Austria, with Japan (1961) and Hungary (1976), also state that the competent authorities of both contracting states will not supply information which is not available in the normal course of the administration. Nevertheless exchange of information with Hungary can also take place under the EU Mutual Assistance Directive 77/799/EEC where no such restrictions apply. 314. The 58 other DTCs do not contain any reference to the domestic tax interest concept but as previously mentioned, there is no domestic tax interest requirement in Austria and the Austrian authorities can access all types of information, whether this information is needed for domestic or exchange of information purposes. Austria is able to exchange information, including in cases where the information is not publicly available or where it is not already in possession of the government authorities. 315. A domestic tax interest requirement may exist in some of Austrias partner jurisdictions. In such cases, the absence of a specific provision requiring exchange of information unlimited by domestic tax interest will serve as a limitation on the exchange of information which can occur under the relevant agreement. It is recommended that Austria continues its program of renegotiation of DTCs including in order to incorporate wording in line with Article26(4) of the OECD Model Tax Convention. 316. As already explained in the preceding portions of this report, the Austrian tax authorities can use all their powers of discovery and inspection for obtaining information for EOI purposes. Even in actual practice, it does not make any difference whether the information that needs to be gathered for answering the request is required for domestic tax purposes or not.

Absence of dual criminality principles (ToRC.1.5)


317. The principle of dual criminality provides that assistance can only be provided if the conduct being investigated (and giving rise to an information request) would constitute a crime under the laws of the requested jurisdiction if it had occurred in the requested jurisdiction. In order to be effective,

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exchange of information should not be constrained by the application of the dual criminality principle. 318. None of Austria DTCs or TIEAs specifically includes a dual criminality principle to restrict exchange of information. Austria does not have any domestic legislation resulting in application of such a principle. 319. None of the peers made any adverse comment in this regard. The procedure that is followed by the CLO does not require the existence of dual criminality to trigger its EOI mechanism.

Exchange of information in both civil and criminal tax matters (ToRC.1.6)


320. Information exchange may be requested both for tax administration purposes and for tax prosecution purposes. The international standard is not limited to information exchange in criminal tax matters but extends to information requested for tax administration purposes (also referred to as civil tax matters). 321. All agreements signed by Austria, whether signed before its commitment to the international standards or not, allow for exchange of information in both civil and criminal tax matters with the exception of banking information in old agreements where exchanges can only take place in some criminal tax matters. Austria reports that it has received four requests relating to criminal tax matters in the three years under review.

Provide information in specific form requested (ToRC.1.7)


322. There are no restrictions in Austrias tax treaties or TIEAs that would prevent it from providing information in a specific form, so long as this is consistent with its own administrative practices. Agreements provide that the information must be provided in the form specified by the competent authority of the requesting party, including depositions of witnesses and authenticated copies of original documents. 323. In particular, sections 169 to 173 of the BAO allow the Austrian revenue authorities to summon someone to testify in writing or orally. 324. The Austrian competent authority is prepared to provide information in the specific form requested to the extent permitted under Austrian laws and administrative practices. According to the comments received from Austrias treaty partners, there were no instances where Austria was not in a position to provide the information in the specific form requested or under an acceptable format. Austria reports that in the three years under review it received two requests where it was asked for an authentication certificate for certificates of residence.

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In force (ToRC.1.8)
325. Exchange of information cannot take place unless a jurisdiction has exchange of information arrangements in force. The international standard requires that jurisdictions take all steps necessary to bring information arrangements that have been signed into force expeditiously. 326. In Austria, all EOI mechanisms, are, according to article50 of the Constitution, part of the international law and must be incorporated into Austrian domestic law. To become effective, all EOI mechanisms, either DTCs or TIEAs, must be ratified by both Chambers of the Parliament (art.50(1)(1) Constitutional Law with respect to approval by the Chamber of Representatives; art.50(2)(2) for approval by the Chamber of States). 327. Since the adoption of the phase1 report, the number of DTCs/TIEAs that are in force stands at 17.30 One other treaty has been ratified by Austria but still need to be by its partners (Belgium). It has been mentioned earlier that Austria has 40 EOI relationships that are to the standard, including countries covered by the EU Directive 2011/16/EU. Of these Austria 33 are in force.31

Be given effect through domestic law (ToRC.1.9)


328. For information exchange to be effective, the parties to an EOI arrangement need to enact legislation necessary to comply with the terms of the arrangement. 329. Austrian authorities have broad powers to access any type information except banking information. To give effect to the agreements signed since March 2009 and its commitment to the international standard of transparency, Austria enacted in September 2009 the Administrative Assistance Implementation Act, granting access to bank information for international EOI matters to the Federal Ministry of Finance. Where the agreement contains wording akin to Article26(5) of the OECD Model Tax Convention (as detailed in part B.1 of this report) Austrias Federal Ministry of Finance can access bank information to respond to requests for information made under such arrangements.
30. Andorra; Bahrain; Cyprus; Denmark; Finland; Germany; Georgia; Gibraltar; Ireland; Jersey; Monaco; Netherlands; Norway; St. Vincent and the Grenadines; Sweden; Switzerland and the United Kingdom. 31. Andorra; Bahrain; Belgium; Bulgaria; Cyprus; Czech Republic; Denmark; Estonia; Finland; France; Georgia; Germany; Gibraltar; Greece; Hungary; Ireland; Italy; Jersey; Latvia; Lithuania; Luxembourg; Malta; Monaco; Netherlands; Poland; Portugal; Romania; St. Vincent and the Grenadines; Slovakia; Slovenia; Spain; Sweden; and the United Kingdom.

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Determination and factors underlying recommendations


Phase1 determination The element is in place, but certain aspects of the legal implementation of the element need improvement. Factors underlying recommendations As a result of domestic law limitations with respect to access to information for EOI purposes generally and access to bank in particular, only 40 of Austrias 92 EOI relationships for effective exchange of information to the standard. Of these 40 relationships, 33 are in force. Of the 34 agreements signed by Austria since its commitment to the standard, 9 establish identification requirements for the holder of information in Austria which are inconsistent with the international standard. Recommendations Austria should ensure that all its agreements provide for exchange of information to the standard.

In line with its commitment to the international standard, Austria should ensure that the identification requirements in all of its new EOI mechanisms conform with the international standard.

Phase2 rating To be finalised as soon as a representative subset of Phase2 reviews is completed

C.2. Exchange of information mechanisms with all relevant partners


The jurisdictions network of information exchange mechanisms should cover all relevant partners.

330. The standards require that jurisdictions exchange information with all relevant partners, meaning those partners who are interested in entering into an information exchange arrangement. Agreements cannot be concluded only with counterparties without economic significance. If it appears that a jurisdiction is refusing to enter into agreements or negotiations with partners, in particular ones that have a reasonable expectation of requiring information from that jurisdiction in order to properly administer and enforce its tax laws it may indicate a lack of commitment to implement the standards. 331. Since its commitment to the international standards, Austria has only concluded DTCs that contain text akin to a full version of Article26 of the

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OECD Model Tax Convention (including paragraphs 4 and 5). Austria has also signed five TIEAs which are in line with the OECD Model TIEA. 332. Austrias tax treaty negotiations unit consists of five to six persons, who also handle matters related to Advance Pricing Agreements (APA) and Mutual Agreement Procedures (MAP). This unit is also taking care of the Foreign Account Tax Compliance Act (FATCA) negotiations. The priority for the EOI unit is the general update of the existing treaties and the negotiation of new treaties. 333. Austria has an extensive network of EOI mechanisms covering 92 jurisdictions, 46 of them allowing for the exchange of banking information, even though only 40 are in line with the international standard.32 The network of signed agreements allowing for the exchange of bank information covers to date: 23 OECD members33; all Austrias EU partners; 7 of the G20 members34; 40 of the Global Forum member jurisdictions35; and 4 of Austrias main trading partners (Hungary, Poland, Switzerland and Germany);

334. In addition to the treaties already ratified, Austria, has mentioned that pending negotiations to update the existing DTCs are underway with Australia; Brazil; China; Croatia; Greece; Hungary; India; Indonesia; Italy; South Korea; Kazakhstan; Malaysia; New Zealand; Poland; Portugal; the Russian Federation; Saudi Arabia; the Slovak Republic; Spain; Turkey; Turkmenistan; Ukraine and Vietnam.
32. Andorra; Bahrain; Belgium; Bulgaria; Cyprus; Czech Republic; Denmark; Estonia; Finland; France; Georgia; Germany; Gibraltar; Greece; Hungary; Ireland; Italy; Jersey; Latvia; Libya; Lithuania; Liechtenstein; Luxembourg; Malta; Monaco; Netherlands; Poland; Portugal; Romania; St. Vincent and the Grenadines; Singapore; Slovakia; Slovenia; Spain; Sweden; Switzerland; Tajikistan and the United Kingdom. Belgium; Canada; Chile; Denmark; Estonia; Finland; France; Germany; Greece; Hungary; Ireland; Italy; Luxembourg; Mexico; the Netherlands; Norway; Poland; Portugal; Slovakia; Slovenia; Sweden; Switzerland and the United Kingdom. Canada; France; Germany; Italy; Mexico; South Africa; and the United Kingdom. All other G20 members but Argentina, are covered by a DTC not meeting the standard. Andorra; Bahrain; Belgium; Canada; Chile; Cyprus; Czech Republic; Denmark; Estonia; Finland; France; Georgia; Germany; Gibraltar; Hong Kong, China; Hungary; Ireland; Italy; Jersey Latvia; Lithuania; Luxembourg; Liechtenstein; Malta; Mexico; Monaco; the Netherlands; Norway; Poland; Portugal; Qatar; Romania; Saint Vincent and the Grenadines; San Marino; Singapore; South Africa; Spain; Sweden; Switzerland and the United Kingdom.

33. 34. 35.

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335. Austria is actively working to further expand its network of agreements. New DTCs are also being negotiated with Argentina; Egypt; Iceland; Israel; Japan; Liechtenstein; Oman and Sri Lanka; Syria and TIEAs are being negotiated with The Bahamas; Cayman Islands; Guernsey; and Liberia. 336. Ultimately, the international standard requires that a jurisdiction exchange information with all relevant partners, meaning those partners who are interested in entering into an information agreement. India had approached Austria in 2009 indicating its interest in entering into negotiations to update the existing DTC. While a meeting took place in April 2010, the matter has not been completely resolved as yet. Guernsey has mentioned having approached Austria to conclude a TIEA. In response to this request, Austria provided Guernsey with a draft TIEA in August 2009. The negotiations were subsequently concluded in September 2011; but the signing of the Agreement is still pending, as Guernsey has not received notification that Austria has completed its domestic formalities in order to do so. 337. Austria authorities have advised that, with India, there may be certain misunderstandings on the contents of the Austrian proposal which led to delay progress of the negotiations. In the meantime discussions have been reopened with India and Austria hopes to finalise them soon.
Determination and factors underlying recommendations
Phase1 determination The element is in place, but certain aspects of the legal implementation of the element need improvement. Factors underlying recommendations Of the 92 EOI arrangements concluded by Austria, only 40 meet the international standard. Austria has not on all occasions successfully progressed negotiations to establish EOI arrangements when requested to do so. Recommendations Austria should continue to develop its EOI network to the standard with all relevant partners. Austria should actively work to progress negotiations and establish exchange of information agreements with all partners who are interested in entering into an information exchange arrangement with it.

Phase2 rating To be finalised as soon as a representative subset of Phase2 reviews is completed

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C.3. Confidentiality
The jurisdictions mechanisms for exchange of information should have adequate provisions to ensure the confidentiality of information received.

Information received: disclosure, use and safeguards (ToRC.3.1)


338. Governments would not engage in information exchange without the assurance that the information provided would only be used for the purposes permitted under the exchange mechanism and that its confidentiality would be preserved. Information exchange instruments must therefore contain confidentiality provisions that spell out specifically to whom the information can be disclosed and the purposes for which the information can be used. In addition to the protections afforded by the confidentiality provisions of information exchange instruments, countries generally impose strict confidentiality requirements on information collected for tax purposes. 339. All treaties recently signed by Austria contain a confidentiality provision in line with Article26(2) of the OECD Model Tax Convention. Any information received under paragraph1 by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and administrate bodies) concerned with the assessment or collection of, the enforcement or prosecution in respect of, the determination of appeals in relation to the taxes referred to in paragraph1, or the oversight of the above. Such persons or authorities shall use the information only for such purposes. They may disclose the information in public court proceedings or in judicial decisions. 340. Austrias 1981 DTC with the (former) Union of Soviet Socialist Republics, which still applies with respect to Tajikistan and Turkmenistan, contains no provisions to ensure the confidentiality of information received. It is recommended that Austria continues ensuring that appropriate confidentiality of information is maintained in exchanges of information with Tajikistan and Turkmenistan. A treaty with Tajikistan has already been signed on 7June 2011 which follows those confidentiality requirements 341. In addition, Austrian domestic tax law contains provisions to ensure the confidentiality of information exchanged namely a professional secrecy provision applicable to tax officers, and provisions to protect both the public and private interests in maintaining confidentiality of tax information. Section48a of the BAO provides for strict secrecy obligations for public officials and other persons involved in tax proceedings. This ensures confidentiality covers disclosure of taxpayers related information, disclosure of the contents of files as well as disclosure of the details of tax proceedings.

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342. When the confidentiality obligations are not fulfilled by a civil servant, section251 of the Fiscal Offence Act foresees the application of the sanctions provided for by section310 of the Austrian Criminal Code; imprisonment for up to three years. 343. In practice, Austria authorities have strong rules to ensure that all information received is kept confidential. First, all documents related to EOI requests are stored electronically. Where there are physical documents they are stored in a storage area, where access is allowed only to authorised personnel. Second, when requests are sent to the local tax office, they are sent electronically. All these communications carry the confidentiality stamp placed by the CLOs office. Where access is sought to any of the data that is stored electronically, it has to be justified and this justification must be linked to the actual functions of the official. The need to maintain physical files connected with EOI matters has been progressively eliminated. Austria reports that there are automatic backup procedures in place for the data of the CLO. The IT centre of the Republic of Austria is responsible for this backup. The data is stored on a special server which is only accessible to the CLO staff. A daily storage on this server of the tax administration is provided. This server is mirrored daily on a national high security server. Information could only be lost if it is stored the same day. 344. Apart from this, Austrian officials take care to follow a clean desk policy. This ensures that important papers are not left unattended where they may fall into the hands of unauthorised persons. While Austria does not have a formal manual on office procedures, these measures are given wide publicity through training exercise and the staff is regularly sensitised to the issue of confidentiality. This includes officers working in the office of the CLO and the EOI unit and also those in the local tax office. The IT systems are also so developed that officers can access their computers only with a personal customised key or token. 345. Austria has sufficient safeguards in its procedures and practices to ensure confidentiality. In practice, there have been no cases in which information received by the competent authority from an EOI partner has been disclosed other than in accordance with the terms under which it was provided. However, Austria has reported that no common or standardised notice currently exists. Austria has also clarified that it will never pass on such information as the original request received, consultation protocols, notices of other authorities, reports and similar documents. 346. However, Austria has stated that the underlying principle is that the taxpayer should have as much information as is required to defend his tax interests. Therefore, it is not clear as to how much information the taxpayer will be allowed to see in this process. It is therefore recommended that Austria makes sure that only the elements that are necessary to collect

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information from taxpayers will be disclosed during the process of answering an information request.

All other information exchanged (ToRC.3.2)


347. The confidentiality provisions in Austrias agreements use the standard language of Article26(2) of the OECD Model Tax Convention and Article8 of the OECD TIEA Model and do not draw a distinction between information received in response to requests and information forming part of the requests themselves. As such, these provisions apply equally to all requests for such information, background documents to such requests, and any other document reflecting such information, including communications between the requesting and requested jurisdictions and communications within the tax authorities of either jurisdiction.
Determination and factors underlying recommendations
Phase1 determination The element is in place. Phase2 rating To be finalised as soon as a representative subset of Phase2 reviews is completed Factors underlying recommendation It is not clear as to how much information will be revealed to the taxpayer concerned by the Austrian authorities in order to answer an information request. Recommendation Austrias should make sure that only the elements that are necessary to collect information from taxpayers will be disclosed during the process of answering an information request.

C.4. Rights and safeguards of taxpayers and third parties


The exchange of information mechanisms should respect the rights and safeguards of taxpayers and third parties.

Exceptions to requirement to provide information (ToRC.4.1)


348. The international standard allows requested parties not to supply information in response to a request in certain identified situations. Among other reasons, an information request can be declined where the requested information would disclose confidential communications protected by attorney-client privilege. Attorney-client privilege is a feature of the legal systems of many countries.

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349. All of the agreements concluded by Austria since 2009 incorporate wording modeled on Article26(2) of the OECD Model Tax Convention or Article8 of the OECD Model TIEA providing that requested jurisdictions are not obliged to provide information which would disclose any trade, business, industrial, commercial or professional secret or information which is the subject of attorney-client privilege/legal privilege or information the disclosure of which would be contrary to public policy. 350. The practical application of the procedures that protect the rights of taxpayers that was reviewed indicates that Austria acts in a manner that ensures this.
Determination and factors underlying recommendations
Phase1 determination The element is in place. Phase2 rating To be finalised as soon as a representative subset of Phase2 reviews is completed

C.5. Timeliness of responses to requests for information


The jurisdiction should provide information under its network of agreements in a timely manner.

Responses within 90 days (ToRC.5.1)


351. In order for exchange of information to be effective, the information needs to be provided in a timeframe which allows tax authorities to apply it to the relevant cases. If a response is provided but only after a significant lapse of time the information may no longer be of use to the requesting authorities. This is particularly important in the context of international co-operation as cases in this area must be of sufficient importance to warrant making a request. 352. Over the last three years (2009-11), Austria received a total of 829 requests for information (calculation based on the number of letters received); 241 requests received in 2009, 276 in 2010 and 312 in 2011. Austria has reported that of these information could not be provided in 33 cases. 10 of these cases pertained to banking information and in 23 cases the information could not be exchanged as the applicable Double Taxation Convention only allowed limited exchange of information. According to the available figures, in the last three years, Austria exchanged information with 38 partners of which the most significant, in terms of the number of requests received are Germany, Hungary and Poland.

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353. For these years, the number of requests where Austria answered within 90 days, 180 days, one year or more than one year, are tabulated below.
2009 Num. Total number of requests received* Full response**: <90 days <180 days (cumulative) <1 year (cumulative) 1 year+ Declined for valid reasons Failure to obtain and provide information requested Requests still pending at date of review % 241 100% 161 204 225 5 8 67% 85% 93% 2% 3% 2010 Num. % 276 100% 212 247 266 3 5 77% 89% 96% 1% 2% 2011 Num. % 312 100% 216 266 290 7 3 69% 85% 93% 2% 1% Average Num. % 276 100% 196 239 260 5 5 71% 87% 94% 2% 2%

2% 0%

1% 0%

6 6

2% 2%

3 1

1% 1%

*  Austria counts each written request from an EOI partner as one EOI request even where more than one person is the subject of an inquiry and/or more than one piece of information is requested. **  The time periods in this table are counted from the date of receipt of the request to the date on which the final and complete response was issued.

354. In this respect, it may be mentioned that with the new EU Council Directive on Administrative Cooperation in the field of Taxation 2011/16/EU that entered in effect on 1January 2013, the Austrian authorities have set their standard time limit to answer a request to comply with the requirements of the new directive (following this directive, the information must be exchanged within six months of the receipt of the request for complex cases (where information is not readily available), except when the requested party already has this information available; in the latter cases, answers must be provided within two months). In practice, Austrias authorities have reported that they have not set up, as a practice, a 90-day timeline to answer incoming requests. 355. Peer inputs received prior to the phase2 review indicated that in cases where Austria does not provide information in 90 days, it does not provide status updates unless specifically asked for. Austria states that they are in the process of changing their procedures in order to set up a system that will ensure the provision of status updates. It may be mentioned here that the phase2 review found that of the 829 requests that were received in the three year review period, Austria has answered 589 (71%) in less than 90 days.

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356. In cases where delay has occurred, Austria has given the following reasons: (i) The applicant state asks for information concerning a taxpayer who is not resident in Austria. (ii) In connection with requests for bank information received before the adoption of the Administrative Assistance Implementation Act, Austria asked the applicant State to provide confirmation (consent) of the taxpayer concerned, to disclose the bank information. The taxpayer refused to do so and so it was not possible to provide the requested information due to article38 of the Austrian Federal Banking Act. (iii) Taxpayer concerned has more than one domicile in Austria: in this case more than one Austrian tax office are involved in the course of preparing an answer to the request. (iv) The competent tax office does not answer the case despite several reminders of the CLO. (v) The change in the competence of the Austrian tax offices to answer the request leads to delays and in addition the report may be incomplete. (vi) The requested information is very complex, e.g.where the investigation and proof of possible money transfers between Austrian and the applicant state via accounts held in a third country is required in the course of answering a request. Austria has mentioned that the cases where it has taken more than 180 days to answer are those that involve (a)calculation of profits, (b)requests in connection with a loan, (c)request in connection with the method of payment, (d)request in connection with license fees, (e)verification of documents, (f)requests in connection with clarification of investment between holding and affiliate companies, (g)verification if transactions have been carried out, (h)request in connection with suspected fraud, (i)request in connection with pension payments, (j)verification of services, (k)requests in connection with transfer pricing, (l)requests in connection with taxation and residence, (m)request in connection with the management board of a company in Austria, (n)sale of company shares, (o)to provide documents and tax returns, (p)requests in connection with interest income, (q)investigation in connection with pecuniary or financial circumstances and, (r)requests in connection with increase of capital. 357. Over the period under review, answers were not provided within 90 days in 29% of cases. This appears to stem, primarily, from the time that

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Austria allows the local tax offices to obtain the necessary information (four months). The CLO has explained that they are adapting their procedures (and that of the local tax office) to the new timeframes provided by the new EU Directive 2011/16/EU. The rules provided by this Directive will be applied to all incoming requests received. The CLOs office also sends their first reminders to the local tax office (requesting a response) only when this time limit is drawing to a close. This is coupled with the fact that Austria does not normally provide status updates in the 90 day period. It is therefore recommended that Austria continues to enhance its practices in this area in order to provide status updates when not in a position to answer an incoming request within 90 days. However, despite these practices, Austria has managed to provide information within 90 days in relation to 71% of the incoming requests.

Organisational process and resources (ToRC.5.2)


358. The Federal Ministry of Finance is the competent authority for EOI in the field of direct taxation. EOI mechanisms are negotiated by Division for international tax law of this Ministry. 359. The Head of the CLO has two teams under him (in Vienna) with a total of 20 people working in these two teams including the team leaders. Apart from these two teams in Vienna there is one person located at Linz, one at Innsbruck and two at Salzburg. These persons located outside Vienna, were earlier deployed for operation of the treaty with Germany but are now being integrated with the head office of the CLO. These persons, therefore, now deal with the requests that are received from Germany, through the office of the CLO. 360. Looking at the practical application of the organisational processes, when a request is first received by the CLO office, it is checked to see whether it is understandable and uses a common language. When necessary, it is translated. It is then checked whether all conditions of the relevant legal base are fulfilled. If that is not so, a request for clarification is sent to the requesting state. Austria has reported that it has sought clarification from its treaty partners in 13 cases in 2011 (3 cases in 2010 and in 8 cases in 2009). The reasons for seeking clarifications could range from the legal basis of seeking the information (especially in the case of old agreements) to some further details of the identity of the person in respect of whom information is sought. In two cases, translation was sought. However, in no case the delay was longer than two months, on account of the clarification sought. 361. Austria has reported that there is usually a three month deadline for the requesting jurisdiction to clarify the request. If there is no reaction after the elapse of three months, the request is declined. Austria informs

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the requesting jurisdiction about the decline of the request. For this, Austria has not developed any forms other than the standard EU forms, but these forms are used for other OECD countries as well. It would be worthwhile to mention here that Austria expects that each request will be accompanied by a short explanation about the background of the request. It expects that the questions have to be understandable and clear. There has to be a statement of the requesting state that it respects the terms of reciprocity, exhaustiveness, secrecy and disclosure. Austria states that in the three years under review, it has not refused any request on the grounds of inadequate information, that the request is not foreseeably relevant or a fishing expedition. 362. In practice, as soon as a request is received, the CLOs office will acknowledge receipt of the request if the requesting jurisdiction specifically asks for it. Once the request is received, a reference number is added to enable future tracking of the request. There are two specifically designated staff who fill in all the basic parameters and assign the specific number to the request. The CLO is currently using an extensive excel-based monitoring system where all cases are recorded, this system is manually uploaded with extensive details of each request and following the insertion of the data he is able to be used to track the progress of each request, including alerting officials in the CLO when deadlines are drawing near. This is accessible to all the staff members in the CLO. As has been mentioned earlier, the Austria CLO will try to answer the request on its own. Austria has reported that in 2011, the CLO could answer 18 cases on its own (14 in 2010 and seven in 2009). 363. Once the CLO has concluded that the information is such that it needs to be transmitted to the local office, the request is transmitted electronically to the local tax office. This will carry the confidential stamp of the CLOs office. The local tax office is normally given four months to answer these requests, especially if there is an external examination involved. Two weeks before this four month deadline (if the information is not yet received from the local office until then), the system in the CLOs office will display an alert. The CLOs office sends a reminder to the local office. The system that has been put in place is such that by the time the six month deadline is reached, the CLOs office should have issued at least three reminders. In collecting information, the tax offices may also receive assistance from other authorities and have access to electronic databases that are maintained by other authorities. 364. It must also be kept in mind that there is no dedicated EOI unit in the local tax office. The tax official who is assigned the task of collecting the information requested has other regular tasks to perform. When the local tax office has to approach a third party or the taxpayer, they are not required

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to fix a definite time frame within which the information is to be provided, unless the urgency is specified in the request. 365. Once the local tax office has received the necessary information, it electronically transmits the same to the CLO. The CLO will then in turn, expeditiously, forward the information to the requesting jurisdiction In cases where the CLO answers the request on its own, it will provide the information to the requesting jurisdiction under intimation to the local tax office. The CLO also seeks feedback from all parties involved. In case Austria is not able to send the requested information it informs the other jurisdiction. This is usually done using the EU-standard forms. There is no standard refusal letter. 366. There is no published procedural manual for dealing with incoming requests (for use by either the CLO or the relevant officials in the local tax offices The simple rule is that the local tax office must deal with the request as it would do in a domestic case. The powers that the local tax office exercises in this regard would be the same that it exercises in a domestic case. They can use all their powers of discovery and inspection in this regard. Given the practices as they exist, there are no restrictions on the powers and the abilities of the CLO to obtain information related to identity and ownership or accounting records. Austria has reported that in two cases, search and seizure operations were carried to answer an EOI request concerning a criminal tax matter, by the Austrian Tax Investigation Service. 367. Despite the fact that there is no published manual on how to deal with incoming requests, the office of the CLO has taken a number of initiatives to disseminate best practice among officials. All officials joining the office of the CLO have to undergo a training course in this area. They are also given regular refresher training as they continue to do their tasks. Similarly, the officials of the local tax offices are given training and exposed to sensitisation programs so that they are conversant with the practices in this regard. 368. Looking at the practice that is followed by Austria and the fact that the peer input also indicated that in most cases, Austria has not provided a status report in 90 days, there appears to be a gap in this matter.

Unreasonable, disproportionate or unduly restrictive conditions for EOI (ToRC.5.3)


369. Exchange of information should not be subject to unreasonable, disproportionate or unduly restrictive conditions. Apart from the issues identified earlier in the report there are no other factors that could hinder effective EOI.

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Determination and factors underlying recommendations


Phase1 determination The assessment team is not in a position to evaluate whether this element is in place, as it involves issues of practice that are dealt with in the Phase2 review. Phase2 rating To be finalised as soon as a representative subset of Phase2 reviews is completed In a number of cases, Austria has not provided status updates within the 90 day period. Austria should take measures to ensure that it provides status updates to its treaty partners within 90 days where a complete response to a request is not possible within that timeframe.

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Summary of Determinations and FactorsUnderlyingRecommendations

Determination

Factors underlying recommendations

Recommendations

Jurisdictions should ensure that ownership and identity information for all relevant entities and arrangements is available to their competent authorities. (ToR A.1) The element is not in place Although Austria has put in place new provisions to prohibit the issue of bearer shares by unlisted joint-stock companies, the mechanisms to identify the owners of bearer shares previously issued by these companies may not be sufficient. In addition, until full effect is given to these provisions (1January 2014), bearer shares can still be issued or transferred without identification of their holders. Information regarding the ownership of foreign companies incorporated outside the EU and that are resident for tax purposes in Austria may, under certain circumstances, not be available Phase2 rating: To be finalised as soon as a representative subset of Phase2 reviews is completed Austria should introduce mechanisms ensuring the identification of the holders of bearer shares in all instances.

In such cases, Austria should ensure that ownership and identity information is available.

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Factors underlying recommendations

Determination

Recommendations

Jurisdictions should ensure that reliable accounting records are kept for all relevant entities and arrangements. (ToR A.2) The element is in place. In the case of fiduciary relationship, there are some uncertainties as regards the detailed obligations to keep accounting records where the Treugeber or settlor is not resident in Austria and assets held through the fiduciary are located abroad. Phase2 rating: To be finalised as soon as a representative subset of Phase2 reviews is completed Banking information should be available for all account-holders. (ToR A.3) The element is in place. Phase2 rating: To be finalised as soon as a representative subset of Phase2 reviews is completed Competent authorities should have the power to obtain and provide information that is the subject of a request under an exchange of information arrangement from any person within their territorial jurisdiction who is in possession or control of such information (irrespective of any legal obligation on such person to maintain the secrecy of the information). (ToR B.1) The element is in place, but certain aspects of the legal implementation of the element need improvement. Phase2 rating: To be finalised as soon as a representative subset of Phase2 reviews is completed Restrictions on access to bank information provided for by Austrias domestic legislation are currently overridden in respect of only 40 of the 92 signed agreements. Prior to the enactment of the ADG, Austrias experience of exchanging banking information was very limited. The access to banking information measures provided by the ADG have not yet been tested in practice. Austria should ensure that its competent authority has access to bank information in respect of EOI requests made pursuant to all of its EOI agreements. Austria should monitor access to banking information to ensure it is in a position to exchange information in line with the international standard. Austria should make it clear that reliable accounting records are kept in the case of fiduciary relationships in any situation.

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EXECUTIVE SUMMARY 109

Determination

Factors underlying recommendations

Recommendations

The rights and safeguards (e.g.notification, appeal rights) that apply to persons in the requested jurisdiction should be compatible with effective exchange of information. (ToR B.2) The element is in place, but certain aspects of the legal implementation of the element need improvement. The Administrative Assistance Implementation Act of 2009 requires the prior notification of the individual concerned when there is a request for bank information and this prior notification procedure does not allow for any exception. It is recommended that certain exceptions from prior notification be permitted (e.g.in cases in which the information requested is of a very urgent nature or the notification is likely to undermine the chance of the success of the investigation conducted by the requesting jurisdiction). Besides the introduction of exceptions consistent with the international standard, Austria should, in instances where the prior notification procedure can be applied in compliance with the international standard, monitor the practical implementation of the procedure provided by the Administrative Assistance Implementation Act to ensure that it can meet its obligations to exchange banking information under its EOI arrangements.

Phase2 rating: To be finalised as soon as a representative subset of Phase2 reviews is completed

Austria does not have any practical experience of the prior notification procedure to obtain banking information that it has put in place under the Administrative Assistance Implementation Act.

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Factors underlying recommendations

Determination

Recommendations

Exchange of information mechanisms should allow for effective exchange of information. (ToR C.1) The element is in place, but certain aspects of the legal implementation of the element need improvement. As a result of domestic law limitations with respect to access to information for EOI purposes generally and access to bank in particular, only 40 of Austrias 92 EOI relationships for effective exchange of information to the standard. Of these 40 relationships, 33 are in force. Of the 37 agreements signed by Austria since its commitment to the standard, 9 establish identification requirements for the holder of information in Austria which are inconsistent with the international standard. Phase2 rating: To be finalised as soon as a representative subset of Phase2 reviews is completed The jurisdictions network of information exchange mechanisms should cover all relevant partners. (ToR C.2) The element is in place, but certain aspects of the legal implementation of the element need improvement. Of the 92 EOI arrangements concluded by Austria, only 40 meet the international standard. Austria has not on all occasions successfully progressed negotiations to establish EOI arrangements when requested to do so. Austria should continue to develop its EOI network to the standard with all relevant partners. Austria should actively work to progress negotiations and establish exchange of information agreements with all partners who are interested in entering into an information exchange arrangement with it. Austria should ensure that all its agreements provide for exchange of information to the standard.

In line with its commitment to the international standard, Austria should ensure that the identification requirements in all of its new EOI mechanisms conform with the international standard.

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Determination Phase2 rating: To be finalised as soon as a representative subset of Phase2 reviews is completed

Factors underlying recommendations

Recommendations

The jurisdictions mechanisms for exchange of information should have adequate provisions to ensure the confidentiality of information received. (ToR C.3) The element is in place. Phase2 rating: To be finalised as soon as a representative subset of Phase2 reviews is completed It is not clear as to how much information will be revealed to the taxpayer concerned by the Austrian authorities in order to answer an information request Austrias should make sure that only the elements that are necessary to collect information from taxpayers will be disclosed during the process of answering an information request.

The exchange of information mechanisms should respect the rights and safeguards of taxpayers and third parties. (ToR C.4) The element is in place. Phase2 rating: To be finalised as soon as a representative subset of Phase2 reviews is completed The jurisdiction should provide information under its network of agreements in a timely manner. (ToR C.5) The assessment team is not in a position to evaluate whether this element is in place, as it involves issues of practice that are dealt with in the Phase2 review. Phase2 rating: To be finalised as soon as a representative subset of Phase2 reviews is completed In a number of cases, Austria has not provided status updates within the 90 day period. Austria should take measures to ensure that it provides status updates to its treaty partners within 90 days where a complete response to a request is not possible within that timeframe.

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Annex 1:Jurisdictions Response to the Review Report36


Austria welcomes and appreciates all the efforts dedicated to the Phase2 assessment and thanks the PRG for the fair and comprehensive report on the legal and practical administrative situation in Austria. Austria is certainly willing to consider carefully all the proposals made and to respect the recommendations for legal changes which were taken over from the Phase1 report. Concerning ToR A.1 Austria regrets that despite fundamental changes in the Austrian legislation the element was still considered to be not in place which might lead to a wrong impression in comparison to other jurisdictions which still did not make any efforts to remedy the legal situation concerning bearer shares. We expect that this position will be reconsidered in the course of the forthcoming rating discussion, thereby taking into consideration the already existing serious consequences for non-compliant shareholders and companies. In the meantime Austria will of course monitor the results of the legal changes already made and report to the PRG in due time. Austria will continue the on-going process of renegotiating the current tax treaty network with a view to adapt it to the OECD standard with all relevant partners. At the domestic level Austria is currently preparing changes to the Administrative Assistance Implementation Act (ADG) with a view to closely follow the recommendations for legal changes concerning the notification procedure which is only applicable in cases where bank information is sought by the requesting state. These legal changes will also have to follow from recent changes in the Austrian constitutional law concerning legal procedures before tax courts and will also cover the recent amendments made in July 2012 to the OECD-Commentary on Article26 of the OECD-Model Convention in respect of group requests. As far as the timeliness of responding foreign requests is concerned Austria has already started to improve the administrative and technical
36. This Annex presents the Jurisdictions response to the review report and shall not be deemed to represent the Global Forums views.

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environment and will also continue to increase its efforts to meet the expectations for timely status updates. Concerning recommendation C.3 where recently doubts have arisen as to whether Austria is in a position to adequately protect confidentiality of information received from other competent authorities Austria wishes to express that both the Austrian procedural law and the administrative practice are in line with the considerations made in the Commentary on Article26 of the OECD-Model. Elements of a foreign request which are not necessary to collect information from taxpayers will not be disclosed to the taxpayer when answering a foreign request. Austria will carefully monitor that element in its EOI practice and clarify that principle if necessary explicitly in future guidelines.

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Annex 2:List of All Exchange-of-Information Mechanisms inForce

Jurisdiction 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Albania Algeria Andorra37 Armenia Australia Azerbaijan Bahrain Barbados Belarus Belgium Belize Bosnia and Herzegovina Brazil Bulgaria Canada China

Type of EoI arrangement DTC DTC TIEA DTC DTC DTC DTC DTC DTC DTC Protocol EU Directive 2011/16/EU DTC DTC DTC DTC EU Directive 2011/16/EU DTC Protocol DTC

Date signed 14 Dec 2007 17 Jun 2003 17 Sep 2009 27 Feb 2002 8 Jul 1986 4 Jul 2000 2 Jul 2009 27 Feb 2006 16May 2001 29 Dec 1971 09 Oct 2009 15 Feb 2011 8May 2002 16 Dec 2010 24May 1975 20July 2010 15 Feb 2011 9 Dec 1976 9 Mar 2012 10April 1991

Date in force 1 Sep 2008 1 Dec 2006 10 Dec 2010 1 Mar 2004 1 Sept 1988 23 Feb 2001 1 Feb 2011 1 Apr 2007 9March 2002 28June 1973 Pending 1 Jan 2013 1 Dec 2003 1 Jan 2012 1 Jul 1976 3 Feb 2011 1 Jan 2013 17 Feb 1981 Pending 1 Nov 1992

37.

All agreements in bold are agreements allowing for exchange of bank information.

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Type of EoI arrangement DTC DTC DTC DTC 20 Cyprus38 Protocol EU Directive 2011/16/EU DTC 21 Czech Republic Protocol EU Directive 2011/16/EU DTC 22 Denmark 23 Egypt 24 Estonia Protocol EU Directive 2011/16/EU DTC DTC EU Directive 2011/16/EU DTC 25 Finland Protocol EU Directive 2011/16/EU

Jurisdiction 17 18 19 Chile Croatia Cuba

Date signed 6 Dec 2012 21 Sep 2000 26 Jun 2003 20 Mar 1990 4May 2012 15 Feb 2011 8 Jun 2006 9 Mar 2012 15 Feb 2011 25May 2007 16 Sep 2009 15 Feb 2011 16 Oct 1962 5 Apr 2001 15 Feb 2011 26 Jul 2000 04 Mar 11 15 Feb 2011

Date in force 27 Jun 2001 12 Sept 2006 1 Jan 1991 1April 2013 1 Jan 2013 22 Mar 2007 Pending 1 Jan 2013 28March 2008 01May 2010 1 Jan 2013 28 Oct 1963 12 Nov 2002 1 Jan 2013 1 Apr 2001 1 Dec 2011 1 Jan 2013

38. Footnote by Turkey: The information in this document with reference to Cyprus relates to the southern part of the Island. There is no single authority representing both Turkish and Greek Cypriot people on the Island. Turkey recognises the Turkish Republic of Northern Cyprus (TRNC). Until a lasting and equitable solution is found within the context of the United Nations, Turkey shall preserve its position concerning the Cyprus issue. Footnote by all the European Union Member States of the OECD and the European Union: The Republic of Cyprus is recognised by all members of the United Nations with the exception of Turkey. The information in this document relates to the area under the effective control of the Government of the Republic of Cyprus.

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Jurisdiction 26 France 27 FYROM39 28 Georgia

Type of EoI arrangement DTC Protocol EU Directive 2011/16/EU DTC DTC Protocol DTC Protocol EU Directive 2011/16/EU TIEA DTC EU Directive 2011/16/EU DTC Protocol DTC EU Directive 2011/16/EU DTC DTC DTC DTC Protocol EU Directive 2011/16/EU DTC DTC EU Directive 2011/16/EU DTC TIEA

Date signed 26 Mar 1993 23May 2011 15 Feb 2011 10 Sep 2007 11 Apr 2005 4June 2012 24 Aug 2000 29 Dec 2010 15 Feb 2011 17 Sep 2009 18 Jul 2007 15 Feb 2011 25May 2010 25June 2012 25 Feb 1975 15 Feb 2011 8 Nov 1999 24 Jul 1986 11 Mar 2002 24May 1966 16 Dec 2009 15 Feb 2011 29 Jan 1970 29 Jun 1981 15 Feb 2011 20 Dec 1961 7 Sept 2012

Date in force 1 Sep 1994 Pending 1 Jan 2013 20 Jan 2008 1 Mar 2006 Pending 18 Aug 2002 1 Mar 2012 1 Jan 2013 1May 2010 1 Apr 2009 1 Jan 2013 1 Jan 2011 Pending 9 Feb 1976 1 Jan 2013 5 Sep 2001 1 Oct 1988 11 Jul 2004 5 Jan 1968 01May 2011 1 Jan 2013 26 Jan 1971 6 Apr 1985 1 Jan 2013 4 Apr 1963 1June 2013

29 Germany 30 Gibraltar 31 Greece

32 Hong Kong, China 33 Hungary 34 India 35 Indonesia 36 Iran 37 Ireland

38 Israel 39 Italy 40 Japan 41 Jersey

39.

Former Yugoslav Republic of Macedonia.

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Type of EoI arrangement DTC DTC DTC DTC 45 Latvia 46 Libya 47 Liechtenstein EU Directive 2011/16/EU DTC DTC Protocol DTC 48 Lithuania EU Directive 2011/16/EU DTC 49 Luxembourg 50 Malaysia 51 52 Malta Mexico Protocol EU Directive 2011/16/EU DTC DTC EU Directive 2011/16/EU DTC Protocol DTC TIEA DTC DTC DTC DTC 58 Netherlands 59 New Zealand 60 Norway Protocol EU Directive 2011/16/EU DTC DTC Protocol

Jurisdiction 42 Kazakhstan 43 Kyrgyzstan 44 Kuwait

Date signed 10 Sep 2004 18 Sep 2001 13 Jun 2002 14 Dec 2005 15 Feb 2011 16 Sep 2010 5 Nov 1969 29 Jan 2013 6 Apr 2005 15 Feb 2011 18 Dec 1962 07 Jul 2009 15 Feb 2011 20 Sep 1989 29May 1978 15 Feb 2011 13 Apr 2004 18 Sep 2009 29 Apr 2004 15 Sep 2009 3 Jul 2003 27 Feb 2002 15 Dec 2000 1 Sep 1970 9 Aug 2009 15 Feb 2011 21 Sep 2006 28 Nov 1995 16 Sep 2009

Date in force 1 Mar 2006 1May 2003 1 Mar 2004 16May 2007 1 Jan 2013 Pending 7 Dec 1970 Pending 17 Nov 2005 1 Jan 2013 7 Feb 1964 1 Sep 2010 1 Jan 2013 1 Dec 1990 13July 1979 1 Jan 2013 1 Jan 2005 01 Jul 2010 1 Jan 2005 1 Aug 2010 1 Oct 2004 12 Nov 2006 1 Jan 2002 21 Apr 1971 01 Jul 2010 1 Jan 2013 1 Dec 2007 1 Dec 1996 1June 2013

53 Moldova 54 Monaco 55 Mongolia 56 Morocco 57 Nepal

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ANNEXES 119

Jurisdiction 61 Qatar 62 Pakistan 63 Philippines 64 Poland

Type of EoI arrangement DTC DTC DTC DTC EU Directive 2011/16/EU DTC EU Directive 2011/16/EU DTC Protocol EU Directive 2011/16/EU DTC TIEA DTC Protocol DTC DTC DTC Protocol DTC EU Directive 2011/16/EU DTC Protocol EU Directive 2011/16/EU DTC Protocol DTC

Date signed 30 Dec 2010 4 Aug 2005 9 Apr 1981 13 Jan 2004 15 Feb 2011 29 Dec 1970 15 Feb 2011 30 Mar 2005 1 Oct 2012 15 Feb 2011 13 Apr 2000 14 Sep 2009 24 Nov 2004 18 Sep 2009 19 Mar 2006 7May 2010 30 Nov 2001 15 sep 2009 7 Mar 1978 15 Feb 2011 1 Oct 1997 28 Sep 2011 15 Feb 2011 4 Mar 1996 22 Aug 2011 8 Oct 1985

Date in force 7March 2012 1 Jun 2007 1 Apr 1982 1 Apr 2005 1 Jan 2013 27 Feb 1972 1 Jan 2013 1 Feb 2006 Pending 1 Jan 2013 30 Dec 2002 1 Jan 2012 1 Dec 2005 1 Jun 2010 1 Jun 2007 17 Dec 2010 22 Oct 2002 1 Jun 2010 12 Feb 1979 1 Jan 2013 1 Feb 1999 Pending 1 Jan 2013 6 Feb 1997 1 Mar 2012 1 Dec 1987

65 Portugal

66 Romania 67 Russia

St Vincent and the 68 Grenadines 69 San Marino 70 71 72 73 Saudi Arabia Serbia Singapore Slovakia

74

Slovenia

75 76

South Africa South Korea

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120 ANNEXES
Type of EoI arrangement DTC 77 Spain EU Directive 2011/16/EU DTC 78 Sweden Protocol EU Directive 2011/16/EU DTC 79 Switzerland Protocol Protocol 80 Syria 81 Tajikistan DTC DTC DTC DTC DTC DTC DTC DTC DTC DTC 88 United Kingdom 89 USA 90 Uzbekistan 91 Venezuela 92 Vietnam Protocol EU Directive 2011/16/EU DTC DTC DTC DTC

Jurisdiction

Date signed 20 Dec 1966 15 Feb 2011 14May 1959 17 Dec 2009 15 Feb 2011 30 Jan 1974 3 Sep 2009 10May 2012 3 Mar 2009 10 Apr 1981 7June 2011 8May 1985 23 Jun 1977 28 Mar 2008 10 Apr 1981 16 Oct 1997 22 Sep 2003 30 Apr 1969 11 Sep 2009 15 Feb 2011 31May 1996 14 Jun 2000 12May 2006 2 Jun 2008

Date in force 1 Jan 1968 1 Jan 2013 29 Dec 1959 10 Jun 2010 1 Jan 2013 4 Dec 1974 1 Mar 2011 14 Nov 2012 pending 1 Oct 1982 1July 2012 1 Jul 1986 4 Sep 1978 1 Oct 2009 1 Oct 1982 20May 1999 1 Sep 2004 13 Nov 1970 19 Nov 2010 1 Jan 2013 1 Feb 1998 1 Aug 2001 17 Mar 2007 1 Jan 2010

82 Thailand 83 Tunisia 84 Turkey 85 Turkmenistan 86 Ukraine 87 United Arab Emirates

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ANNEXES 121

Annex3:List of All Laws, Regulations and Other Material Received


Federal Constitution Act Corporate Laws
Commercial register Act Entrepreneurial Code Stock Corporation Act Limited liability Companies Act Co-operative Act. Federal public foundations and founds Act Private foundations Act European Economic Interest Grouping Act

Regulatory Laws
Federal Banking Act Financial Market Authority Act Stock Exchange Act Insurance Supervision Act Federal Act regarding the Supervision of Investment Services

Taxation Laws
Fiscal Code Income tax Act Value added tax Act

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122 ANNEXES
Fiscal Administration Organisation Act Fiscal Offences Act Non-Contentious Proceedings Act

Information Exchange for Tax Purposes Laws


Administrative Assistance Implementation Act with explanatory remarks DTCs and TIEAs signed by Austria since March 2009

Other Laws
Civil law notaries Code Accountancy Act Solicitor-Advocates Code Chartered Accountant Professionals Act Disciplinary Statute for Solicitor-Advocates and Trainee Solicitor-Advocates Criminal Code Criminal procedure Code Act of 3May 1868 governing procedures for the giving of oaths in court

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ANNEXES 123

Annex4:People Interviewed During On-site Visit


1. R epresentatives of the Austrian Ministry of Finance and the Austrian Competent Authority (CLO) and the Austrian Tax authorities. 2. Representatives of the Austrian Ministry of Justice. 3. Representatives of the Austrian Foundation Supervisory Authorities. 4. R epresentatives of the Austrian Chamber of Notaries, Chamber of Accountants and tax consultants and Chamber of Chartered Accountants (in connection with AML supervisory functions and other registration duties). 5. R epresentatives of the Austrian Financial Management Authority (for AML supervision of banks and financial institutions) and the Austrian Financial Intelligence Unit. 6. Representatives of the Vienna District Courts (registration authorities for different commercial entities) 7. Representatives of the local tax office.

PEER REVIEW REPORT PHASE 2 AUSTRIA OECD 2013