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Reporting item 32 – Number of special VAT audits dropped dramatically

Nov 13, 2018

Executive summary

The number of special VAT inspections has declined for years. The Federal Finance Ministry did not enough to implement our relevant recommendations reported in 2006 and to respond to demands made by the Public Accounts Committee in 2007. As a result, the number of special VAT audits has continued to decline further in subsequent years. In 2017, the national average rate was 1.4 per cent compared to 2 per cent in 2005. This means that, on average, a business will be subject to VAT audit only once every 71 years. This cannot ensure an equal implementation of applicable legislation that meets the needs of fighting fraud. In its oversight function, the Federal Finance Ministry should ensure an adequate number of VAT audits and prescribe a minimum rate for the federal states.

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