Financial equalization (Austria)

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The financial compensation in Austria regulates the distribution of financial resources of the state (particularly from taxes and charges ) to the individual governments (federal, state, municipalities ). This financial policy instrument tries to create a coordinated financial management between the regional authorities, the intermediary financial authorities and public companies or company holdings. For this purpose, on the one hand, the tasks and the resulting expenses (= passive financial compensation) and the income (= active financial compensation) are distributed.

Basics

The Financial Constitution Act (F-VG), anchored in Article 13 of the Federal Constitutional Act (B-VG), regulates the sphere of activity of the Federation and the Länder in the field of finance according to Section 1. The F-VG leaves the distribution of the taxation rights to the simple federal legislature , whereby in truth the Finanzausgleichsgesetz carries out the distribution of competences in the field of taxation and not the Financial Constitutional Act, as promised in Article 13 B-VG, which actually only provides the framework for distribution. This framework includes the types of charges that are regulated in § 6 (1) with all their main and subsidiary forms, as well as the burden-sharing and cost-bearing principle.

A special feature of the FAG is on the one hand the time limit , which was set at 4 years in the FAG 1989, Federal Law Gazette No. 687/1988, on the other hand, that it is not negotiated by the federal government but by the financial equalization partners . If no new financial equalization is regulated at the time of the expiry of the respective Financial Equalization Act, certain transitional rules apply (cf. Section 28 FAG 2001, Section 26 Paragraph 3 FAG 2005).

Negotiating partners / financial equalization partners

  1. Confederation: Federal Ministry of Finance
  2. Federal states: state governors or their state finance officers
  3. Austrian Association of Cities
  4. Austrian Association of Municipalities

Principles: burden-sharing and cost-bearing principle

The cost-bearing principle according to § 2 F-VG 1948 states that the federal government and the other regional authorities bear the costs resulting from performing their tasks, unless the relevant legislation provides otherwise. The load balancing principle , regulated in § 4 F-VG 1948, provides that the burden of the public administration must be distributed in such a way that the limits of performance are not exceeded.

Passive financial equalization

All tasks not assigned to the federal government in accordance with Article 10 (1) point 1-18 B-VG are Art. 15 (1) B-VG assigned to the sphere of activity of the federal states. In addition, certain minimum tasks for the municipalities are regulated (e.g. road networks , water supply , zoning ...)

Passing on costs: Passing on costs is understood to be the shifting of expenses that does not require the approval of the new cost bearer . In general, according to the cost-bearing principle, the regional authority would have to bear the costs that fall within its area. According to § 2 F-VG 1948, however, it is possible for the federal legislature to transfer costs to states and municipalities that are to be located in the federal area. In order not to allow unlimited costs to be passed on, Section 4 F-VG regulates limits. Passing on costs from the states to the federal government is not possible. State legislation, in turn, can pass costs on to the municipalities.

Active financial equalization

The active financial equalization regulates the distribution on the income side , whereby the network system in particular dominates in shaping the income structure in Austria. The tax sovereignty is concentrated at the federal level and the other regional authorities have a right to a share of the tax revenue.

Vertical financial equalization

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The vertical financial equalization primarily serves to divide the revenue components of the communal federal taxes between the federal government, all of the states and all of the municipalities.

Transfer payments:

These allocations regulated in the F-VG 1948 Article III (Sections 12 and 13) and in the FAG 2001 Article III (Sections 20 - 25) above all authorize the federal government to grant additional grants to states and municipalities.

Horizontal financial equalization

The horizontal financial equalization regulates the distribution of financial resources between the individual, equal regional authorities.

  • Revenue principle: The tax revenue goes to the country whose tax authority it has taken.
  • Requirement principle: The different volume requirements are also taken into account appropriately.

Population (= resident population ) Essentially, the breakdowns are carried out according to the (unrefined) population (§ 10 (9) FAG 2001, § 9 (9) FAG 2005) at the state level and according to the graduated population key (also known as the refined population ) at the community level .

This refined population is formed by multiplying the population according to the census by a factor. This is (as of 2005):

  • for municipalities up to 10,000 inhabitants: 1 1/3
  • for communities with up to 20,000 inhabitants: 1 2/3
  • for municipalities with up to 50,000 inhabitants: 2
(also for the statutory cities of Rust , Eisenstadt and Waidhofen an der Ybbs )
  • for communities with more than 50,000 inhabitants: 2 1/3

In addition, there are loop-in regulations for municipalities, which only just miss a higher classification. This calculation takes into account that larger communities also have to perform supra-regional tasks, which then also benefit the smaller communities in the neighborhood.

Apart from the tobacco tax and the electricity and natural gas tax , all important federal taxes are shared between the federal, state and local governments.

literature

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