Local tax criminal case – three local bosses, a hotel village and serious accusations

It is a complicated case that will be heard before the regional court next Thursday. All mayors of the municipality of Maria Alm who have been in office since 2013 are in the dock. This includes a local interim leader who was community leader for only a month in early 2019. Together with the (former) civil servants, the now retired chief of staff and a tax advisor will also have to answer for themselves.

The accusations made by the Public Prosecution Service for Economic Affairs and Corruption are abuse of office, bribery and serious fraud. The defendants deny. In the ‘Krone’ interview, their lawyer expressed his fears for the future of municipal politics: ‘Who else would want to become mayor?’

A fixed rate was agreed and fictitious overnight stays were prescribed
In short: It concerns alleged corruption with the local tax in connection with the ominous second residence hotel village Club Hinterthal. But it is not the officials who have benefited, but the community itself. According to the 19-page indictment, community leadership allegedly struck a deal with those responsible for the hotel village in 2013. In detail, it concerned the regulation of the general tourist tax, which is payable for overnight stays in traditional accommodation such as hotels. The amount of the local tax largely benefits the tourist association, but also the community.

However, special local tax is due for holiday homes: this is largely borne by the municipality. Other tax rules also apply. According to the corruption hunters, both Clubhotel Hinterthal GmbH and the municipality were interested in continuing to levy only general local taxes. In addition, the community was “dissatisfied with the reported number of overnight stays,” according to the complaint. Therefore, an agreement was reached in December 2013: the hotel village agreed to pay the local tax for a flat rate of 13,000 overnight stays per year. Until 2020, the tourist tax was 1.50 euros per night.

The defense attorney denies the allegations
Until June 2020, the hotel village paid local taxes for reported overnight stays and for additional overnight stays for which no guest registration took place. This remained the case until the municipality received a supervisory complaint from the government. This also made it clear that the community reported too many overnight stays to the Central Bureau of Statistics: according to the complaint, exactly 50,231 overnight stays. This subsequently led to a distortion of the distributed contributions.

According to the corruption hunters, the municipal leadership had to “establish the factual and legal circumstances essential to the obligation to pay taxes and collect taxes,” the indictment says. The WkStA states that the country has therefore been deprived of its right to proper taxation.

Well-known Salzburg lawyer Kurt Jelinek defends the three accused (former) local politicians and the retired head of the office: “The flat-rate number of overnight stays of 13,000 corresponded to an average, usual occupancy rate in the area.” This agreement was concluded in the presence of a tax advisor and a lawyer. “Community leaders therefore had no reason to doubt its legality.”

According to Jelinek, “no damage” was probably done. And the community had to do this because otherwise there would have been less revenue due to missing guest registration sheets. “If the community had done nothing, criminal liability for negligence would have been possible under certain circumstances,” the lawyer points out, adding: “If we immediately criminalize local politicians, we will soon be unable to find any.”