The Tyrolean Signa maker Rene Benko remains an issue in domestic politics between various investigative committees – not only between the opposition and the government, but also between the coalition parties. The Greens want to maintain their critical role from the U-committees and are submitting a parliamentary question to Finance Minister Magnus Brunner (ÖVP) regarding Benko’s “tax optimization strategy”. The Neos also have a parliamentary question for Brunner.
The reason is supposedly non-payment of sales tax and the registration of a lien for a Benko villa near Innsbruck. It is suspected that Benko uses the villa privately and therefore not in accordance with the intended use – it is still his main residence and the headquarters of his wife Nathalie’s companies. The tenant is the insolvent Signa Holding.
The Greens are calling for Brunner to initiate an investigation. The Innsbruck tax office “apparently initially accepted tax trickery,” says the green question. In their request, the Neos point out that sales tax is usually only considered a pass-through item for companies. If companies pay sales tax when purchasing goods, they can have these amounts reimbursed through so-called input tax.
Innsbruck’s mayor defends himself
It is assumed that there was private use, which was not shown, while Signa Holding or companies attributable to it were tenants. Here the two parties may see unlawful reimbursements. The Green Mayor of Innsbruck, Georg Willi, only denied this on Wednesday: it was a legally compliant dedication and use.
Benko bought the former castle hotel in 2016 for 11.1 million euros, later demolished it and, with a total investment of around 60 million euros, built a “Palazzo Protzo” in Innsbruck-Igls, as the Greens call the former castle hotel. The total investment is shown by the sales tax debts recorded by the finance department in the land register.
12 million euros in sales tax liability
The lien notice shows that this sales tax liability should amount to a good 12 million euros. The Greens assume that a company was founded that claimed input tax – but it is questionable whether the state can ever collect the same amount of sales tax. When it comes to the “Palazzo Protzo,” the party believes: “At the end of the day, there is one main beneficiary: Rene Benko herself.” This was denied by the company.
The small government party wants to know from the finance minister of the large government party via 14 questions with sub-questions whether the sales tax liability of around 12 million euros is input tax that has already been paid out. This question will, among other things, be examined in more detail on which forecast calculation the input tax was paid out and how high the rent was set in order to avoid a so-called hobby.
In principle, it is also questioned when and how often operational and tax audits were carried out and which departments of the tax office and the Ministry of Finance were involved. The small coalition partner also wants to know when Brunner knew that the “tax liability of a single privately used villa of 12 million euros” existed.
“Has indolence become the norm?”
“The present case reveals the urgency of examining the hesitant actions of the financial sector more closely,” said Green U-Committee politician Nina Tomaselli. “It is incomprehensible to us why the Innsbruck tax office apparently initially accepted the tax trickery.”
Both Neos and the Greens say that the length of the process and the late security of the lien on December 13th are incomprehensible. The Pinks basically ask: “Has people looked the other way or has indolence become the norm?” Question 1 of the inquiry is: “Does the Finance Minister know how high the Republic’s claims are once morest all insolvent Signa companies?”. Furthermore, it is asked how great the damage was to the Republic in the Signa case or whether the Ministry of Finance can rule out that the minister’s office has influenced the decision-making of the responsible tax office since the beginning of the Villa proceedings.
Immediate investigation required
“The finance minister would be well advised to initiate an investigation immediately,” demands Tomaselli. Because honest taxpayers should be able to rely on the fact that there is no special treatment for the super-rich and that everyone is equal before the tax law.
The property was financed by Benko with hidden distributions instead of taxed income, explained the Tyrolean National Council member and Innsbruck local councilor Julia Seidl. This saved the investor up to 60 million euros. Secondly, he saved himself the sales tax of 12 million euros to be paid and thirdly, the Schlosshotel Igls GmbH, which is owned by Benko’s private foundation, is still debiting the villa at 1.5 percent, i.e. around 900,000 euros annually. Seidl therefore estimates the total damage to taxpayers to be significantly higher than 12 million euros.
Treatment with kid gloves?
When looking through the lien notice, December 13, 2023 stands out, says Tomaselli. “It is incomprehensible why the disputed tax debt amounting to millions was only registered by the tax authorities at this late date,” said the Green politician. “Also why Signa’s dubious tax savings model was ever accepted and payments were made by the financial authorities, as described by the Signa spokesman. Was an alleged billionaire treated with kid gloves by the tax authorities?”
The ÖVP Corruption Committee has proven “that there was a feel-good program for Rene Benko in the Ministry of Finance in tax matters – in which not only Thomas Schmid was involved. A treatment that normal taxpayers can only dream of,” complain the Greens. “If Benko had financed this villa privately, he would have had to use taxed income for it,” believes Neos politician Seidl. “Since he organized the whole thing through a dubious corporate structure, it is now clear that this was a hidden distribution to Benko.”
This is what tax expert Jürgen Sykora says
Jürgen Sykora, chairman of the professional group of tax consultants, reminded the Ö1 “Morgenjournal” that there is a fundamental right of every company to an input tax deduction. He did not want to assess whether the Benko villa was a dubious construct, citing facts that were not sufficiently known. Ultimately, it will probably be a court’s turn in the next instance. In any case, the legislature has no need to take action in sales tax law. It’s very complex, but “the rule of law works,” said Sykora.
In the case of a rental between the company and the partner, an input tax deduction is possible and is not unusual. Why this was granted “you have to look closely at, I can imagine that the tax authorities took the necessary checks.” Sykora suspects that input taxes were claimed in the construction phase following the demolition. There are few inspection options during construction, but there are sufficient inspection options followingwards. If Benko was a tenant in the villa – it was the main residence of the alleged Signa mastermind – the question was whether the return was at arm’s length or not.
