COVID: Draft bill for rescue package for gastronomy in Austrian parliament

On May 13th, 2020 a draft bill was issued in the Austrian Parliament to implement a rescue package for the Austrian gastronomy. It consists of tax reliefs for restaurants, as well as tax incentives for consumption in restaurants.

Markus Vaishor / Florian Popl

COVID-19: Overview of Austrian tax measures

Since the outbreak of the corona crisis, numerous tax and non-tax measures have been taken by the Austrian government to support the economy. The article provides an overview of the measures currently applicable.

Ferdinand Kleemann / Markus Vaishor / Florian Popl

COVID-19-Legislation in HR law

The COVID-19-crisis provided also for numerous new legislative provisions in HR law and, inter alia, brought about, the new “Corona-short time work”, paid leave of absence for care (special care period), protection provisions for Covid19-risk groups and accident insurance in the Corona-induced home office in the field of social security law, as well, as tax-free Corona-bonuses in the field of wage tax law.

Katharina Daxkobler

Customs amendments related to SARS-COV-2-VIRUS - Customs procedure 4200

"Extraordinary situations call for extraordinary measures". With this slogan the Austrian Federal Economic Chamber refers to the "Information on the procedure of customs offices regarding customs law in connection with the coronavirus/COVID-19 (SARS-COV-2-VIRUS)" by the Federal Ministry of Finance. The document, which has already been adapted several times, is now available dated 28 April 2020. In this Newsletter, we show the essential facilitations related to the "Customs procedure 4200: Tax exemption for import with immediate intra-Community delivery to another EU country" due to the current Covid19 situation.

Esther Freitag / Alfred Mühlberger

Reduction of the VAT rate to 0% for the supply of protective masks in Austria in connection with the SARS-COV-2-VIRUS

According to a motion submitted in the Austrian parliament on 22 April 2020, a reduced VAT rate of 0% is provided for under the 6th COVID-19 Act for the supply and intra-Community acquisitions of protective masks exported or occurring after 13 April 2020 and before 1 August 2020.

Esther Freitag / Alfred Mühlberger

Amendments on imports of goods from third countries in connection with SARS-COV-2-VIRUS

"Extraordinary situations call for extraordinary measures". With this slogan the Austrian Federal Economic Chamber refers to the "Information on the procedure of customs offices regarding customs law in connection with the coronavirus/COVID-19 (SARS-COV-2-VIRUS)" of the Federal Ministry of Finance. The document, which has already been adapted several times, is now available dated 28 April 2020. In the following, we will show the main reliefs with regard to the "exemption from import duties for the benefit of disaster victims" and due to an amendment of the VAT Act to introduce a "reduced VAT rate of 0% on protective masks" based on the current situation.

Esther Freitag / Alfred Mühlberger

CJEU: Criteria for assigning the moved supply in a chain transaction

In its ruling of 23 April 2020 in the Herst case (C-401/18), the CJEU - contrary to the opinion of GA Kokott - continues to maintain that a comprehensive assessment of all the special circumstances of the individual case must be carried out in order to classify the moveable supply within a chain transaction.

Esther Freitag / Christina Pollak

Contesting of an announcement of a tax audit via Art 299 Austrian Federal General Fiscal Act: Not a miracle weapon at all?

A recent decision of the Austrian Administrative Supreme Court caused sensation: unlawful announcements of tax audits can be challenged via Art 299 Austrian Federal General Fiscal Act (“BAO”). However, the decisions of the Austrian Federal Finance Court following the decision of the Austrian Administrative Supreme Court did not lead to annulments of announcements of tax audits. Especially, the limitation of Art 299 BAO to the unlawfulness of content of the announcements of tax audits prevented the annulment of the announcements.
The remaining scope of Art 299 BAO seems to be announcements concerning repeated tax audits and tax audits, although the taxpayer takes part in a horizontal monitoring regime by the Austrian tax authorities. Nevertheless, an application of Art 299 BAO does not have a suspensive effect and does not prevent the use of evidence obtained in a tax audit based on an unlawful announcement.

Stefan Papst / Wolfgang Gurtner

Austrian Federal Finance Court: unjustified revision proceedings due to ineffective reference to a tax audit report

The reasons for revision proceedings due to newly emerged facts (§ 303 Austrian Federal General Fiscal Act) can be given through reference to a tax audit report. In case the report only contains calculations, but no explanations concerning the emerging of facts or evidence for the first time, the Austrian Federal Finance Court has to annul the decision of the tax authority. The Austrian Federal Finance Court is neither authorised nor under an obligation to examine, whether revision proceedings are allowed due to other reasons. The Austrian tax authorities filed an appeal to the Austrian Administrative Supreme Court against this decision by the Austrian Federal Finance Court.

Stefan Papst / Wolfgang Gurtner

Austrian Administrative Supreme Court on unlimited tax liability in Austria: insignificant actual use of the dwelling does not rule out existence of a domicile

The case law of the Austrian Federal Finance Court requires an actual use for a minimum of two to three months a year to establish a domicile in Austria and refers to the former case law of the Austrian Administrative Supreme Court. Moreover, the Austrian tax authorities also take the annual length of stay into consideration for the decision, whether a domicile is established in Austria or not.
According to the latest decision of the Austrian Administrative Supreme Court an insignificant number of days of actual use of the dwelling does not rule out the existence of a domicile. As a consequence, in practice the other criteria for establishing a domicile become more important: power of disposal of the dwelling, suitability of the dwelling for living.

Stefan Papst / Wolfgang Gurtner

Austrian Federal Finance Court: Refund for dividend withholding tax not creditable in the residence state is also possible for third country recipients.

According to Art 21 sec 1 subsec 1a Austrian Corporate Income Tax Act, withholding tax on dividends may be refunded for corporate recipients provided that the withholding tax cannot be credited based on the provisions of the respective double taxation treaty in the residence state (e.g. due to a negative taxable result or because the corporate recipient is exempt from corporate taxation). In principle, this provision only applies to corporate recipients within the EU/EEA. However, the Austrian Federal Finance Court recently ruled in a case concerning a tax-exempted Canadian Crown Corporation that the provision may also apply to corporate recipients from third states since the restriction to EU/EEA-countries contradicts EU-law (freedom of movement of capital). However, it should be noted that the Austrian tax authorities filed an appeal to the Austrian Administrative Supreme Court.

Markus Vaishor / Florian Popl

Austrian Federal Finance Court on the timing of profit recognition in connection with construction cost subsidies

In a recent decision, the Austrian Federal Finance Court ruled that construction cost subsidies rendered within the scope of continuous obligations (tenancies) that are economically comparable to rental prepayments can be recognized on a straight-line-basis over the duration of the tenancy or the probable useful life of the assets which was financed with the subsidy.

Markus Vaishor / Armin Lunzer

Stamp duty for rental contracts for business purposes: Austrian Administrative Supreme Court confirms strict view on limited length of contracts

According to the Austrian Stamp Duty Act, written contracts regarding the rental of real estate are subject to a 1 % duty whereby the tax base depends on the fees, the length and conditions of the contract. Despite the stamp duty was abolished for the rental of properties for residential purposes in 2017, rental for other purposes (e.g. office, logistics etc), however, is still subject to stamp duty. In the case of a limited contract period, the tax base is the agreed payments the tenant has to pay over the whole contract period (however, in this case the tax base is limited to the 18-fold of the agreed yearly payments. For contracts with an unlimited period, the tax base has to be calculated as the recurring payments per year times 3.

For determining the length of the contract in terms of the Austrian Stamp Duty Act the agreed conditions are relevant, not the legal title as a limited or unlimited rental contract. Art 30 Sec 2 Austrian Tenancy Law Act determines special events of default entitling the lessor to withdraw from the rental contract. This special condition is often agreed between the contracting parties.

The Austrian Administrative Supreme Court confirmed the stricter view established earlier by the Austrian Federal Finance Court regarding the length of contracts being limited if special conditions of Art 30 Sec 2 Austrian Tenancy Law Act are agreed on. A weighting and an improbability of the implementation of the contractually agreed reasons for termination according Art 30 sec 2 Austrian Tenancy Law Act can lead to the conclusion that a contract is limited. Consequently, in such cases the tax base is not the 3-fold but up to the 18-fold of the yearly payments depending on the contractual length.

Markus Vaishor / Florian Popl

Capital gains from the sale of real property derived by individuals: Austrian Federal Finance Court restricts exemption for owner-occupied houses and apartments in cases of the seller´s principal place of residence

Capital gains from the sale of real property derived by individuals as from April 1, 2012 are subject to tax with a flat tax rate of 25 % (April 1, 2012 – December 31, 2015) or 30 % (January 1, 2016 – present). These capital gains are exempt, if the property has been the seller’s principal home either two years prior to the sale or for at least five years during the last 10 years.

The Austrian tax authorities limited the tax exemption for the land connected to the house to 1.000 m2. The Austrian Administrative Supreme Court came to the conclusion that the exemption for the house-connected-land is limited to the size, which is commonly used as building ground. The court overruled the respective decision of the Federal Finance Court, which decided that the 1.000 m2 restriction is against the wording of the law.

Due to the decision of the Administrative Supreme Court the Federal Finance Court and the Austrian Tax authorities respectively had to annul the respective assessment. The latter limited again the tax exemption for the land connected to the house to 1.000 m2. The taxpayer filed an appeal to the Austrian Federal Finance Court which decided that the application of the 1.000 m2-limit is adequate.

Markus Vaishor / Katrin Postlmayr

Austrian Administrative Supreme Court on RETT-repayment

According to Art 17 sec 1 Austrian Real Estate Transfer Tax Act, real estate transfer tax paid on a transaction may be refunded if the original transaction is terminated (i.e. reversed) within three years due to an agreement of the respective parties or due to a termination right. However, the Austrian Administrative Supreme Court recently confirmed that the seller needs to receive unrestricted disposition rights regarding the property. If the transaction is only terminated in order to enable a sale to a (pre-determined) other buyer, this requirement is not fulfilled.

Markus Vaishor / Armin Lunzer

Austrian Federal Finance Court on “last-minute”-surcharge for voluntary self-disclosures of incorrect monthly VAT-payments

The imposition of a “last-minute”-surcharge for voluntary self-disclosures (Art 29 sec 6 Austrian Fiscal Criminal Act) requires a grossly negligent or intentional tax offense. The tax authorities have to examine, whether such an offense was committed or not. If a tax offense can only be committed intentionally (e.g. Art 49 sec 1 subsec a Austrian Fiscal Criminal Act), a “last-minute”-surcharge cannot be imposed in case of gross negligence simply due to the lack of a criminal behavior. It can be assumed that a managing director knows about the obligation to hand in periodic VAT-returns and the due date of the monthly VAT-payments, especially if the director already submitted voluntary self-disclosures concerning VAT-returns in the past.

Stefan Papst / Wolfgang Gurtner