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Austria: Court addresses abusive assignment of receivables

Austria: Abusive assignment of receivables

The Austrian Federal Finance Court held that an assignment of receivables by a taxpayer to a company located in Malta, with which the taxpayer frequently engaged in trade and transactions, was an abusive arrangement.


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The facts in this case are as follows:

  • An Austrian limited liability company (GmbH) had liabilities (€1 million) against an Austrian bank.
  • The bank proposed to waive the receivables against a small payment (€35,000). The waiver would increase the taxable income of the GmbH.
  • A director of the GmbH suggested to assign the receivables to a Maltese corporation, which the GmbH was frequently trading with (the GmbH-director was also a director of the Maltese corporation).
  • The Austrian tax authorities qualified the arrangement as abusive, finding it was unusual and inadequate.

The Austrian Federal Finance Court agreed with the position of the tax authorities, finding that the arrangement led to various downsides for the GmbH (the liability still existed and the Maltese corporation, as the new creditor, charged interest). It was further noted that it was not believable that the GmbH or the directors were not able to raise the comparatively small amount in order to get rid of the receivable and to improve the companies’ economic situation. Thus, the court determined that assignment of the receivable must be denied under the general anti-avoidance rule in Article 22 of the general federal fiscal code (the provision that provides a write-off of receivables must be assumed, resulting in greater taxable income on the GmbH-level).

Note that with the 2018 tax reform (Jahressteuergesetz 2018), the definition of abuse in Article 22 was revised to reflect the EU Anti-Tax Avoidance Directive (ATAD).

Read a December 2019 report prepared by the KPMG member firm in Austria


Other developments briefly discussed in this report include the following:

  • Austrian Federal Fiscal Court: Daily aliquoting of input tax adjustment is appropriate
  • CJEU: Knowing or should have known in connection with an involvement in a VAT fraud
  • CJEU: The denial of input VAT deduction due to an (abusive?) supply chain
  • Amendment of the Regulation concerning the value of benefits in kind (Sachbezugswerteverordnung) regarding the private use of company cars
  • Austrian Supreme Administrative Court on disclosure of facts to avoid fiscal criminal consequences
  • “Last minute” surcharge for voluntary self-disclosures: Austrian Federal Finance Court on the announcement of a tax audit by phone and payment despite a request for suspension of payment
  • Austrian Constitutional Supreme Court on the right of inspection of files: secret means of evidence exceptionally permitted, but mandatory judicial control
  • Austrian Administrative Supreme Court on income tax from the exchange of real property in relation to Austrian partnerships
  • Austrian Administrative Supreme Court on reduced tax base for cadaster registry fee
  • CJEU confirms retroactive applicability of Commission Regulation (EU) No 651/2014 - restriction of energy tax refund to production companies probably in conformity with EU law

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