Austria: Indefinite use of loss carryforwards | KPMG | GLOBAL
Share with your friends

Austria: Tax rules for indefinite use of loss carryforwards upheld

Austria: Indefinite use of loss carryforwards

Austria’s Administrative Supreme Court issued a decision that addresses the ability to use loss carryforwards when there is a change of indirect shareholder(s).


Related content

Loss trafficking rule

As a general rule, taxpayers can use loss carryforwards indefinitely. However, if the identity of the taxpayer changes after a significant change of the organizational, economic, and shareholder structure, the loss carryforward claims are disallowed. All three conditions must be satisfied for disallowance of the loss carryforwards. A 75% change in the shareholder structure is deemed significant (unless the change resulted from an inheritance or gift transfer).

The court found that there was a significant change of the shareholder structure, and thus, the tax loss carryforward ceased to exist (because the other two criteria were also met). According to the court, there was no “look-through” approach for purposes of the Austrian loss trafficking rules.

Accordingly, transactions within a group of companies, if the direct shareholding changes significantly, can cause the tax loss carryforwards to no longer be available for use. However, if an entire group is acquired by a new shareholder, there would appear to be no adverse consequences to the ability to use the loss carryforwards of any indirect Austrian subsidiaries.


Read a November 2017 report [PDF 187 KB] prepared by the KPMG member firm in Austria

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us


Request for proposal