English Summary 11-12/2022

Tax News 11-12/2022

Tax News 11-12/2022


Implementation of EU Public Country by Country Reporting 

On December 21 the EU-directive regarding the implementation of the public country by country reporting went into force. The EU member states need to implement the directive into domestic law until June 22, 2023.

W. Rosar/ G. Gottholmseder

Further increase of base interest rate by 0.75 %

The base interest rate, which was just recently increased to 0.63 % on September 14, 2022, was increased again to 1.38 % on November 2, 2022, resulting in a corresponding increase in various interest rates regulated in the General Federal Fiscal Code (such as late payment interest) that depend on the level of the base interest rate.

F. Kleemann /  F. Popl / B. Stangar

Catch-up of depreciation on participations in foreign tax group members in the case of final losses

In the case of liquidation of foreign tax group members, previously tax-neutral depreciation of the participation can be deducted up to the amount of the previously attributed tax losses that have to be clawed back (i.e. taxed). However, depreciation in excess of this amount cannot be utilized, which is different from the tax treatment of final asset losses in the case of international participation holdings, where such losses can be utilized. According to a recent decision of the Austrian Federal Finance Court this does not represent an unintended loophole in the law, but rather corresponds to the intention of the legislator.

M. Vaishor / A. Lunzer

Issuance of vouchers to employees no own-use taxation!

On November 17, 2022, the CJEU judgment on the GE Aircraft Engine Services (C-607/20) case was published. In this case, the CJEU dealt with the question of whether the issuing of vouchers to employees results in own-use taxation. The CJEU concludes that if the advantage resulting for the employees is of minor importance compared to the advantage the company receives due to the issuance of the vouchers, the vouchers do not lead to own-use taxation.

E. Freitag / C. Pollak

The rules for the place of supply of services remain unaffected even in case of participation in VAT fraud

In an Austrian reference for a preliminary ruling, the CJEU ruled (on 27 October 2022, C-641/21, Climate Corporation Emissions Trading GmbH) on the question of the place of supply of greenhouse gas emission allowances that the place of supply located in the recipient country cannot be shifted to the country of origin, even if the supplying entrepreneur was aware of VAT fraud.

E. Freitag / A. Mühlberger

The indication of "tax liability of the recipient of the service" is mandatory for triangular transactions - no subsequent correction possible

In an Austrian reference for a preliminary ruling, the CJEU ruled (on 8 December 2022, C-247/21, Luxury Trust Automobil GmbH) on the question of the necessity of the reference "Steuerschuldnerschaft des Leistungsempfängers" for the applicability of the simplification for triangular transactions that, in the absence of this reference on the invoice of the intermediate, the simplification cannot be applied and the invoice cannot be corrected later by supplementing it with regard to this reference.

E. Freitag / A. Mühlberger

The German VAT group under scrutiny

On 1 December 2022, the rulings of the CJEU on the cases Finanzamt T (C-269/20) and Norddeutsche Gesellschaft für Diakonie (C-141/20) were published. In these cases, the CJEU had to deal with various questions regarding the German implementation of the VAT group. As the German implementation of the VAT group is similar to the Austrian implementation, the rulings could also have an impact on Austrian VAT groups.

E. Freitag / C. Pollak

2022 revision of Austrian VAT Guidelines issued by the Austrian Ministry of Finance

The Austrian Ministry of Finance usually revises the guidelines it publishes for various types of tax (e.g. inter alia for corporate tax, income tax, VAT or the reorganization tax act) on a yearly basis. Recently, the final revision for 2022 of the VAT Guidelines was issued. 

E. Freitag

Recent developments in European social security in case of cross border home office activities

If the employee’s employer and residence are in different states, teleworking and working from home office to an essential extent result in a change of the applicable social security law. The special Covid-rule, which allows for working from home office without any change in the applicable social security legislation, has been prolonged until 30.6.2023. Moreover, a framework exemption agreement with Germany will enter into force at 1.1.2023, according to which working from the residence state will be possible up to an extent of 40% without any consequence for the social security allocation.

K. Daxkobler

Recent changes with relevance for personal income tax

During November several bills with relevant changes to personal income tax were passed in the Austrian parliament, in particular regarding the EUR 3,000 tax-free inflation premium (“Teuerungsprämie”). 

K. Daxkobler

Austrian Administrative Supreme Court on payments into the maintenance reserve according to Art 31 of the Austrian Condominium Act in case of renting and leasing real property

According to Art 31 of the Austrian Condominium Act, condominium owners are required to set aside an appropriate reserve to provide for future expenses/refurbishments. The purpose of the provision is to save funds for high expenses that do not recur annually, in particular for major maintenance and improvement work, and thus to avoid the costs of raising money and interest associated with taking out a loan. The Austrian Administrative Supreme Court recently decided in a case in which a condominium owner rented out real property and claimed the contributions paid by him to the reserve as expenses in his taxable income from renting and leasing. The Austrian Administrative Supreme Court decided that the payments into the maintenance reserve do not yet lead to income-related expenses. These payments can only be deducted as income-related expenses when and insofar as an actual payment is made from the reserve, which has the character of income-related expenses. 

M. Vaishor / K. Postlmayr

CJEU invalidates public access to UBO-Registers as breach of fundamental rights guaranteed by the EU-Charter

The decision of the CJEU issued November 22, 2022 invalidates an important tightening imposed by the 5th EU-AML-Directive (AMLD 5), namely the mandatory access to beneficial owner data of corporate and other legal entities, e.g. Foundations, in all cases by any member of the general public.

According to the judgement the interference with the rights guaranteed by the Charter infringed by that measure is neither limited to what is strictly necessary nor proportional to the objective pursued.

The link providing public access pursuant § 10 BORA in Austria was immediately deactivated by the Registration Authority (MoF).

C. Edelhauser / E. Dibelka

Proposed extension of exchange of information on crypto assets (DAC 8)

As an extension of the mandatory automatic exchange of information, the EU Commission published a proposal on the eighth extension stage of the Directive on Administrative Cooperation (DAC 8) on December 8, 2022. According to this, certain transactions in connection with crypto-assets are to be covered by the reporting obligations from 2026 onwards - a major step towards creating a regulated and legally secure environment. In the following article, we explain which service providers will be required to report which transactions, and when and by what deadlines.

M. Petritz / M. Deichsel

Exemption from Austrian Emissions Trading System for Participants in EU ETS

Austrian facilities already covered by the EU Emission Trading System (power plants, industry factories, etc) are exempt from the Austrian National Emissions Trading System. Just recently, a directive containing details of the implementation of this exemption (especially the direct exemption “at source”) was published. Application of the “exemption at source” helps to safe liquidity but requires immediate action and co-operation with gas and fuel suppliers.

B. Matzka

Request for suspension of levying income tax: Expatriation of taxpayer to Spain not relevant for the assessment of the application

If a taxpayer moves his residence to Spain, this is no obstacle for the approval to suspend the payment of taxes. The possibility to collect the taxes is not endangered due to the mutual assistance among EU member countries.

C. Endfellner

Austrian Federal Finance Court: NO reopening of proceedings in case of cross-procedural knowledge of the facts

New facts are required for the reopening of proceedings by the tax authority. In this context, the level of knowledge of the tax authority based on the respective annual declaration and its enclosures is of particular importance. Under certain circumstances, however, facts disclosed to the tax authority in previous years may prevent a reopening of proceedings by the tax authority according to a recent decision of the Austrian Federal Finance Court.

S. Papst / W. Gurtner

Austrian Administrative Supreme Court on intentionally defective appeal – immediate dismissal

If a taxpayer intentionally submits a defective appeal to the Austrian Administrative Supreme Court in order to obtain an extension of the appeal period, the appeal must be rejected immediately. Deliberately defective appeals to the Austrian Administrative Supreme Court are to be judged as abuse of rights. NO improvement possible.

S.  Papst / W. Gurtner / S. Rettenbacher

A miss is as good as a mile: Austrian Federal Finance Court on voluntary self-disclosure – NO exemption from punishment in case of inadequate disclosure

For a voluntary self-disclosure to exempt from any fiscal criminal consequences, all of the requirements specified in the law must be fulfilled. Among other things, the circumstances relevant for the calculation of the taxes to be paid must be disclosed to the extent that the authority can assess the taxes without any delay. Exemption from punishment does NOT occur, if the tax authority has to carry out further investigations in order to be able to assess the taxes. Lack of experience in filing a self-disclosure and any errors based thereon are to the detriment of the taxpayer. A lack of knowledge on the requirements for a voluntary disclosure does not exclude the taxpayer from criminal liability according to a recent decision by the Austrian Federal Finance Court.

S. Papst / M. Meilinger / S. Rettenbacher