English Summary 07-09/2023

Tax News 07-09/2023

Tax News 07-09/2023

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Tax Deadline September 30, 2023: application for a reduction of preliminary tax payments 2023, application for a refund of input VAT from other EU-countries for the year 2022, 5.88 % interest for assessment 2022

Since the deadline for applying for a reduction of preliminary tax payments for 2023 ends on September 30, 2023, and interest will be charged on tax arrears for the assessment year 2022 as of 01.10.2023, it is advisable to review the tax situation and the expected tax burden for the years 2022 and 2023 by October 1, 2023. Furthermore, the application for a refund of input VAT from other EU-countries for the year 2022 must be filed until September 30, 2023. Last but not least, financial statements with the balance sheet date Dec 31, 2022 have to be filed with the Austrian companies’ register until September 30, 2023. If this deadline is missed the company itself and its managing directors may be confronted with fines.

F. Kleemann / F. Popl / B. Stangar

Digital Declaration for Withholding Tax Exemption - Implementing Regulation and Reporting Scheme Published

A digital declaration for a withholding tax exemption has been introduced, effective January 1, 2025. Such declarations have to be submitted to the tax office electronically. Recently the Federal Ministry of Finance (BMF) issued an implementing regulation in this context, which defines in more detail the type of transmission and the specifications of the data to be transmitted. The XML schema for the reporting files, including a list of error codes and examples, has been published on the BMF website.

P. Rümmele

Contributions in respect of the Austrian Broadcasting Corporation (“ORF-Beiträge”) for enterprises

Starting with 1.1.2024, contributions in respect of the Austrian Broadcasting Corporation (“ORF-Beiträge”) will have to be paid not only by private households, but also by enterprises, based on the “ORF-Beitrags-Act”, which is entering into force on 1.1.2024. The ORF-Beitrags-Act refers to rules of the municipal tax law.

K. Daxkobler / F. Rihl


Do unrecoverable assignments of claims lead to a VAT refund?

On February 9, 2023, the CJEU judgment on the Euler Hermes case (C-482/21) was published. In this case, the CJEU had to deal with the question whether insurance payments for bad debts that are unrecoverable can lead to a VAT refund. The CJEU concludes that a national rule refusing a VAT refund on such insurance payments is not contrary to EU law.

E. Freitag / C. Pollak

Charging e-vehicles is considered a supply of electricity for VAT purposes

On April 20, 2023, the CJEU judgment on the Dyrektor Krajowej lnformacji Skarbowej case (C-282/22) was published. In this case, the CJEU had to deal with the question of whether the supply of electricity with additional services as a single complex supply is a supply of goods or a supply of services. The CJEU concluded that the supply of electricity is the main supply and the associated services only served for an easier purchase of electricity.

E. Freitag / C. Pollak

Deficit activities of the public sector - non taxable person

In two decisions of 30th March 2023, C-612/21 and C-616/21, Gmina O and Gmina L., the CJEU dealt with the question of whether services provided by a municipality, such as equipping residents with PV systems at only 25 % of the cost or arrange for asbestos removal for the benefit of its residents who own immovable property, constitute activities as a taxable person. As according to the ECJU the services have to be provided for payment and within the framework of an economic activity, which was not the case in either of the two cases, the municipalities did not qualify as entrepreneurs.

E. Freitag / A. Mühlberger


CBAM (Carbon Border Adjustment Mechanism) - New reporting requirements as of October 1, 2023

The CBAM Regulation officially entered into force on May 17, 2023. The reporting requirement for specific commodity imports is mandatory during the transition period starting October 1, 2023, with the first reporting period for importers ending on January 31, 2024. The reporting requirements as well as the preliminary methodology for calculating embedded emissions released during the manufacturing process of CBAM goods, were detailed described in an implementing regulation adopted by the Commission on August 17, 2023.

E. Freitag / K. Nadlinger / A. Mühlberger


New Regulation for Cross-Border-Commuters in the Austrian-German double tax treaty

On August 21st, 2023 Austria and Germany have agreed upon an amendment of the double tax treaty (DTT). Among other changes, a modification of the regulation for Cross-Border-Commuters in Art 15 par 6 DTT was included. As of January 1st, 2024, the requirement for the status as a Cross-Border-Commuter is merely to have ones main residence located close to the border between Germany and Austria whilst having ones workplace located in the near vicinity across the border. A daily cross-border-commute will not be required anymore. This should lead to more flexibility for personnel and employers in applying the regulations for Cross-Border-Commuters – especially considering the increased occurrence of home-office-activities, which were previously harmful to the applicability of the regulation. As set forth in the amended Art 19 DTT, also public service employees will be able to benefit from the Cross-Border-Commuters regulation. The amendments will be applicable as of January 1st, 2024.

K. Daxkobler

Taxation of executive remuneration pursuant to Art 15 DTT Austria-Japan

In an EAS information, EAS 3444 of 5 June 2023, the Federal Ministry of Finance deals with the question of whether the remuneration of a managing director of an Austrian company resident in Japan is covered by Art 15 DTT Austria-Japan (remuneration of supervisory board and board of directors). The remuneration from the activity as managing director of the Austrian company are to be classified as remuneration for the supervisory board and board of directors within the meaning of Art 15 DTT Austria-Japan, since this, in deviation from Art 16 OECD-MC, this also covers "payments similar remuneration of the supervisory board or board of directors", and in no. 3 of the Protocol to the DTT Austria-Japan, "Article 15 of the Agreement refers to the payments referred to in that Article, irrespective of whether a member of the board of directors or a similar organ board of directors or similar body of a company performs a supervisory or supervisory or managerial activities." This is to follow the Japanese understanding of the provision, according to which executive functions are also covered by Art 15 DTT Austria-Japan (see explanatory comments on the government bill 6 of the Supplements XXVI GP). Consequently, the income is taxable in Austria as the country of residence of the company. Pursuant to Art 23 para 2 DTT Austrian-Japan, Japan must credit the tax levied in Austria.

C. Juritsch


Classification of contract for work or services? No presumption of correctness of what is agreed in writing

When assessing a contract as a contract for work or a contract for services, the characteristics of a contract of work within the meaning of the Austrian Income Tax Act (“EStG”) – binding of instructions and integration in the business organism of the employer – must be considered in the overall context. According to the Austrian Administrative Supreme Court the chosen designation of the written contract as a contract for services or as a contract for work is irrelevant for the classification - there is no presumption of the correctness of what has been agreed in writing.

S. Papst / E. Hemetsberger / W. Vötter


Financial Video Identification Ordinance

Due to requirements under EU and international law, it is increasingly necessary to grant persons not resident in Austria access to electronic communication channels to the Federal Tax Administration, unless the use of the means of identification is possible under the eIDAS Regulation. According to the currently applicable legal basis, this requires in some cases either a physical appearance at the Austrian tax office or a notarised special power of attorney. Both are often not possible for the persons concerned. With the thirteenth amendment of the FinanzOnline Ordinance, the registration for FinanzOnline is expanded to include the possibility of a video-based electronic procedure pursuant to § 1 of the Financial Video Identification Ordinance, Federal Law Gazette II 2023/247. The Ordinance shall enter into force on 1 September 2023. For further details and FAQs refer to MoF-Website: Video-Ident-Procdure.

C. Juritsch

Austrian Administrative Supreme Court on reopening of the proceedings: Tax authority "rehabilitates" reopening justification in second round

The transmission of a new payslip is not in itself a new fact within the meaning of Art 303 General Federal Fiscal Code. Only information contained in the payslip can constitute new facts. If a reopening is cancelled due to insufficient justification, the tax authority may justify a new reopening by stating that the reopening is not based on the same facts as in the first reopening procedure. 

S. Papst / S. Rettenbacher

Liability of an authorized officer (Prokurist) for VAT of a bankrupt private limited company (GmbH)?

According to the Austrian Federal Finance Court, an authorized officer (Prokurist) is no representative in the sense of Art80sqq of the General Federal Fiscal Code. Thus, contrary to managing directors and members of the board of directors, an authorized officer is not liable for unpaid duties of a Ltd/PLC that went bankrupt. However, the tax authorities appealed against this decision so that the Austrian Administrative Supreme Court (VwGH) will decide this issue finally.

C. Endfellner


Act on Tax Offences: Recent Legal Changes

The Tax Amendment Act 2023 and the Central Electronic System of Payment Information Implementation Act 2023 also bring new changes to financial criminal law. The following article provides an overview of the most important changes.

S. Papst / G. Schaunig

Fiscal Criminal Offences: Crucial Side Stages in Practice

In practice, there is often a lack of awareness that in the event of a conviction under financial criminal law, in addition to the classic sanctions - primarily fines and, in particularly serious cases, imprisonment - there are additional far-reaching risks both for the taxpayer and for tax representatives.

S. Papst / M. Meilinger

Responsibility of associations/companies under Austrian Criminal Law: No attribution of offences by employees of subcontractors to the association/company

Under Austrian criminal law employees of subcontractors are not to be considered employees of the contracting association. The conduct of employees of subcontractors is not attributed to the contracting association due to the lack of employee status under the Association Responsibility Act (Verbandsverantwortlichkeitsgesetz, VbVG). Independently of this, the contracting association can be held liable for breaches of due diligence by its own employees and decision-makers, e.g. through insufficient monitoring and control of the proper fulfilment of its own customs obligations legally outsourced to the subcontractor.

S. Papst / E. Hemetsberger / W. Vötter


Self-provided construction services are not relevant for the tax exemption for self-constructed properties

Capital gains from the sale of real property derived by individuals are subject to tax with a flat tax rate of 30 % (January 1, 2016 – present). These capital gains are exempt if the property was self-constructed by the seller (inter alia). However, the exemption is applicable only to the extent that the taxpayer bore the financial construction risk. Self-provided construction services by the tax-payer (or help provided by relatives free of charge) cannot be regarded as construction costs of the building. According to a recent decision by the Austrian Federal Finance court, the tax exemption only applies if the construction costs to complete the building (e.g. material costs) exceed the fixed price of the building shell. 

M. Vaishor


News on Austrian Beneficial Owners Register Act

  • Draft amendments to the Austrian Beneficial Owners Register Act (BORA) were issued by the Registration Authority (Ministry of Finance – MoF) in May 2023 and were recently passed as law BGBl. I Nr. 97/2023 on July 20, 2023, without considerable changes during the peer review process and as such, a series of significant critical comments was ignored.
  • Thus, the newly amended BORA provides for the following important changes to prevailing/current legislation, that became/will become effective progressively starting August 1, 2023:
  • Access to UBO-data in the Austrian UBO-Registry requires evidence of a “legitimate interest” for third parties (as opposed to AML/KYC-obligated parties or Austrian authorities). However, during the review process rights to be heard are not granted to involved entities and UBOs.
  • The legitimate objectives of the Austrian UBO-Registry and the UBO-data held therein are vastly extended beyond the combat against money laundering and terrorist financing, namely, to enforce international sanctions, enhance transparency of public procurements and the collection of public revenue, e.g., for combatting dummy companies, and most recently to combat social security contribution fraud.
  • Access to and enhanced user powers in the Austrian UBO-Registry are granted to a huge number of local authorities, most recently also to national health insurance bodies.
  • The cooperation of local and foreign authorities and organisations to fulfil the newly enhanced objectives of BORA are significantly (also technically) intensified, including the exchange of data and UBO-relevant documents nationally and internationally.
  • Mandatory reportable data (under severe financial crime penalties) is widely enhanced, effective as per July 1, 2024, with respect to UBO-relevant nominee/fiduciary relationships throughout the entire ownership and control structure as well as with respect to specific information to be disclosed on assets granted by the grantor/settlor/trustor to a (local or a superordinated foreign) foundation or trust.
  • Reporting obligations are specified to be fulfilled within 4 weeks for non-reportable entities that become reportable as well as for reportable entities that become non-reportable and wish to take advantage of their new non-reportable status.
  • Financial criminal offences were softened, amended, and enhanced with respect to reporting violations as well as for the application of access to the UBO-Registry by third parties without “legitimate interest”.
  • A new ranking was introduced for Austrian tax authorities with respect to the recipient of the service of documents initiating administrative law enforcement procedures for missing/late UBO-Reports, to be delivered only to officially authorized recipients, yet to the obliged entity only in case no authorized recipient was established towards (any of the) tax authorities.
  • User fees for access to the Austrian UBO-Registry (to gain extracts from the registry for a certain entity) shall increase significantly (for single excerpts more than 33%, for excerpt quotas more than 70% or 80%), according to the draft amendment to the administrative order (WiEReG-NutzungsentgelteVO) issued by the MoF in early July 2023.

C. Edelhauser

Austrian Administrative Supreme Court on the liability of landlords for gambling levy debts for tenants

In its decisions Ro 2021/17/0005-14 and Ro 2021/17/0006-4, issued on 18 April 2023, the Austrian Administrative Supreme Court (“VwGH”) dealt with the question of whether liability of landlords for gambling tax debts of their tenants can be derived from Section 59 (4) lit a of the Austrian Gaming Act (“GSpG”). This question was the subject of appeals before the Supreme Court, in which numerous landlords were held liable under this provision for outstanding gambling tax debts of their tenants (in some cases in the millions), who carried out gambling operations subject to gambling tax in the rented premises. In the above-mentioned decisions, the Supreme Court rejected the claim in this regard "already due to the circumstances", because the specific tenancy agreements were concluded before the enactment or entry into force of the corresponding norms of the GSpG and they could not be unilaterally terminated and thus there was no possibility for the landlords in question to exclude or limit their liability risk. On the other hand, (especially) in the case of tenancies entered into after 2011, a liability claim by landlords in this regard could prove to be lawful at best. There seems to be a need for action in letting and advisory practice.

C. Juritsch