English Summary 1/2024

Notifications according to Art. 109a and Art. 109b Austrian Income Tax Act until February 29 

In respect of fees paid in 2023 for certain services outside of employment relationships to individuals or partnerships (associations) without legal capacity and for certain outbound payments effected in 2023, entrepreneurs as well as corporations under public and under private law have to submit a notification according to Art. 109a ITA resp. Art. 109b to the tax office by way of electronic data transmission until February 29, 2024. 

K. Daxkobler

Reduction of CIT prepayments due to the new minimum CIT: Application for reduction may be required

As part of the Start-Up Promotion Act, the minimum CIT for Austrian with limited liability companies (GmbH) was reduced to EUR 125,00 per calendar quarter (corresponding to the minimum tax for the newly adopted FlexCo). Minimum corporate tax is also due, even if the respective company incurs losses, however, it can be carried forward indefinitely and credited against future corporate tax (when the company achieves profits resulting in corporate tax exceeding the minimum amounts).

Currently the tax authorities are issuing assessments for CIT prepayments that still refer to the old minimum CIT (EUR 437.50 per quarter). In these cases an application for a reduction of the CIT prepayments to the new minimum CIT amount can be made.

F. Kleemann / F. Popl / A. Röck

Pillar II: Ensuring the usability of deferred taxes for global minimum tax purposes in the context of preparing annual and consolidated financial statements as per December 31, 2023

In financial years starting from January 01, 2024, corporate groups can be affected by the global minimum taxation for the first time. In this case, a minimum tax profit/loss and adjusted recorded taxes must be calculated. The latter includes current and deferred taxes. Deferred taxes that existed on the last reporting date before the first application to a corporate group have to be documented in order to be considered for minimum taxation purposes. Consequently, there may be a need to make respective disclosures in the notes to the financial statements or adjust the reporting package when preparing financial statements for December 31, 2023.

F. Brugger / A. Eder / M. Vaishor

New standardized notification of reorganizations applicable since January 01, 2024 – including a trap in practice

An amendment in the Austrian Reorganization Tax Act (RTA) modernizes the reporting obligation for restructurings according to Art. 43 RTA. From 2024 onwards, reorganizations must be notified to the tax office in a standardized, structured and (typically) electronic form. A larger amount of information regarding all restructuring partners is required.

Also, this notification does NOT replace the report pursuant to Art. 13 ARTA. Therefore, for affected contributions, mergers and real divisions outside the commercial register, both a report as well as a notification must be made under current law. This formality is important as a breach of the reporting obligation can lead to a denial of tax benefits for the reorganization.

E. Strimitzer / F. Endel

Investment allowance for investments as from January 1, 2023

For investments in green or alternatively all other investments in depreciable (tangible) assets a super deduction from investments amounting to EUR 1 million or lower is possible for corporate income tax purposes. The super deduction amounts to 15% of the acquisition costs for investments in green and 10 % of the acquisition costs for all other investments. Nevertheless, the following conditions need to fulfilled to be entitled to the deduction:

• Asset is acquired or produced after December 31, 2022
• Asset is depreciable
• Useful life of asset is 4 years or longer
• Asset is allocated to Austrian business or permanent establishment

However, for certain assets the deduction cannot be claimed, e.g. buildings, assets which use fossil fuels or are used for transportation, enhancement or storage of fossil fuels, certain intangible assets, etc.

M. Schneiderbauer / S. Pilz

Indirect uniform management within the meaning of Section 9 para 7 CIT by the founder of a private foundation in relation to goodwill amortization and subsequent effect

In the case in question (BFG 03.10.2023, RV/7101397/2023), the Austrian Federal Finance Court assessed its understanding of "uniform management" within the meaning of Art. 9 sec. 7 first case of the Austrian Corporate Income Tax Act (CITA), which regulates the so-called "goodwill amortization" within a tax group pursuant to Art. 9 CITA. The Federal Finance Court would also like to see this understanding of "uniform management" applied to Art. 12 sec. 1 subsec. 9 CITA (tax deduction ban on interest for the direct or indirect acquisition of capital shares within the group). In the case of the appeal, it is therefore disputed whether the requirements of the group exclusion of the aforementioned provisions are met, which the external tax audit affirms. In the case under appeal, two founders, who are also independently authorized foundation board members of the ownerless private foundations significantly involved in the transaction process as shareholders, work together on a recurring basis on both the buyer and seller side and exercise their influence indirectly in a coordinated manner at least on the most important issues of corporate policy in accordance with the rights reserved by the ownerless private foundations as shareholders. Although foundations are legal entities without owners and founders do not have shareholder status, the Austrian Federal Finance Court is of the opinion that the existence of a group within the meaning of Art. 9 sec. 7 first case of application CIT (group offence) must be affirmed. An appeal against the decision was filed in with the Austrian Administrative Supreme Court (VwGH; Ro 2024/13/0005). 

C. Juritsch

 

New quota regulation for filing tax returns

The deadline for submitting tax returns (electronically) is June 30 of the following year. However, if the taxpayer is represented by a tax advisor, the deadline for filing the tax return is extended to March 30 of the second following year. This extension of the deadline is regulated in the so-called quota agreement between the tax authorities and the chamber of tax advisors.

With the Tax Amendment Act 2023, the previous quota agreement was enacted in law. Inclusion in the quota will be restricted. Income tax returns containing only income from paid employment (Arbeitnehmerveranlagung) are generally excluded from the quota agreement. 

The quota is to be fulfilled in five partial quotas of 20 % each. The deadlines for partial fulfilment of the quota remain unchanged, but there is a shortening of the deadlines for tax declarations that contain determinations of business income (Feststellungserklärungen). 

Despite the quota agreement, the tax office can recall quota declarations early for certain reasons. These are listed in the quota regulation ordinance

Failure to comply will result in penalties and quota exclusions. Against this background, the tax return preparation process should be reviewed and, if necessary, brought forward.

S. Resei 

Austrian Federal Finance Court: Application for restitutio in integrum by the tax office too late

In the present case, the tax office filed an application for restitutio in integrum. The Austrian Federal Finance Court rejected the application, because in the opinion of the Austrian Tax Court, it was submitted too late due to an internal mistake in the allocation and forwarding of a document to the competent office within the Austrian Tax Office.

S. Papst / S. Rettenbacher

 

 

VAT News for the Start of 2024: Update of the Austrian Value Added Tax Guidelines 2000 and ViDa

E. Freitag / C. Pollak

Austrian Administrative Supreme Court: Mobile phone contract and vouchers for end devices are not a single supply for VAT purposes

In a recent decision, the Austrian Administrative Supreme Court addressed the question of whether the addition of a voucher when concluding a mobile phone tariff constitutes an addition as a marketing campaign, an ancillary service, or an independent service.

E. Freitag / A. Mühlberger

 

CBAM (CO₂-Border Adjustment) – Update 

The deadline for submitting the first CBAM report expired on January 31, 2024. As challenges with the registration and operation of the reporting platform, the "CBAM Transitional Registry", had already become apparent in advance, it is possible for companies to submit their first report by the end of February. The main new developments are outlined below. 

E. Freitag / K. Nadlinger / Konstantin Pollack

 

Driving a foreign car in Austria: intentional tax evasion of Austrian car registration tax and motor vehicle tax

If a foreign vehicle is used in Austria by a person residing in Austria for longer than one month, Austrian car registration tax (NoVA) and motor vehicle tax are generally payable. Austrian registration of the vehicle is not required for this. In a recent decision, the Austrian Federal Finance Court assumes that this fact is generally known. The consequence: Intentional tax.

S. Papst / A. Eisenköck / W. Gurtner

“Last-minute-surcharge":  A voluntary disclosure that has merely been prepared but not yet submitted cannot prevent the imposition of a last-minute-surcharge

If a voluntary disclosure is made after the "notification or other announcement" of a tax audit, a "last-minute-surcharge" of up to 30 % must be paid within one month in addition to the additional tax payment in order to obtain immunity from prosecution. The audit must be causal for the voluntary disclosure. According to the case law of the Austrian Federal Finance Court, only the fact that the voluntary disclosure is made after the audit announcement is decisive. The fact that a voluntary disclosure has already been prepared, but not submitted to the tax authorities, does not change this assessment.

S. Papst / T. Tiefenbacher

 

Regulations and values in social security, labor and income tax law applicable in 2024

Recently, the regulations and values in social security, labor and income tax law were published for 2024.

K. Daxkobler