English Summary 2/2024

As part of the 2023 revisions of the ETS Directive 2003/87/EC, a new emissions trading system (EU ETS2) has been created that is separate from the existing EU ETS. This new system will cover and address CO2 emissions from fuel combustion in buildings, road transport and in companies active in additional industrial sectors (mainly smaller businesses not covered by the existing EU ETS). After gradual introduction, from 2028 onwards, certificates must be acquired each year for the previous year.

K. Nadlinger / B. Matzka

In its judgment of January 11, 2024, Global Ink Trade, C-537/22, the CJEU discussed under which conditions competent authorities may deny the right to deduct the input VAT. The CJEU concludes that the authorities cannot require taxable persons to carry out too complex and comprehensive reviews and checks of their suppliers.

E. Freitag / C. Pollak

Since the beginning of the Austrian VAT Act (UStG) in 1994, a (partial) VAT exemption has been provided for supervisory board remuneration. The Austrian Ministry of Finance (BMF) has now published information regarding a relevant practical scenario: a parent company sends its board members or employees to the supervisory boards of its subsidiaries and charges the corresponding remuneration to the subsidiary company. Is this charging subject to VAT, VAT exempt, or VAT liable? According to the BMF, it is subject to VAT liability – but this would have significant consequences for companies that are not entitled to full input VAT deduction (e.g. banks and insurance companies).

In our opinion this information is not fully convincing. However, it is recommendable that the remuneration is paid to the individual directly (even if the individual is obliged to transfer the money to the employer company).

A. Helnwein / S. Stadik

In its ruling of 29^th February 2023, C-676/22, B2 Energy, the CJEU dealt with the question of whether the VAT exemption for intra-Community supplies can be denied if the taxable person cannot provide proof that the goods were supplied to a taxable person as the (actual) recipient of the goods.

E. Freitag / A. Mühlberger

In its ruling of 21st December 2023, C-288/22, TP Administration de l'Enregistrement, the CJEU dealt with the question of whether an activity of a member of the board of directors of a public limited company in return for remuneration is to be regarded as a self-employed and economic activity.

E. Freitag / A. Mühlberger

In its judgment of January 18, 2024, Hauptzollamt Braunschweig (Lieu de naissance de la TVA - III), C-791/22, the CJEU addressed the question whether a national provision that links the chargeable event for input VAT to customs law is compatible with the VAT Directive. The CJEU concludes that such a link is not provided for in the VAT Directive and is therefore contrary to the VAT Directive.

E. Freitag / C. Pollak

The deadline for submitting tax returns (electronically) is 30 June of the following year. However, if the taxpayer is represented by a tax advisor, the deadline for filing the tax return is extended to 31 March 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. Recently, the Austrian Ministry of Finance published an information that the 2022 returns can be filed until June 30, 2024 if the tax authorities have not communicated another deadline in the particular case.

It should be considered that the quota regulation for 2023 will be much stricter (see our previous Austrian tax news in this respect.

M. Vaishor

Recently Austria implemented the EU-directive 2019/1152 on transparent and predictable working conditions in the European Union into domestic Austrian law. The law was enacted with effect from March 28, 2024 and thus, particularly concerns employment contracts concluded as from this date.

K. Daxkobler

In connection with the acquisition of Austrian real property, real estate transfer taxes (3.5 %) and cadaster registry fees apply. For the registration of the acquisition of the property in the cadaster a 1.1 % registration fee is triggered. Furthermore, for the registration of a mortgage in the cadaster, a 1.2 % registration fee is levied.

The Austrian parliament recently passed a bill regarding an exemption from the above-mentioned cadaster registration fees (NOT real estate transfer taxes) for acquisitions after March 31, 2024 if the respective applications at the cadaster are filed between July 1, 2024-June 30, 2026 provided that the acquirer uses the property as his/her principal residence for at least 5 years. It should be mentioned that the exemption only applies for a tax base of TEUR 500; i. e. if the tax base exceeds TEUR 500, the registration fees are insofar levied. For the acquisition of “luxury properties” (tax base more than TEUR 2,000) the exemptions do not apply at all.

M. Vaishor

In a recent decision, the Austrian Federal Finance Court concluded that the fee exemption provision on residential rents (Art 33 TP 5 sec. 4 subsec 1 Stamp Duty Act) is also applicable to existing contracts between the landlord and the operating company of accommodation providers as the tenant and therefore no legal transaction fee is due. However, the tax authorities have filed in an official appeal against this ruling with the Austrian Administrative Supreme Court (VwGH). It remains to be seen what result the VwGH will come to.

C. Juritsch / M. Vaishor

The Austrian parliament recently passed a bill changing the Austrian constitution in order to expand the local state’s entitlement to levy vacancy taxes.

M. Vaishor

The Austrian Ministry of Finance has amended the income tax guidelines (“EStR”) with a new section 23.7. dealing with the beneficial ownership of dividends from centrally deposited shares. The EStR clarify many important practical questions, such as the permissibility of the FIFO method for determining the number of shares eligible for credit/refund, the treatment of Market Claims and the new documentation requirements for refund applications.

S. Haslinger / P. Rümmele

Most Austrian businesses are a member of the Austrian chamber of commerce. Part of the membership fee is derived as a percentage of the input VAT whereas part depends on the tax bases for wage-related taxes. As from Jan 1, 2024 the respective rates were reduced.

U. Zehetner / M. Landauf

The Council and the Parliament found a provisional agreement on parts of the AML package that aims to protect EU citizens and the EU's financial system against money laundering and terrorist financing.

• The proposal for a new AML-Regulation intends to exhaustively harmonise and intensify AML-transparency-rules throughout the EU.
• The agreement on a 6. AML-Directive deals with the organisation of institutional AML/CFT systems at national level in the member states.
• A new EU anti-money laundering authority (AMLA) will be established with powers to impose sanctions and penalties, which was now voted to reside in Germany, Frankfurt am Main.
• Requirements on the identification, verification and reporting of beneficial owners of entities were partly amended and intensified to establish harmonised rules throughout the EU.

C. Edelhauser