English Summary 5/2025

In the Austrian Corporate Income Tax Act, the application of CFC-Taxation as well as the deduction prohibition for interest or license fee payments to related parties require inter alia “low taxation”. Previously, CFC-taxation applied if the respective entity was taxed with an effective tax rate of not more than 12.5 %. On the other hand the above-mentioned deduction prohibition applied if the income was taxed in the hands of the recipient at an effective rate of less than 10 %. In the wake of Pillar II, both provisions are adapted, insofar as an effective tax rate of less than 15% may lead to the application of the respective provision (CFC-taxation, respectively the deduction restriction) going forward.

M. Vaishor

The Fraud Prevention Act 2025 introduces changes to the EU Reporting Act (EU‑MPfG) and the Account Register Act (KontRegG).

In the EU‑MPfG, the exemption from the reporting obligation for financial institutions is abolished, and the scope of reportable information is expanded.

Under the Account Register Act, the tax authorities are granted extended authorities - analogous to the ones in the GMSG - to review the compliance with reporting and due‑diligence obligations. Access to the account register for sanctions purposes is extended to the Ministry of Finance.

In the Banking Act (BWG), the scope of bank secrecy is narrowed to enable reporting under the Crypto Reporting Act and the EU Reporting Act.

S. Haslinger, P. Rümmele

The CJEU addressed in its judgment from September 4, 2025, C-726/23, Arcomet Towercranes whether TNMM[1]‑based payments between related parties constitute a VAT‑taxable consideration for intra‑group services. It answered in the affirmative for contractually specified management/support services and clarified that tax authorities may require proportionate supplementary evidence of actual performance and use for taxable outputs to grant input VAT deduction.

E. Freitag / C. Bianco

[1] Transactional net margin method.

The CJEU addressed in its judgment from October 23, 2025, C-234/24, Brose Prievidza whether a VAT refund may be denied for a tooling delivery that remains in the supplier’s Member State. It held that without physical movement of the tools to another Member State there is no intra‑Community supply and that the VAT refund may not be denied.

E. Freitag / C. Bianco

In certain cases (e.g. share deals, gifts) Austrian real estate transfer tax (RETT) is generally calculated based on the so-called “real estate value” which is a special tax value that can be calculated as a lump sum based on the provisions of a respective ordinance issued by the Ministry of Finance. In a recent decision, the Austrian Federal Finance Court dealt with open questions regarding the calculation of the real estate value in case of warehouses built using lightweight construction. KPMG Austria is happy to provide support regarding the calculation of the real estate value of Austrian properties.

M. Vaishor / F. Popl

The tax office can revoke a decision of the tax office at the request of a party or ex officio within one year of its announcement if the decision of the tax office proves to be incorrect. This is a very far-reaching possibility for subsequent correction. However, the Austrian Federal Finance Court recently set limits here.

S. Papst / G. Schaunig

The right to inspect files applies both in tax proceedings and in financial criminal proceedings. It is important for defendants to have comprehensive knowledge of the files in order to mount an effective defense, especially in criminal financial investigations. According to the Austrian Federal Finance Court, access to files must be granted in any case, regardless of the specific interest pursued in criminal tax proceedings. However, it is not possible to inspect files in the case of mere enquiries with regard to any future proceedings to be conducted by other authorities according to the Austrian Administrative Supreme Court.

S. Papst / G. Schaunig

The question of whether capital income earned abroad constitutes intentional ‘tax evasion’ if it is not included in the Austrian tax return has been the subject of countless Austrian court decisions. A recent decision of the Austrian Federal Finance Court shows that not every capital investment abroad that is not taxed in Austria is automatically to be qualified as intentional tax evasion. It depends on the individual case. Especially in connection with possible media coverage, the following is considered a general rule: Switzerland/Liechtenstein ≠ New Zealand.

S. Papst / W. Gurtner

The Crypto Reporting Act (Krypto‑MPfG) implements the EU DAC8 directive in Austria. It introduces comprehensive identification, documentation and reporting obligations for providers of crypto‑asset services, which (unlike the GMSG and despite the tax withholding obligation) also fully apply to customers resident in Austria. Subject to annual reporting are exchange transactions between crypto‑assets and fiat currencies, exchanges between crypto‑assets and mass payment transactions. The reporting obligation is primarily tied to a MiCA authorization in Austria.

P. Rümmele

Recently, certain facilitations related to the use of cash registers were adopted.

E. Müller / P. Mayr

In Austria, there is a (one-off) tax on motor vehicles based on CO₂ emissions (excise duty).  Shortly after the amendment to the Standard Consumption Tax Act around N1 vehicles in July 2025, the BBKG 2025 will bring further changes in Standard Consumption Tax (NoVA). In addition to welcome relief (certain sales to dealers for commercial resale will no longer be taxed. The general importer can calculate and pay the NoVA for the tax debtor in the case of own imports), there will also be tightening and unequal treatment for Austrian taxpayers: the possibility of NoVA reimbursement for exports will be limited to motor vehicles that are a maximum of four years old. Furthermore, in implementation of the freedom to provide services, EU and EEA lessors and employers are given preferential treatment over domestic entrepreneurs, as NoVA is now only levied on a pro rata basis for motor vehicles that are leased to persons resident in Austria for a limited period of up to 48 months. The law was already passed by the National Council on 10 December 2025. At the time of writing this article, it had not yet been published in the Federal Law Gazette.

S. Hofbauer

In its judgment of November 13, 2025, C-639/24, FLO VENEER, the CJEU addressed the question whether the VAT exemption for intra-Community supplies may be refused solely on the basis of a lack of evidence in accordance with Article 45a VAT Regulation or whether the tax authorities are obliged to assess all the evidence submitted on the actual cross-border transport, even outside this presumption.

E. Freitag / C. Bianco

In its decision from October 2^nd, 2025 (C-535/24, Svilosa), the CJEU dealt with the question of whether a service provided free of charge by a company (commissioning and paying a law firm to represent it in legal proceedings abroad) for a third party (a foundation) without establishing a civil law relationship between the parties could be considered as ‘service’ or as ‘provision of services free of charge’.

E. Freitag / A. Mühlberger

If a party merely suggests to the tax office that proceedings be reopened after a decision has been finalized, this does not constitute an “application” by a party within the meaning of Art 303 (2) of the Austrian General Federal Fiscal Code. A “suggestion” for official reopening is not a formal application by the party, but rather merely a suggestion that the proceedings should be reopened by the authority itself. This distinction is particularly relevant in reopening proceedings that invoke new evidence as grounds for reopening. In addition, the distinction is of significant importance for other legal consequences.

S. Papst / R. Langeneder

The Austrian Federal Finance Court overturned the decision regarding a late payment penalty. The reasoning was that the appellant was not grossly negligent in the late payment of a fine imposed on him. This was because the amount reserved for the fine was in the tax account and not in the penalty account. In this constellation of facts, according to the Court, the failure to meet the payment deadline was neither probable nor foreseeable for the appellant.

S. Papst / G. Schaunig

In our Tax News 3/2025 we already reported on the formal review of the Beneficial Owners Register Act (BORA) by the Austrian Constitutional Supreme Court, based on the appeal of an investigative journalist arguing that the constitutional freedom of expression and information were violated by this legislation.

With its final Ruling the Austrian Constitutional Supreme Court declared Art 10 para 1 sec 1 BORA unconstitutional, as these provisions may cause a disproportionate restriction for “public watchdogs” having to prove a “legitimate interest” to access data in the Austrian UBO-Registry. According to the Court´s decision of October 7, 2025, G 62/2025-12, some specific restrictions of access only for third parties pursuant to Art 10 para 1 sec 1 BORA contradict their constitutional rights of freedom of expression and information acc. to Art 10 ECHR, specifically the exclusion of historic data, of certain information safeguarding data quality as well as the exclusion of the graphic display of all levels of the UBO-relevant participation chain.

However, all other reviewed provisions of Art 10 as well as Art 10a BORA remain unchanged. Consequently, the legislator will have to amend (minor) access rights of third parties in Art 10 BORA whose exclusion was declared unconstitutional by the Court´s Ruling.

C. Edelhauser

The proposed amendments will implement the latest international developments in the automatic exchange of information and the updates to the Common Reporting Standard (CRS) into Austrian law.

Existing due diligence and reporting obligations will be expanded to improve the quality of reported data. A one-time registration requirement for reporting financial institutions and a mandatory nil-return obligation will be introduced.

Going forward, customers must provide financial institutions with all documents and information relevant to their GMSG status accurately and in full upon request; breaches of this obligation will constitute a financial administrative offense.

In return, financial institutions must provide data subjects with all data‑protection‑relevant content of a report in sufficient time to allow them to exercise their data protection rights, and in any case before the information is reported.

New digital financial products will be brought within the scope of the GMSG to place them on an equal footing with traditional financial products.

The Austrian parliament passed the bill on Dec 10, 2025.

P. Rümmele

The update to the OECD Model Commentary provides, for the first time, very clear and detailed rules on whether a home office constitutes a permanent establishment for the employer. It states that if work performed in a home office amounts to less than 50% during any 12‑month period, no permanent establishment is created. If 50% or more of the activity is carried out in the home office, it will constitute a permanent establishment for the employer only if there is a “commercial reason” for using the home office. This significantly relaxes the treatment of home‑office permanent establishments compared with the previous position of the Austrian Ministry of Finance.

G. Gottholmseder

The CJEU addressed in its judgment from Cotober 9, 2025, C-101/24, Xyrality whether Article 28 of the VAT Directive applies to in‑app purchases via app stores before 2015 when the platform acts in its own name towards end customers and confirmed this. Additionally,the CJEU clarified that the place of the deemed developer service is determined under Article 44 of the VAT Directive and that showing German VAT in confirmations to consumers does not create a tax liability under Article 203.

E. Freitag / C. Bianco

In its decision of May 15^th, 2025 (C-782/23, Tauritus), the CJEU provided further guidance on the transaction value method in case of subsequent price adjustments. The CJEU addressed the question of when a price can be sufficiently determined at the time of acceptance of the customs declaration.

E. Freitag / A. Mühlberger

The tax office sends notices on Friday and the justification for the notices on Saturday into the recipient's databox. According to the Austrian Federal Finance Court, the actual delivery corresponds to the legal delivery, so the deadline begins on Saturday and not on the following Monday.

C. Endfellner

Due to the case law of the Austrian Federal Finance Court an internal control system is not sufficient, if there is only a self-control by the managing director and the monitoring of the deadlines is solely the responsibility of the managing director. In the specific case, the internal control system did not provide for any control or verification by other people. Furthermore, the court did not consider the occurrence of water damage to be an extraordinary event that would justify the complete shutdown of the office organization.

S. Papst / S. Friedwagner

The tax office reclassifies income earned by a GmbH managing director, which was subject to payroll tax in previous years, as self-employed income subject to income tax. In the following assessment years, the managing director fails to submit income tax returns but builds up a credit balance through ongoing payments into her tax account. The Austrian Federal Finance Court concluded that the taxpayer could not be accused of grossly negligent behavior due to an erroneous belief regarding the obligation to declare.

S. Papst / M. Kabler

The liquidator appealed in the name of a company regarding the fine for a too late filing under the Beneficial Owners Register Act (BORA-Act) (too late “BORA-filing”). He transmitted monthly advance VAT returns per FinanzOnline but did not know that due to this, the tax office notifies him via FinanzOnline on all tax issues concerning the company, too. He did not get any information about new messages delivered into the databox of FinanzOnline (i.e. no e-mail), consequently he was not aware that the tax office reminded him of the BORA-filing two times. The company was fined with € 5.000, his appeal to cancel this fine was rejected by the Austrian Federal Finance Court. 

C. Endfellner