Austrian Tax Amendment Act 2022 – government bill published
The government bill for the Austrian Tax Amendment Act 2022 (AbgÄG 2022) was published in mid-June. Confirmation of the final version is expected before the summer recess. The AbgÄG 2022 contains numerous minor adjustments and changes related to income taxation, VAT, and procedural law. Tax changes relating to the previously announced inflation package, particularly the abolition of ‘bracket creep’ (kalte Progression), have not been included. The main points of the AbgÄG 2022 are as follows:
Improvements to the research premium
- Application of a wage for business owners
- Business owners who do not receive a wage or salary within the meaning of the Austrian Research Premium Ordinance (for example, sole traders or co-owners, as well as any non-remunerated shareholder-managing directors), should in future be able to apply an ‘entrepreneur’s wage’ (Unternehmerlohn).
- If the activity demonstrably takes place within the area of R&D (e.g. through time records), it is planned that an amount of EUR 45 can be applied for each hour of activity, up to a maximum of EUR 77,400.- per person / per financial year.
- The proposed new rule is particularly interesting for startups and smaller companies and would be applicable to research premiums relating to the calendar year 2022 with requests possible from 30 June 2022.
- Procedural simplifications
- It is planned that the period for applications for the research premium will no longer be linked to the legal validity of an assessment notice for income tax/corporate income tax or a determination notice (. The new rule would be applicable to research premiums relating to the calendar year 2022 with applications possible from 30 June 2022.
- In addition (and on request), it will be possible for research premium applications that cover several projects to receive a partial decision by official notice. This enables official decisions to be issued regarding projects where no further review is required
- It is planned that the option of issuing partial assessment notices will apply from the entry into force of the AbgÄG 2022 and thus will apply to any open proceedings.
- Public transport ticket as a business expense: Mixed used public transport tickets (weekly, monthly, or annual tickets) can be deducted as a business expense at a flat rate of 50% from the tax assessment for 2022 without any further evidence required. The rule also applies for first-class tickets.
- Smaller photovoltaic installations: For certain small (private) photovoltaic installations, the supply of up to 12,500kwH will be made tax-exempt, with a pro-rata exemption for any excess.
- ‘Annual sixth’ and short-time working: Once again, when calculating the ‘annual sixth’ for the calendar year 2022, it is planned that a flat-rate surcharge of 15% will be applied for periods of short-time working (irrespective of how long the employee was subject to the scheme).
- Non-securitised derivatives: In implementation of an Austrian Supreme Administrative Court (VwGH) decision, in the future not only all Austrian paying agents, but also comparable foreign paying agents (in countries with comprehensive international judicial assistance) will be able to withhold a tax comparable to Austrian tax on income from capital (KESt, 27.5%) for income from non-securitised derivatives. For this purpose, the foreign paying agent (in particular, foreign credit institutions) needs to appoint an Austrian tax representative.
Corporate income tax
Refund of tax on income from capital for portfolio dividends
In implementation of VwGH case law, the possibility of obtaining a refund on tax on income from capital on request will be extended to corporations from non-EU states.
The prerequisite, however, is that the state of residence of the foreign corporation offers comprehensive international judicial assistance.
Deferral of input VAT deduction for received supplies of taxable persons using actual value taxation (Ist-Besteuerung)
A proposed change contained in the ministerial draft concerned the deferral of input VAT deduction (as well as an additional invoice hallmark) in the event that the supply was made by a taxable person using actual value taxation. This proposal has been removed again.
Expansion of scope of triangular transactions
It is planned that from 1 January 2023, triangular transactions may also be applied within chain transactions involving more than three entities.
Extension of the zero rate for protective masks
It is planned that the zero percent VAT rate on supplies and intra-Community acquisitions of protective masks will be extended until 30 June 2023.
International rail travel
From 1 January 2023, the Austrian section of the journey in cross-border passenger transportation by rail will be zero-rated for VAT purposes.
Land lease by foreign landlords
In response to the CJEU decision in Titanium, there will be no transfer of tax liability (reverse charge) and no liability for recipients of supplies if Austrian land plots are leased out by foreign taxable persons. Instead, they will be required to declare the VAT in a tax return.
Interest on VAT (Section 205c Austrian Federal Tax Code)
Implementing CJEU and VwGH case law, interest charges will be introduced on VAT credits and additional VAT charges.
As in the case of claim interest, the rate will be set at 2% above the base rate and no interest will be applied for amounts under EUR 50.
For the calculation of the interest, a distinction will be made between credits (para 1 subpara 1), additional charges (para 1 subpara 2), and differential amounts, which arise from subsequent adjustments of assessment notices (para 2) result.
Entry into force:
- All ongoing procedures should be eligible for interest on any VAT credits arising due to a monthly VAT return or an .
- In the event of a credit arising due to an annual VAT assessment notice, interest will apply to all not yet legally binding assessment notices.
- For any additional payments, the new rule will apply for the first time for cases in which the due date is after entry-into-force of the Act. For additional payments due to annual VAT assessment notices, the new rule will apply for the first time to assessments for the year 2022.
No interest is envisaged in the case of an input VAT refund to a foreign domiciled taxable person.
Lease agreement fee (Section 33, fee item 5)
Previously, it was only possible for the lessor to independently calculate the stamp duty for a lease agreement (Bestandvertrag), if the lessor regularly concluded legal transactions subject to such fees.
Under the provisions of the AbgÄG 2022, lessees who regularly conclude legal transactions subject to such fees will also be able to calculate the stamp duty owed. This applies in particular to infrastructure providers or, for example, providers of outdoor advertising space.
Digital Platform Reporting Requirement Act (DPMG)
The DPMG will transpose the requirements of the DAC 7 Directive into Austrian law. For further details, please see our Newsletter of 8 June 2022.
Requesting multilateral risk assessments
On both the EU and OECD levels, there are currently initiatives intended to enable taxpayers to obtain a joint risk assessment of circumstances from the tax authorities of multiple countries. The (uniform) information provided by the tax authorities will not offer any legal certainty, but is intended to represent a (joint) means of sounding out the view of the tax authorities.
Austria is taking part in both the OECD International Compliance Assurance Programme (ICAP) and the pilot phase of the European Trust and Cooperation Approach (ETACA). With the AbgÄG 2022, the relevant legal provisions will be integrated into Section 118b Austrian Federal Tax Code (BAO).
Video conferencing with external tax auditors
During the COVID-19 pandemic, it was temporarily permitted to communicate with the authorities using video conferencing (use of speech and image transmission technology) during tax procedures. From 1 July 2022, this rule will be made permanent and will be extended to inspections and external audits. However, no legal entitlement to use such technologies exists and it will be at the discretion of the authorities whether video conferencing is used.