Ordinance on the transfer of interest and EBITDA carryforwards during reorganisations published
An ordinance published on 2 June 2022 (“Zinsvortrags-ÜbergangsV”) provides the legal framework for the transfer of interest and EBITDA carryforwards to the receiving entity in the context of corporate reorganisations. Austrian interest limitation rule in a nutshell According to the Austrian interest limitation rule the deductibility of net interest expense for corporations is limited to 30% […]
Input VAT deduction on expenses from company outings
Due to the amendment of Section 23 Austrian VAT Act (UStG), the tolerance limit for input VAT deduction for travel-related input supplies for company outings (away days) has ceased to apply. Company outings fall under the scope of Sec 23 UStG and are thus attributable to travel-related supplies from a VAT perspective. Travel-related supplies are generally subject […]
Austrian Tax Court declares horizontal group to be permissible
In a decision of 31 March 2022 (RV/7104573/2020), the Austrian Federal Tax Court (BFG) has stated – contrary to the wording of Sec 9 Austrian Corporate Income Tax Act (KStG) – that a company group between Austrian affiliates is permissible even if the joint parent company is resident abroad and does not have a branch in Austria. […]
Remote working simplifications with Germany due to COVID-19 set to expire
The Austrian Consultation Agreement with Germany contains special rules concerning the application of the double taxation treaty, which were introduced due to the pandemic. Accordingly, employers that are resident in Germany would not be deemed to have created a permanent establishment (“PE”) in Austria if an employee who is resident in Austria works from a […]
Non-deductibility of severance payments from social plans is unconstitutional
In its decision of 16 March 2022, the Austrian Constitutional Court (VfGH) overturned the prohibition of deductions under Sec 20 para 1 subpara 8 Austrian Income Tax Act (EStG) as unconstitutional. This provision prevents the deduction of voluntary severance payments made by the employer to the extent that these exceed the amounts eligible for preferential tax treatment on the […]
Rising energy costs: Reduction prepayments of individual and corporate income tax
Austrian companies currently face rising energy costs, which may also impact their liquidity in the short term. For this reason, the Austrian Ministry of Finance (“BMF”) stated on 1 April 2022 that it will be possible to simplified reduce prepayments of individual and corporate income tax in administrative terms. The taxpayer must be able to credibly […]
From 1 April 2022, Austrian SMEs will be eligible to receive an attractive cybersecurity subsidy in the form of a non-repayable grant for investments of up to EUR 50,000. Cybercrime has become an important issue for Austrian businesses in the past year due to several high-profile ransomware attacks. This is also borne out by a PwC Digital […]
Last summer, Austria signed a Protocol amending the Double Taxation Treaty (DTT) with the United Arab Emirates (UAE) of 2003. The document provides for significant changes in certain areas. The Protocol was ratified in Austria at the end of 2021. In the UAE, government approval for the Protocol has been granted, although final ratification has […]
Quota system: Extended deadline for tax returns 2020
Tax returns (e.g. individual and corporate income tax returns or annual VAT returns) generally have to be submitted by 30 June of the following year (if submitted electronically). The tax authority may extend the deadline for submission of tax returns on a case-by-case basis (discretionary decision) following a substantiated request (individual extension of submission deadline). If […]
Austrian Supreme Administrative Court on VAT groups
In a court decision of 16 November 2021 (Ra 2020/15/0101), the Austrian Supreme Administrative Court (VwGH) confirmed that organisational integration exists if executive management is carried out by non-executive employees of a VAT group. Economic integration is also present in the specific case based on the lease of an administrative building to a bank. The overall […]
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