Austrian Federal Tax Court (BFG) decision: tax treatment of foreign exchange results relating to profit distributions
A few months ago, the BFG addressed in a decision (BFG 13/12/2024, RV/7100927/2020) the question of whether foreign exchange losses relating to dividend distributions from a shareholding, which is subject to the international participation exemption, are tax-deductible. Underlying case The decision was based on a case where an Austrian company held 90% of the shares […]
Austrian Federal Tax Court (BFG): prohibition on deduction of low-taxed intra-group interest and royalty payments contrary to EU law
On 7 March 2025 the BFG Vienna has ruled in two appeals (RV/7103283/2023 and RV/7102685/2022) that the prohibition on deduction of low-taxed intra-group interest and royalty payments (section 12 para. 1 subsec. 10 Austrian Corporate Income Tax Act (KStG)) is a violation of the EU’s freedom of establishment. An ordinary review of the ruling to […]
Austrian Administrative Supreme Court (VwGH) about the certificate of residence for capital gains tax relief
Following up on recent case law from the tax court (BFG), in a different legal matter, the Austrian Administrative Supreme Court (VwGH) now also addressed the requirement to provide a certificate of residence on specific Austrian forms (ZS-QU1 or ZS-QU2) to benefit from a withholding tax relief at source in its decision dated 9 October […]
Austrian Supreme Administrative Court (VwGH): calculation of real estate transfer tax
In its ruling of 24 October 2024 (Ro 2022/16/0023-4), the VwGH clarified issues regarding the calculation of real estate transfer tax for industrial buildings using the lump sum approach (“Pauschalwertmodell”) as well as issues in connection with construction rights (“Baurecht”), i.e. the right to build and own a building/construction on a land whereby the latter is […]
Recent developments in the interpretation of the “power of disposal” as PE threshold
Recently, the Austrian Federal Tax Court (BFG) dealt in its decision (BFG 8/2/2024, RV/6100451/2018) with the requirements for the power of disposal triggering a permanent establishment. Fact pattern A German dentist treated inmates of Austrian prisons. The tax authority generally has a rather broad understanding of the power of disposal over a fixed place of […]
Austrian Supreme Administrative Court (VwGH) confirms: setting up a company group with an EU/EEA group parent (without an Austrian branch) is possible
The VwGH (27/03/2024, Ro 2023/13/0018) has largely confirmed ruling of the tax court at first instance and confirmed that the current law conflicts with CJEU case law and EU primary law (see our newsletter), but has solved the technical aspects of the income attribution in such a “sister” tax group differently. Facts and circumstances A […]
High court desicion: No final loss utilization for shares in case of a liquidation of non-EU/EEA tax group member
According to the Austrian Administrative Supreme Cout (“VwGH”) the Austrian tax group regime is full set of rules, which prevails as lex specialis over the general rule for the loss utilization. Therefore the concurrent application of the general final loss utilization rules for shares were rejected by the recent case law in case of non-EU/EEA […]
BFG confirms: Relief from KESt at source only with timely certificates of residence on the ZS-QU2 form
In its decision dated 24 January 2024 (RV/1100179/2019), the Austrian Federal Financial Court (BFG) confirms the strict view of the Austrian tax authorities that, in order to be granted relief from capital gains tax (KESt) at source based on the applicable double taxation agreement, it is compulsory for the certificate of residence to be submitted […]
Decision by the Austrian Federal TaxCourt (BFG) on the issue of fault regarding violations of the prohibition on deduction pursuant to section 20 para. 1 subsec. 7 Austrian Income Tax Act (EStG) (“manager remuneration”)
In our previous newsletter we reported on a recent decision by the BFG (BFG 1 December 2023, RV/2100533/2023) strictly interpreting section 29 para. 6 Austrian Tax Criminal Code (FinStrG) (see our newsletter). In this decision, the BFG also makes interesting statements on the issue of fault regarding violations of the prohibition on deduction pursuant to […]
New decision by the Austrian Federal Tax Court (BFG) regarding tax increases in case of voluntary self-disclosures pursuant to section 29 para. 6 Austrian Tax Criminal Code (FinStrG)
In a recent decision, the BFG dealt with the question of whether a tax increase is only to be assessed if an announced tax audit was actually the reason for submitting a voluntary self-disclosure (BFG 1 December 2023, RV/2100533/2023). Regarding this matter, the BFG interprets section 29 para. 6 FinStrG strictly. An ordinary review to […]
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