CONSULENTI DEL LAVORO
Scheda Paese - Austria
Il 1 Agosto 2016 è stato pubblicato sulla Gazzetta Federale Austriaca il 'EU-Abgabenänderungsgesetz 2016'. Veda la sezione Transfer Pricing nella parte dedicata alla tassazione di gruppo di questa guida, la sezione BEPS e la sezione Altri Elementi.
Il provvedimento sopra citato, che prevede numerosi emendamenti, non ha in realtà apportato cambiamenti significativi alla regolamentazione della imposizione societaria.
Sulla base del 'KMU-Förderungsgesetz', il Ministro Federale Austriaco della Scienza, Ricerca e dell?economia hanno emanato una direttiva il 7 Marzo 2017 riguardante il beneficio fiscale per gli investimenti effettuati per la crescita. Veda la sezione Crediti d'imposta e Incentivi della presente guida per maggiori informazioni.
Imposte sul reddito delle società
Base imponibile dell'Imposta sul Reddito delle Società (Korperschaftsteuer)
Le società (a Responsabilità Limitata [GmbH] o Per Azioni [AG]) sono assoggettate a tassazione in Austria sull'intero reddito ovunque prodotto (in Austria o all'estero) senza alcuna limitazione. Un soggetto d'imposta non-Austriaco (senza alcuna sede legale né luogo di effettiva gestione sociale in Austria) è soggetto a tassazione limitatamente ad alcuni redditi di fonte austriaca.
Aliquote d'imposta (Korperschaftsteuer)
Vista la qualificazione delle società come soggetti autonomi d'imposta, occorre effettuare una distinzione tra i due livelli di imposizione: quello societario e quello dei singoli soci. A livello societario il reddito è tassati con aliquota ordinaria del 25%, indipendentemente dalla distribuzione di tale reddito ai soci. A livello dei singoli soci, questi sono solitamente assoggettati a una ritenuta d'acconto del 25% al momento della distribuzione di tale reddito.
E' previsto anche un importo minimo di imposta da corrispondere in ogni caso da parte delle imprese in perdita, imposta che può essere utilizzata senza alcuna limitazione temporale negli anni successivi in compensazione dell'imposta sul reddito che si dovesse generare in caso di esercizi in utile.
Il valore minimo da corrispondere da parte di una AG è pari a Euro 875,00 per ciascun quadrimestre intero.
Il valore minimo da corrispondere da parte di una GmbH è pari a Euro 437,50 per ciascun quadrimestre intero.
Per le GmbH costituite successivamente al 30.06.2013, il valore minimo dell'imposta sul reddito è pari a Euro 125,00 per ciascun trimestre intero nei primi 5 anni e a Euro 250,00 nei 5 anni successivi.
Imposta Locale sui Redditi delle Società
In Austria non sono previste imposte locali sui redditi delle società.
Una società è considerata fiscalmente residente in Austria qualora la stessa abbia stabilito nel paese la propria sede legale o il luogo in cui viene effettivamente esercitata la conduzione dell'attività. Il 'luogo di conduzione effettiva' è ubicato laddove la gestione delle attività quotidiane è effettivamente esercitata e non ove le singole decisioni aziendali vengono assunte. In ogni caso, la definizione di 'luogo della conduzione effettiva' in base alla legge austriaca, non si discosta significativamente dalla definizione che della stessa ne danno le Linee Guida OCSE.
Stabile Organizzazione (Permanent Establishment - PE)
La Stabile Organizzazione è definita dalla legge fiscale austriaca come il luogo di stabilimento fisso ove l'attività imprenditoriale viene esercitata e, in particolare:
il luogo ove vengono assunte le decisioni aziendali
il luogo ove siano presenti impianti, magazzini, centri di acquisto e vendita e altri stabilimenti ove l'imprenditore o suoi rappresentanti stabili esercitano l'attività d'impresa ad esso riconducibile, oppure
il luogo ove è situato un cantiere per un periodo superiore ai 6 mesi.
Anche in questo caso, la definizione di Stabile Organizzazione secondo le norme austriache, si uniforma a quella del Commentario al Modello OCSE dei trattati contro le doppie imposizioni.
Imposta sul Valore Aggiunto - IVA - (Mehrwertsteuer)
In linea generale, la legge IVA austriaca è improntata sulla Sesta Direttiva Europea. In base a tale legge le società e gli individui che esercitano un'attività economica con carattere di continuità sono qualificabili come imprenditori ai fini IVA. In quanto tali gli stessi devono addebitare l'IVA con un'aliquota del 20% alle forniture di beni e servizi effettuate nei confronti dei loro clienti. Per alcuni beni e servizi (quali ad esempio alimenti, prodotti editoriali, trasporto di passeggeri ed eventi culturali) è prevista l'applicazione di un'aliquota ridotta al 10%. Altre transazioni sono esenti dall'applicazione dell'imposta (ad esempio le esportazioni).
In accordo con il 'Steuerreformgesetz 2015/2016', l'aliquota ridotta subisce un incremento dal 10% al 13% per le cessioni di animali, sementi e piante, servizi culturali, accessi a musei e zoo, proiezione di pellicole, legname, cessione di vino da parte del produttore, viaggi aerei, accessi a piscine pubbliche, cure dell'infanzia, servizi di ospitalità ed eventi sportivi. Mentre l'aliquota applicabile alla somministrazione di alimenti nei ristoranti, alle locazioni e ai farmaci rimane invariata al 10%.
Detrazione dell'IVA sugli acquisti
Le imprese possono detrarre l'IVA assolta sugli acquisti a meno di quella direttamente collegata ad acquisti esenti (ad esempio interessi e premi assicurativi). Nel caso in cui l'impresa ponga in essere operazioni non imponibili ai fini IVA (quali ad esempio esportazioni), tali operazioni non faranno sorgere alcuna limitazione in capo all'impresa circa la detraibilità dell'IVA assolta sugli acquisti. Ai fini della detraibili dell'IVA, l'impresa dovrà ottenere la relativa fattura da parte del proprio fornitore, fattura che deve rispettare alcuni requisiti formali specifici.
Dichiarazione IVA e versamenti
Le imprese hanno l'obbligo di redigere ai fini IVA dichiarazioni mensili o trimestrali entro il 15° giorno del secondo mese successivo rispettivamente al mese o al trimestre di riferimento. La differenza tra l'IVA a debito e quella a credito deve essere versata all'erario se positiva o viene rimborsata direttamente se negativa (credito per il contribuente) sul conto corrente comunicato. Per gli scambi intracomunitari sono previsti appositi modelli di comunicazione.
Alcune importazioni di merci da paesi extra europei scontano in Austria gli oneri doganali calcolati in base a una tariffa doganale che si conforma a quella in uso presso la maggior parte dei Paesi aderenti all'Unione, quindi basata sulla natura dei beni importati.
Le access vengono applicate a determinati prodotti quali il petrolio e i suoi derivati (approssimativamente da 40,00 a 600,00 Euro ogni 1.000 litri), il tabacco (dal 13% al 47% del prezzo) e le bevande alcoliche (l'aliquota dipende dalla bevanda).
Stability fee for banks
A stability fee for financial institutions is charged at 0.09% based on balance sheet totals of EUR 1 billion to EUR 20 billion and 0.11% on balance sheet totals over EUR 20 billion. In addition to the stability fee, there is a contribution of 45% to 55% imposed on the stability fee, which has to be paid by banks for periods till the end of the year 2017. These contributions are deemed to be used for stability measures regarding the capital market.
Real estate tax
Local authorities annually levy real estate tax on all Austrian real estate property, whether developed or not. The tax is levied on the assessed standard ratable value (Einheitswert) of immovable property. The assessed value is usually substantially lower than the market value. The effective tax rate depends on the intended use of the real estate and is calculated using a special multiplier.
- Agricultural area and forestry
-- 1.6%o for the first EUR 3,650 of the assessed standard ratable value.
-- 2%o for the amount of the assessed standard ratable value exceeding EUR 3,650.
- Buildings and property are taxed at 2% of the assessed standard ratable value. This multiplier is reduced for:
-- Single family houses
--- to 0.5% for the first EUR 3,650 of the assessed standard ratable value and
--- to 1% for the next EUR 7,300.
-- Leasehold and shared property
--- to 1% for the first EUR 3,650 of the assessed standard ratable value and
--- to 1.5% for the next EUR 3,650.
-- All other property
--- to 1% for the first EUR 3,650 of the assessed standard ratable value.
After the assessed standard ratable value is multiplied by the relevant multiplier, the real estate tax is calculated by using a special municipal rate fixed by each municipality (maximum 500%). Finally, the tax amount is reduced by a general reduction of 25% as stated by law and increased by a 35% inflation adjustment.
Real estate transfer tax
Tax is generally levied at 3.5% on transactions that cause a change in the ownership of Austrian real estate or in the person empowered to dispose of such property (e.g. direct owner). Real estate transfer tax is generally calculated on the basis of the acquisition price. However, according to the draft of the 'Steuerreformgesetz2015/2016', the taxable base has to be at least the property value (Grundstuckswert), which is derived from the fair market value and will be defined by the Austrian legislature by regulation.
In the case of real estate transfers within the closer family circle, the three-fold assessed ratable value (capped at 30% of the fair market value, applicable for transfers as of 1 June 2014) is taken as the tax base, and a tax rate of 2% applies. For transfers in connection with corporate restructuring under the Reorganisation Tax Act, the twofold assessed standard ratable value is taken as the tax base, and the standard tax rate applies.
Based on the bill, the property value will be taken as the taxable base for free of charge transfers (i.e. family and non-family transfers). The rate for transfers without compensation will be subject to different levels. It is to be 0.5% for a property value of below EUR 250,000, 2% up to EUR 400,000, and 3.5% over EUR 400,000. In case of business transfers, the tax is capped at 0.5% of the property value. For transfers in connection with corporate restructuring under the Reorganisation Tax Act and the consolidation of shares, the tax rate will amount to 0.5% of the property value. The amendments shall enter into force for transfers after 31 December 2015.
Real estate transactions with a tax base of EUR 1,100 or below are exempt.
Note that an additional 1.1% registration fee becomes due upon incorporation of the ownership change in the land register. The registration fee is assessed on the basis of the market value. There is a preferential taxation (three-fold ratable value capped at 30% of the fair market value) in case of family transactions or corporate restructuring qualifying for the application of the Reorganisation Tax Act.
Capital transfer tax (Gesellschaftsteuer)
Capital transfer tax is imposed at a rate of 1% on the initial contribution of capital, other contractual or voluntary contributions in cash or in kind, and certain hybrid financing instruments to Austrian corporations. However, in many cases, a taxable event for capital transfer tax purposes can be eliminated by careful structuring (e.g. contributions made by the indirect shareholder of an Austrian company [so called 'grandparent contributions'] do not trigger capital transfer tax).
As a result of the 'Abgabenanderungsgesetz 2014', capital transfer tax will be entirely abolished as of 1 January 2016.
Stamp duty is imposed in connection with certain legally predefined transactions for which a written contract has been established (e.g. lease contracts, bills of exchange, assignments of receivables). The Austrian administration's understanding of a 'written contract' is very broad and covers not only paper contracts but also contracts concluded by electronic means (e.g. electronically signed emails).
The stamp duty is triggered upon the establishment of a legal relationship if at least one Austrian party is contractually involved or, even if a contract is concluded between non-Austrian parties only, if the subject of the contract relates to Austria (e.g. lease contract on Austrian real estate). However, various possibilities are available for most legal transactions subject to stamp duty to structure them in a way without triggering stamp duties (e.g. setting up of contracts abroad, offer-acceptance procedure, usage of audio-tapes).
Loan and credit agreements are not subject to stamp duty.
The stamp duty rates for the most common legal transactions are as follows:
Legal transactions Stamp duty (%)
Lease agreements 1.00
Certificates of bonds 1.00
Bill of exchange 0.13
Assignment of receivables 0.80
Payroll taxes are income taxes levied on employment income, withheld by the employer. A progressive tax rate is applied to the tax base, being the salary after deduction of allowances and various expenditures (e.g. social security contribution). The employer is legally obligated to withhold the payroll tax and liable to do so vis-a-vis the Austrian tax authority.
Social security contributions
Monthly rates of compulsory (pre-tax) social security contributions are shown below for pensions, sickness, unemployment, accident insurance, and certain minor contributions:
Social security categories Employer (%) Employee (%) Total (%)
Sickness 3.83 3.82 7.65
Unemployment 3.00 3.00 6.00
Pension 12.55 10.25 22.80
Accident 1.30 0.00 1.30
Miscellaneous 0.95 1.00 1.95
Total 21.63* 18.07* 39.70*
In addition, the employer is liable to the Family Burdens Equalisation Levy at the rate of 4.5%, the municipal tax on payroll at the rate of 3% of monthly gross salaries and wages, and a public transportation levy of EUR 2 per week per employee in the city of Vienna. In addition, a contribution to the Chamber of Commerce is levied at a rate of approximately 0.40% (between 0.36% and 0.44%) of monthly gross salaries paid (depending on the province). Moreover, a contribution to the mandatory employee pension fund at the rate of 1.53% on monthly gross salaries is payable for employments subject to Austrian employment law.
Austrian branches of foreign corporations are taxed in the same way as Austrian corporations, except that inter-company dividends received by Austrian branches of non- EU corporations are not tax exempt (see the Income determination section) and Austrian tax losses can be carried forward only if they exceed non-Austrian profits. Books and records generally can be kept abroad but must be brought to Austria in case of a tax audit (upon official request).
Taxable income is determined based on statutory accounts under Austrian generally accepted accounting principles (GAAP) adjusted for certain deductions and additions prescribed by the tax law.
In general, inventories are valued at the lower of cost or market. If specific identification during stock movements is not possible, other methods, such as last in first out (LIFO) and first in first out (FIFO), are permitted when shown to be appropriate. Conformity between financial book keeping and tax reporting is required.
Capital gains/exit taxation/inbound transfer
Generally, capital gains (short and long-term) are part of the normal annual result of a corporation and are taxed at the ordinary CIT rate (25%).
A special tax treatment applies to capital gains with respect to the exit of taxable assets. In the case of a transfer of assets that formed part of a business from Austria to a foreign country (e.g. allocation of assets to foreign branch), latent capital gains generally are taxed at the time of the transfer. However, if these assets are transferred to an EU member state, capital gains taxation can be postponed upon request until the assets are sold or transferred outside the European Union.
In case of an inbound transfer, generally, the fair market value of the assets is considered for Austrian income tax purposes (step up). Therefore, any hidden reserves accumulated abroad are not taxed in Austria.
Dividends received from an Austrian company at the corporate shareholder level are generally excluded from the tax base (no minimum stake, no minimum holding period). This tax exemption refers to domestic dividends only, not to capital gains or losses.
Additionally, dividends received from companies located within the European Union or from countries within the European Economy Area (EEA) with which Austria has concluded a comprehensive agreement on mutual assistance regarding the exchange of information are also tax exempt if the foreign company is subject to a tax similar to the Austrian CIT and if the foreign CIT rate is not below 15%.
In cases where the dividends from foreign investments are taxable, foreign CIT can be credited against the Austrian CIT.
Portfolio dividends (i.e. dividends from an investment below 10%) received from corporations located in member states of the European Union, as well as dividends from corporations that are located in those EEA and third countries with which Austria has concluded a comprehensive agreement on mutual assistance regarding the exchange of information, are generally exempt from CIT. However, under special circumstances, a switch-over to the credit method, as outlined under International participation exemption for dividends and capital gains below, has to be considered. Moreover, the dividend must not be deductible for tax purposes in the source state in order to be tax exempt at the level of the Austrian recipient (valid for substantial investments and portfolio dividends).
A conversion from revenue reserves (retained earnings) to capital by a company does not lead to taxable income for the shareholder (but triggers 1% capital transfer tax, which will be abolished as of 1 January 2016). However, capital reductions are treated as taxable income if within ten years prior to the capital reduction the above-mentioned increase in capital was repaid to the shareholder. Otherwise, they are tax exempt.
International participation exemption for dividends and capital gains
Dividends received from a foreign company are also tax exempt at the corporate shareholder level if the Austrian company holds at least 10% of the issued share capital for a minimum holding period of one year (international participation exemption). Furthermore, both capital gains and capital losses derived from shares qualifying for the international participation exemption are tax neutral. This means a deduction of capital losses is no longer available. However, the parent company can exercise an (irrevocable) option for each single participation acquired to treat both capital gains and capital losses as taxable (spread of losses and depreciations over a period of seven years). The option refers to capital gains (losses) only and does not affect the tax treatment of ongoing dividend distributions.
In the case of presumed tax abuse, the participation exemption for dividends and capital gains is replaced by a tax credit (switch-over-clause). The credit system is applied if the foreign subsidiary does not meet an active-trade-or-business test (i.e. passive income from royalties, interest, etc. is greater than 50% of total income of subsidiary) and, at the same time, is regularly subject to a foreign income tax burden of 15% or below. The domestic and foreign participation exemptions are available to Austrian resident corporations and to Austrian branches of EU corporations only, but not to Austrian branches of non-EU corporations.
Interest income Interest income is taxed at the general CIT rate of 25%.
Rental income Rental income is treated as normal business income.
Austrian resident corporations are taxed on their worldwide income. If a double taxation treaty (DTT) is in force, double taxation is mitigated either through an exemption or by granting a tax credit equal to the foreign WHT at the maximum (capped with the Austrian CIT incurred on the foreign-source income). If foreign WHT cannot be credited at the level of the Austrian corporation (e.g. due to a loss position), Austrian tax law does not allow one to carry forward the foreign WHT to future assessment periods. However, if the source of the income is a non-treaty country, exemption or a tax credit shall be available based on unilateral relief (representing a discretionary decision of the Austrian Ministry of Finance only but no legal entitlement for the applicant). Austrian tax law does not provide for a deferral of taxes on foreign income. Special rules for taxing undistributed income of foreign subsidiaries are applicable only to foreign investment funds.
Please note that Austrian Tax Law does not define special controlled foreign company (CFC) rules. However, under certain circumstances, the Austrian tax administration, under a substance over form approach, taxes passive income of foreign subsidiaries of Austrian companies located in low tax jurisdictions (see switch-over-clause under International participation exemption for dividends and capital gains above).
Depreciation and amortisation
Only the straight-line method is accepted for tax purposes, whereby the cost is evenly spread over the useful life of an asset. For certain assets, depreciation rates relevant for tax purposes are prescribed by the tax law and shown in the following chart:
Assets Buildings (industrial use) Buildings (banking, insurance) Other buildings Automobiles
Depreciation rate (%) 3.0 (2.5% as of 2016) 2.5 2.0 12.5
Based on the draft of the 'Steuerreformgesetz2015/2016', buildings used as business assets will be depreciated at a rate of 2.5%, irrespective of the use of the building. This amendment will be applicable for tax years starting after 31 December 2015.
Tax depreciation is not required to conform to financial depreciation under Austrian GAAP. If depreciated property is sold, the difference between tax value and sale proceeds is taxed as a profit or loss in the year of sale.
Trademarks are usually amortised over 15 years. Other intangibles have to be amortised over their useful lives.
Goodwill arising in the course of an asset deal for tax purposes must be amortised over 15 years. Goodwill that arose in the course of a share deal can be amortised only if the acquired company is included in a tax group and if the share deal was effected until 28 February 2014 (see the Group taxation section). Goodwill arising as a result of a corporate merger cannot be amortised.
Organisational and start-up expenses
Generally, organisational and start-up expenses are tax deductible.
Interest payments (also inter-company) are generally tax deductible if they meet the general arm's-length requirements. See Thin capitalisation in the Group taxation section for more information.
According to current tax law, interest expenses resulting from the debt-financed acquisition of shares are usually tax deductible. This is so even if the Austrian participation exemption regime applies (see the Income determination section).
However, interest expenses relating to the debt-financed acquisition of shares from related parties or (directly or indirectly) controlling shareholders are generally non- deductible. This disallowance of interest also applies in circumstances where the shareholder acquiring the shares has been funded by a debt-financed equity contribution (insofar as the equity contribution was made in direct connection with the share acquisition). The deductibility of interest expenses incurred in connection with the debt- financed acquisition of shares from a third party is not covered by this rule.
All financing costs (e.g. fees, foreign exchange expenses, legal advice) that relate to tax- exempted international participations are non-deductible. Until 12 June 2014, foreign exchange expenses or profits accumulated in connection with the financing of tax- exempted international participation were treated as tax deductible.
Certain accruals (such as provisions for liabilities and impending losses) running for more than 12 months as of the closing date of the accounts are accepted for tax purposes at 80% of their value only. Exempted from this reduction are provisions for personnel benefits (severance payments, pensions, vacations, and anniversary awards) for which specific reduction and computation methods have been provided and provisions that were already calculated by discounting a future obligation.
As a result of the 'Abgabenanderungsgesetz 2014', long-term accruals made from 30 June 2014 onwards are to be discounted, depending on their actual duration. The discount rate to be used is 3.5%. Valuation differences resulting for already existing long-term accruals (if accruals under the new approach are lower than under the former approach) have to be spread over three years. In case the accrual under the former approach (80%) is lower than under the new approach (discount with 3.5% per annum), the former approach has to be continued. The exemption for personnel benefits (severance payments, pensions, vacations, and anniversary awards) will still apply.
In general, lump-sum accruals and accruals for deferred repairs and maintenance are not allowed for tax purposes.
Valuation allowances for bad debts are, in principle, deductible for tax purposes, unless they are calculated on a lump-sum basis. In case of inter-company receivables, appropriate documentation regarding the compliance with the arm's-length principle is required.
Donations to certain charitable institutions are generally tax deductible, up to a limit of 10% of the current year's profit.
Furthermore, donations to certain public Austrian institutions, such as universities, art colleges, or the academy of science, and to non-profit organisations performing research and educational activities mainly for the benefit of the Austrian science or economy may also be deducted as operating expenses, up to the limit of 10% of the current year's profit. The same is valid for donations granted to foreign institutions with residence in the EU/EEA or third countries with which Austria has concluded an agreement on mutual assistance regarding the exchange of information. The requirement for deductibility is that the activities of the organisation are carried out mainly for the benefit of Austrian science or the Austrian economy.
Meals and entertainment
The deductibility of costs for business lunches generally is limited to 50% of actual expenses incurred (provided the business lunch had the purpose of acquiring new business).
The deductibility of entertainment expenses is restricted to advertising expenses.
Payments to a member of the supervisory board (Aufsichtsrat) are tax deductible up to a limit of 50%. Salaries (including all payments in cash and in kind, excluding privileged severance payments) exceeding EUR 500,000 per person and per year are not tax deductible. This rule also covers bonus payments and pension schemes. However, for pension schemes there is a EUR 500,000 per annum threshold to be considered separately from the other salary payments.
Fines and penalties
Fines and penalties are generally not tax deductible.
Austrian and foreign taxes on income and other personal taxes, as well as VAT insofar as it relates to non-deductible expenditures, are non-deductible. Other taxes, such as payroll or capital transfer taxes, are deductible.
Net operating losses
Tax losses can be carried forward without any time limit. However, tax loss carryforwards generally can be offset against taxable income only up to a maximum of 75% of the taxable income for any given year. Some exceptions apply (i.e. in connection with tax groups, in the case of liquidations or the recapture taxation of foreign losses), allowing a company to charge tax loss carryforwards available against 100% of annual taxable income.
The Austrian tax law does not provide for a carryback of tax losses.
Tax loss carryforwards may be lost in the case of a share deal being classified as loss- trafficking (so called 'Mantelkauf) or in the course of a legal restructuring leading to similar results.
Under Austrian tax law, a share deal against compensation is classified as aMantelkauf if, from a substance over form perspective, the 'economic identity' of a company is changed due to the transaction. The change of economic identity of a company is realised if all of the following structural changes are made to the acquired Austrian company having the tax loss carryforwards available:
Change of shareholder structure.
Change of the organisational structure.
Change of the business structure.
All three conditions cumulatively have to be met. There is no exact time period defined within which they have to be met; however, meeting them within one year after the share transfer usually is regarded as a strong indication for a Mantelkauf.
Payments to foreign affiliates
Generally, there are no restrictions on the deductibility of royalties, interest, and service fees paid to foreign affiliates, provided they are at arm's length (which should be appropriately documented by agreements, contracts, calculation sheets, etc.). Payments to affiliated companies not meeting arm's-length standards are treated as a hidden distribution of earnings (i.e. they are not tax deductible, and WHT is usually triggered at source). See Transfer pricing in the Group taxation section for more information.
In addition, interest and royalty payments made by an Austrian company to affiliated companies located in low tax jurisdictions (effectively taxed below 10%) are nondeductible as well.
Note that the domestic implementation of the EU Interest Royalty Directive, which abolishes WHT on cross-border payments of interest and licence fees (regardless of whether taken out by deduction or by assessment) between affiliated companies in the member states, should be considered.
Two or more companies can form a tax group, provided the parent company directly or indirectly owns more than 50% of the shares in the subsidiaries. The tax group also can include foreign group members. However, the scope of foreign tax group members is limited to corporations being resident in EU member states and in states that have entered into a comprehensive administrative assistance arrangement with Austria. If a group member withdraws from the group within a minimum commitment-period of three years, all tax effects derived from its group membership must be reversed.
Within a tax group, all of the taxable results (profit and loss) of the domestic group members are attributed to their respective group parent. From foreign tax group members, tax losses in the proportion of the shareholding quota are attributed to the tax group parent. The foreign tax loss has to be calculated in accordance with Austrian tax law. However, it is capped with the amount actually suffered based on foreign tax law. Starting in 2015, ongoing tax losses from foreign group members can only be recognised to the extent of 75% of the profit of all domestic group members (including the group leader). The remaining loss surplus may be carried forward by the group parent. In addition, foreign tax losses utilised by the Austrian tax group parent are subject to recapture taxation at the time they are utilised by the tax group member in the source state, or in the moment the group member withdraws from the Austrian tax group.
Under the recapture taxation scheme, the Austrian tax group has to increase its Austrian tax base by the amount of foreign tax losses used in prior periods.
For the purpose of the application of the recapture taxation scheme, a withdrawal from the tax group is also assumed if the foreign group member significantly reduces the size of its business (compared to the size of the business at the time the losses arose). Reduction of size is measured on the basis of business parameters such as turnover, assets, balance sheet totals, and employees, while the importance of the respective criteria depends on the nature of the particular business.
Under the previous tax group regime, goodwill that arose in the course of a share deal (acquisition of an Austrian active business company from a third party contractor) had to be amortised over 15 years, provided that the acquired company was included in a tax group. Goodwill amortisations have now been abolished and are applicable only for share deals effected until 28 February 2014. Existing goodwill amortisations are grandfathered, provided the goodwill amortisation potentially impacted the share purchase price.
Write-downs of participations in tax group members are not tax deductible.
Under Austrian Tax Law, there are no explicit transfer pricing regulations available defining, in detail, the local requirements with regards to arm's length, the documentation standards required, penalties, etc. In general, Austria applies the OECD transfer pricing guidelines referring to the OECD model tax convention. Furthermore, Austrian transfer pricing guidelines have been issued by Austrian tax authorities. The guidelines represent the Austrian authority's understanding of intercompany business relationships with regards to their arm's-length classification and are based on the OECD transfer pricing guidelines.
According to these guidelines, all business transactions between affiliated companies must be carried out under consideration of the arm's-length principle. Where a legal transaction is deemed not to correspond to arm's-length principles, the transaction price is adjusted for CIT purposes. Such an adjustment constitutes either a constructive dividend or a capital contribution. Currently, there is the option of applying for a non-binding ruling of the tax authorities. Additionally, there is an advanced ruling opportunity available. Under this regulation, binding information in the fields of transfer pricing, group taxation, and mergers and acquisitions (M&A) can be requested from the Austrian tax authorities against payment of an administrative fee (the fee rate depends on the size of the applicant's business).
There are no explicit tax regulations available under Austrian tax law stipulating the minimum equity required by a company ('thin capitalisation rules'). Basically, group financing has to comply with general arm's length requirements. Therefore, an Austrian group entity being financed by an affiliated entity must be able to document that it would have been able to obtain funds from third party creditors under the same conditions as from an affiliated financing entity. Therefore, the appropriate ratio between an Austrian company's equity and debt will mainly depend on the individual situation of the company (profit expectations, market conditions, etc.) and its industry. Nonetheless, the fiscal authorities in administrative practice (i.e. no 'safe-harbour' rule) tend to accept a debt-to-equity ratio of approximately 3:1 to 4:1. However, the debt- to-equity ratio accepted by tax authorities also strongly depends on the average ratio relevant for the respective industry sector. If an inter-company loan is not accepted as debt for tax purposes, it is reclassified into hidden equity and related interest payments into (non-deductible) dividend distributions.
Furthermore, under Austrian commercial law, a minimum equity ratio of 8% is claimed. If the equity ratio of the company falls below 8% and its earning power (virtual period for debt redemption) at the same time does not meet certain requirements, a formal and public reorganisation process will have to be initiated.
Controlled foreign companies (CFCs)
The Austrian Tax Law does not define special CFC rules (see Foreign income in the Income determination section).
Tax credits and incentives
Foreign tax credit (matching credit)
Generally, foreign WHT can be credited against Austrian CIT (see Foreign income in the Income determination section). In special cases (e.g. Brazil, China, Korea), the DTT provides for a matching credit, which allows the credit of a pre-defined amount that exceeds the actually paid foreign WHT.
Research and development (R&D) incentives
R&D costs are fully deductible at the time they accrue. An R&D premium of 10% (i.e. R&D expenses x 10% = R&D premium) may be claimed for R&D activities performed in Austria. As a result of the draft of the 'Steuerreformgesetz 2015/2016', the R&D premium will be increased to 12% for tax years starting after 31 December 2015.
In order to receive the R&D premium of 10% (12%), an expert report (issued by the Austrian research promotion organisation [FFG]) is required that confirms the nature of the expenses in question as R&D expenses. The definition of privileged R&D expenses is taken from the Frascati Manual.
The R&D premium is also available in case of contract R&D; however, R&D incentives cannot be claimed by both principal and agent (the agent is just able to apply for the premium if the principal does not). In case of contract R&D, the privileged R&D costs are capped at EUR 1 million per year.
Austria has no 'patent box regime'.
A tax bonus payment of 6% or, alternatively, an allowance of 20% can be claimed for expenditures in connection with the training of employees. These incentives can be claimed for external training expenditures and for in-house training expenditures, provided that there is a dedicated in-house training department (for in-house training expenditures, only the allowance can be applied for).
According to the draft of the 'Steuerreformgesetz 2015/2016', employment incentives will be abolished and are ultimately applicable for tax years starting before 31 December 2015.
For investment in certain regions, government grants and subsidies are available and are generally individually negotiated.
Under Austrian domestic law, there is generally a 25% (27.5% as of 1 January 2016 according to the draft of the 'Steuerreformgesetz 2015/2016') WHT on dividends (profit
distributions) paid to a foreign parent company. The WHT has to be deducted and forwarded by the Austrian subsidiary to the tax office.
To end up with the reduced WHT rate as defined under the DTT applicable, Austrian tax law provides for the following alternative methods of WHT relief: refund method or exemption at source method.
The Austrian subsidiary generally has to withhold 25% (27.5%) WHT on profit distributions to the foreign parent company, and the parent company has to apply for a refund (of the difference between 25% (27.5%) WHT and the lower DTT rate). In the course of the refund process, the Austrian tax administration analyses whether the foreign shareholder can be qualified as beneficial owner of the dividends paid. If the refund is approved by the Austrian tax authority, dividend distributions within the following three years can be done without deduction of WHT (for distributions of a comparable size and provided the foreign holding structure did not change in the meantime).
Exemption at source method
Relief at the source is available only if the direct parent company issues a written declaration confirming that it is an 'active' company carrying out an active business that goes beyond the level of pure asset management (holding activities, group financing, etc.) and has its own employees and office space at its disposal (substance requirements).
WHT on dividends paid to EU companies
With regard to dividends paid to EU resident corporate shareholders, Austria has implemented the EU Parent/Subsidiary Directive according to which domestic WHT is reduced to zero. The requirements for the reduction are that the EU resident parent company, which also has to meet the substance requirements mentioned above (see Exemption at source method) at the moment of the dividend distribution, must directly own at least 10% of the share capital of the Austrian subsidiary for a period of at least one year. In case of foreign EU shareholders being qualified as pure holding companies, the Austrian tax administration does not allow an exemption at source but claims the application of the refund method.
Provided the requirements according to the EU Parent/Subsidiary Directive are not met, Austrian WHT has to be deducted. If an EU parent company cannot credit the Austrian WHT deducted against the CIT of its resident state (e.g. because the foreign dividend income is exempted from the CIT or due to a loss position of the shareholder), it is entitled to apply for a refund of the Austrian WHT. This application has to include a confirmation/documentation that the Austrian WHT could (fully or partly) not be credited at the level of the parent company.
Repayment of equity
The tax-wise equity of a company has to be annually reported to the Austrian tax authority as part of the CIT return (so called 'Evidenzkontò). This equity can be repaid to the domestic or foreign shareholders without triggering Austrian WHT. However, the tax-wise classification of a dividend as 'capital repayment' has to be shown in the shareholder resolution about the distribution.
According to the draft of the 'Steuerreformgesetz 2015/2016', the tax free repayment of the tax-wise equity to the shareholders will only be possible in case no retained earnings are available and if the repayment is covered by the tax-wise equity. This amendment will enter into force for tax years starting after 31 December 2015.
Interest payments to non-resident companies are currently not subject to WHT (provided no Austrian real estate property is used as security). However, interest on Austrian bank deposits received by individuals resident in the European Union is subject to 35% EU WHT on the basis of the Austrian EU Withholding Tax Act.
As of 2015, interest on Austrian bank deposits or Austrian bonds, where the paying/ depositary agent is located in Austria, is subject to 25% WHT. This regulation is applicable for non-resident individuals.
On royalties paid to a non-resident company, Austrian WHT at a rate of 20% has to be deducted. This tax rate can be reduced under an applicable DTT or under the application of the EU Interest Royalty Directive, which was implemented in Austrian Tax Law.
The standard tax assessment period in Austria is the calendar year. However, a company's financial year may deviate. When the tax and financial years deviate, the tax assessments for a year are based on the profits derived in the financial year(s) ending in the respective calendar year (e.g. if tax year is 1 June 2015 to 31 May 2016, then assessment is financial year 2016).
Generally, the CIT return has to be submitted electronically by 30 June of the calendar year following the year in which the fiscal year of the company ends. However, if the company is represented by an Austrian certified tax advisor, the tax return can be submitted by 31 March of the second following year at the latest (if the company will not be formally requested by the tax office to file it earlier). If the end of a tax year is 31 May 2015 for example, the filing deadline is 30 June 2016 (without tax advisor) or 31 March 2017 (with tax advisor).
Electronic filing of annual CIT returns
The annual CIT return (as well as the annual VAT return) has to be filed by electronic means. In the case of a company that cannot reasonably be expected to file tax returns electronically due to the lack of technical prerequisites, filing of the tax return is allowed to be done via pre-printed forms.
Payment of tax
CIT is prepaid in quarterly instalments during the calendar year, with a final settlement subsequent to the annual assessment (payment falls due one month after assessment). Prepayments of CIT generally are based on the most recently assessed tax year's tax burden (unless the taxpayer can show that its tax charge for the current year will be lower).
The difference between CIT as per the final assessment and the prepayments made is interest bearing from 1 October of the year subsequent to the year when the tax claim arose up to the date when the assessment is released (late payment interest). Interest at a rate of currently 1.88% is applied to underpayments (as well as overpayments) of tax.
Tax audit process
Tax audits usually cover CIT, VAT, and WHT. Separate audits are carried out in connection with payroll taxes and social security contributions.
In general, companies are audited every three to four years. The audit period usually covers three to four fiscal years, so, generally, each fiscal year is audited.
The duration of a tax audit depends on the number of years covered and on the complexity of topics (usually between 0.5 and 1.5 years). These topics usually cover ongoing compliance, such as tax returns. Specific topics vary from company to company and can involve, for instance:
- Business restructurings (applicability of Austrian reorganisation tax act, transfer of intangibles, etc.).
- Tax groups (all group members are audited together).
- WHT on dividends, licences, etc.
- Compliance with arm's-length principle in case of group transactions (tax auditors recently tend to focus on transfer pricing issues).
Statute of limitations
The right to assess CIT is subject to a general limitation period of five years after the end of the calendar year in which the fiscal year ends. Additionally, the limitation period can be extended in cases where certain interruptive events (e.g. tax audit, tax assessment) take place within the general limitation period. The maximum limitation period is generally ten years.
The limitation period in case of tax evasion is also ten years.
In certain cases, the maximum limitation period can be extended to 15 years.
Choice of business entity
The most important types of companies in Austria are the limited liability corporation (GmbH) and the joint stock corporation (AG). Foreign investors generally choose the GmbH since it provides a higher degree of corporate law control and allows for lower equity provision.
As a legal entity, the GmbH exists upon registration with the Companies' Register. The application for registration must contain the notarised signatures of all managing directors. The articles of association must be drawn up in the form of a notarial deed (written document executed by a public notary) and must, as minimum requirements, include the name of the company as well as its seat, the business purpose, the amount of registered capital, and the capital contribution of each of the various owners.
The minimum share capital for a GmbH amounts to EUR 35,000. Formation costs and fees are linked with the amount of the minimum share capital.
The minimum share capital for companies founded after 30 June 2013 is EUR 10,000 for the first ten years after foundation. In the case a company intends to claim this foundation privilege, an amendment of the articles of association is required. After the first ten years upon incorporation, the minimum share capital will be automatically increased to EUR 35,000.
Generally, one half of the registered capital must be raised in cash while the remainder may be contributed in the form of assets (contributions in kind). Of the original capital contribution, 25%, or at least EUR 17,500 (EUR 5,000 in case of a start-up), must actually be paid in upon incorporation. Under certain conditions, the capital can be provided exclusively in the form of assets (incorporation in kind, in this case the contribution is subject to an audit verifying the market value of the assets contributed). The articles of association may provide for additional capital contributions payable by the owners on the basis of a resolution adopted by the shareholder meeting.
The minimum share capital of an AG is EUR 70,000. For an AG, the same payment regulations apply as for a GmbH, but the owners can agree upon a further capital contribution going beyond the nominal value of the shares (premium). The premium is shown on the company's balance sheet as a capital reserve.
Since 2004, the company type Societas Europaea (SE) can be chosen in Austria. The SE is a stock corporation based on community law. The advantages of this legal form are the simplification of organisational structures (in particular for international groups) and the possibility of cross-border transfers of corporation seats without loss of the legal identity. The SE allows the choice of a business location under an economic point of view as well as the choice of the most favourable legislation. The minimum share capital required for the incorporation of a SE is EUR 120,000 while the statutory seat of the corporation must be located in the same country where the place of management is located in.
EU state aid investigations and base erosion and profit shifting (BEPS)
Austria is involved in the BEPS-development process at an EU/OECD level. Up to now, the recommendations of the OECD have been implemented to local law only in individual areas (see the limitation of the deductibility of interest under Payments to foreign affiliates in the Deductions section). The main changes in local tax law due to the BEPS- project are expected to be implemented in 2016.
EU state aid investigations
Currently, there are no investigations on the part of the European Commission with regard to the Austrian tax law. However, some legal proceedings regarding taxation issues are pending with the European Court of Justice (see C-66/14, FA Linz [group taxation] and BFG Linz RE/5100001/2014 [refund of energy taxes]).
International exchange of information
The Republic of Austria signed a Model 2 Intergovernmental Agreement (IGA) with the United States (US) on 29 April 2014. The IGA came into force on 30 June 2014. The approval of the Austrian Parliament took place on 23 October 2014. This agreement has been enacted in order to support the implementation of the Foreign Account Tax Compliance Act (FATCA) in Austria. The Model 2 IGA includes the obligation of Austrian financial institutions to forward summarised information (collected data) regarding the accounts of US customers (recalcitrant account holders) to the US Internal Revenue Service (IRS). Due to the conclusion of this agreement, the US tax authorities will not withhold a 30% WHT on capital income in Austria.
Restructuring measures (M&A from a business perspective)
Transfers of assets and undertakings can be realised with retroactive effect and be tax neutral within the framework of the Austrian Reorganisation Tax Act.
The legislation administers the following areas (Article I-VI):
- Mergers (within EU also cross border) of corporations.
- Special conversion (from corporations to partnerships).
- Contribution of businesses and exchange of shares.
- Merger of partnerships.
- Demerger of partnerships.
- Demerger of corporations.
If the reorganisation qualifies for the application of the Austrian Reorganisation Tax Act, the reorganisation steps are realised tax neutrally and with a retroactive effect as of the reorganisation due date. Existing tax loss carryforwards can be transferred under certain conditions as well. Furthermore, several other tax privileges are granted under the Reorganisation Tax Act for stamp duties, capital transfer tax, etc..