Posted: 30 Dec. 2022 6 min. read

Tax & Legal News in English | December

Notice Periods for blue-collar workers in the hotel and gastronomy sector

As of 1 October 2021, the notice periods for blue-collar workers (Arbeiter) have been aligned with those for salaried employees (Angestellte). Accordingly, Sec 1159 Austrian Civil Code (“ABGB”) in its new version now stipulates the same notice periods for blue-collar workers and for salaried employees. In case of termination by the employer, the notice periods now depend on the period of service performed and can be between six weeks and five months. Furthermore, in the absence of a deviating agreement, the employment relationships can only be terminated by the employer at the end of a calendar quarter, whereby it is permissible to agree on termination options at the 15th or last day of the month in the employment contract. The employee shall, in the absence of any other agreement, consider at least a notice period of one month in the event of termination by him.The stipulation also provides for the possibility of establishing deviating regulations for the employer as well as for the employee in sectors in which seasonal businesses (as defined in Sec 53 para 6 of ArbVG) predominate. The Austrian Supreme Court stated in its decision dated 24 March 2022 (reference number 9 ObA 116/21f) that the hotel and gastronomy sector is not a seasonal sector and therefore cannot make use of the exemption. Therefore, the legally stipulated longer notice periods apply. Against this backdrop it is recommendable that employers take care to adapt the employment contracts of their workers accordingly and to agree on termination options on the 15th or last day of the month to be able to take advantage on a maximum basis of termination possibilities left. 

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Agreement on Social Security between Austria and Brazil

The agreement between the Republic of Austria and the Federative Republic of Brazil on social security was signed on 17 May 2022. In the future, this will make it significantly easier to deal with social security regulations in connection with international employee assignments. The agreement has already been approved by the National Council, but has not come into force yet.

If foreign assignments take place from Austria to a country that is not located within the European Union / EEA / Switzerland or with which Austria has not concluded a bilateral agreement on social security, the national legal provisions apply in connection with social security. Austrian legislation stipulates compulsory insurance for persons employed in Austria (place of employment in Austria). Additionally, it must be checked whether there is an obligation to take out insurance, which could result in double insurance and double the burden of contributions.

The bilateral agreement on social security between Austria and Brazil brings significant relief in relation to the social security settlement for cross-border activities. Additional insurance in addition to the insurance in the home country can be avoided in the future, provided that the rules according to the agreement are observed. Before going abroad, it is advisable to check exactly which benefits are covered by the agreement. 

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Changes of the Red-White-Red Card

For employers and applicants, who are third-country nationals, there are significant changes in connection with the procedure and the requirements of the Red-White-Red Card

On 1 October 2022, changes in the legal situation regarding the Red-White-Red Card came into force in Austria. For employers and applicants, who are third-country nationals, the new regulations will bring a number of significant changes, in particular, simplifications in terms of content and procedure. These measures include especially that the minimum salaries for Red-White-Red Card and EU Blue Card have been decreased; language certificates for all Red-White-Red Cards are valid for five years instead of one; employers can file applications of family members directly in Austria at the same time as the application for the skilled worker; the Red-White-Red Card Plus for family members is now valid for the same period as the Red-White-Red Card Plus (two years instead of one).

The measures represent an important step towards a generally more legally friendly situation for (third-country) national applicants. It now remains to be seen whether these essential legal changes will be applied efficiently.

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Tax Appeals Court rules on the reporting period for input VAT deduction

The Austrian tax authorities defined the invoice date as the relevant reporting period for the deduction of input VAT in VAT returns. However, the Tax Appeals Court contradicted the Austrian tax authorities in a recent judicial decision and defined the incoming date of the purchase invoices as the correct reporting period for input VAT deduction. The Tax Appeals Court follows in this regard the jurisdiction of the European Court of Justice as well as Austrian Administrative High Court. The receipt of the purchase invoices should be documented by using a receipt stamp in case the period of the invoice date differs from the incoming date of an invoice.

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The newly-published Cryptocurrency Regulation

Based on the recently introduced tax regime for income from cryptocurrencies, the newly-published Cryptocurrency Regulation now provides an important framework for the determination of the relevant tax data based on the information provided by the taxpayer. In this context, the regulations on the simplified flow of information regarding the acquisition costs and date of acquisition for the application of the moving average price as well as the valuation of cryptocurrencies are particularly important for the enforcement of a practicable taxation of cryptocurrencies. In principle, the new regulations enter into force as of 1 January 2023.

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Pillar 2: EU Directive adopted

After several attempts, the EU finance ministers have now reached a political agreement in the ECOFIN meeting held on 12 December 2022 regarding the Directive on ensuring a global minimum level of taxation for multinational enterprise groups and large-scale domestic groups in the Union and thus green-lighted the implementation of Pillar 2. After lengthy negotiations, also the agreement of Hungary, and thus the necessary unanimity, has now been achieved.

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Cash register: obligatory generation of the "annual receipt"

For each cash register, the preparation of an annual receipt is required at the end of the calendar year. The receipt must be printed out as an “annual receipt”, checked by using the “BMF Belegcheck”-App and kept for seven years. Certain cash registers can alternatively create the annual receipt electronically and transmit it to FinanzOnline via the cash register web service. You need the annual receipt, which depending on the type of cash register has to be checked manually or is checked automatically, for the mandatory check of the tamper protection of your cash registers. It should be noted that the verification of the annual receipt (whether manual or automated) must be performed no later than 15 February 2023. If the check is carried out after 15 February 2023, this may fulfill a fiscal offence (“Finanzordnungswidrigkeit”) and result in a fine of up to EUR 5,000 per offender.

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Austrian Ministry of Finance: Further increase of interest rates by 0.50%

On 16 December 2022, the Austrian Ministry of Finance published a decree on the adjustment of rates for deferral interest, interest on arrears (“Anspruchszinsen”), interest for suspension (“Aussetzungszinsen”), interest for appeal (“Beschwerdezinsen”), and VAT interest. This decree replaces the decree of 28 October 2022, with which the interest rates were only recently raised by 0.75%.

The rates for deferral interest, interest on arrears (“Anspruchszinsen”), interest for suspension (“Aussetzungszinsen”), interest for appeal (“Beschwerdezinsen”), and VAT interest depend on the applicable prime interest rate (Sec 212 para 2, 212a para 9, 205 para 2, 205a para 4, 205c para 5 Austrian Federal Fiscal Code).

Pursuant to Section 1 of the Base and Reference Rate Ordinance, the prime rate changes in accordance with the interest rate applied by the European Central Bank to its main refinancing operations.

The decision of the Governing Council of the ECB of 15 December 2022, which provides for a further 0.50% increase in the prime interest rate, results in the following interest rates effective as of 21 December 2022. 

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Energy cost subsidy is extended and funding criteria expanded!

In response to the continuing sharp increase in energy prices, the Austrian government announced at a press conference on 22 December the extension of the energy cost subsidy including a considerable extension of the applicable funding criteria. Accordingly, the energy cost subsidy no. 1 will be extended until the end of 2022, for which a separate application phase is planned. For companies that missed the original pre-application deadline, an extension period will be offered, which was announced to last from 16 to 20 January 2023. 

In addition, a new energy cost subsidy no. 2 was announced to be established for covering the period of the entire year of 2023, which will be subject to extended funding criteria, but also allowing for higher funding-rations and increased subsidy limits. Grants of EUR 3,000 to EUR 150 million shall be available per company based on a 5-staged funding model. Based on the yet communicated details and funding criteria it is expected that additional companies will qualify for the energy cost subsidy no. 2 and that grant amounts might increase compared to the energy grant subsidy no. 1. Whether there will be a budget cap on the funds available for the energy cost subsidy no. 2, similar to the energy cost subsidy 1 has not yet been communicated and needs to be awaited like further details on funding criteria.

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Clarifications on tax-free profit participation for employees

Profit participation by the employer has meanwhile become established in operational practice and the Ministry of Finance has answered essential practical questions on tax-free profit participation in an information letter, which now are also incorporated in the wage tax guidelines (LStR).

Profit participation by the employer to active employees is tax-free up to EUR 3,000 per calendar year from 1 January 2022, whereby the tax exemption is subject to certain conditions. The profit participation must be granted to all or specific groups of employees. Insofar as the sum of the profit participation granted annually exceeds the corporate law earnings before interest and taxes (EBIT) of the financial years ending in the last calendar year, there is no tax exemption. Deviating from this, in the case of companies that are integrated into a group structure, the previous year's EBIT of the group can also be used as an alternative to the previous year's EBIT of the (individual) company. Furthermore, the profit participation may not be paid in place of the remuneration previously paid or in place of a regular wage or salary increase. Therefore, it must not be a salary conversion. Likewise, profit participation may not be based on a wage-structuring regulation (eg CLA). It is exclusively a wage tax exemption, there is currently no exemption in the area of social security and ancillary labor costs for such profit participations.

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Tax Deadlines in January 2023

On 16 January 2023 the following declarations/payments are due:

  • Intrastat declaration for December 2022.
  • Advance VAT declaration for November 2022.
  • Standardized Consumption Tax for November 2022.
  • Capital Gains Tax for capital gains on debt securities for November 2022.
  • Tax on energy, coal and natural gas for November 2022.

For an overview of all Tax Deadlines in January click here...


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Tax & Legal News Editorial

Tax & Legal News Editorial

Patrick Weninger and Madeleine Gruensteidl jointly head the editorial team of Deloitte Tax & Legal News which publishes more than 140 articles on Austrian and International Tax Law each year. Please feel free to contact them in case of any questions or remarks (