Posted: 30 Oct. 2022 7 min. read

Tax & Legal News in English | October

The NPO grant is entering its final phase!

More than two years have passed since the COVID-19 outbreak. A lot of associations and non-profit organizations suffered revenue losses due to the pandemic. For such organizations a fund has been set up, from which four non-repayable grants have already been paid out in the past. The fifth round is now in progress: economic impairments incurred in the 1st quarter of 2022 due to COVID-19 shall be mitigated with the NPO grant. Applications for the grant covering the first quarter of 2022 need to be filed until 31 October 2022 at the latest.

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Administrative High Court ruling on two real estate transfer tax cases

In two recent decisions (Ra 2020/16/0018, 15 March 2022; Ra 2021/16/0047, 24 March 2022), the Administrative High Court had to deal with two real estate transfer tax (RETT) related cases which both involved elements of terminated contracts. In the first case, a hotel building was acquired which had been previously rented out to a third party on the basis of a rental agreement. This rental agreement was terminated in the course of this transaction, whereby the acquirer was obligated to to make a termination payment. The competent tax office took the opinion that this termination payment is subject to Austrian RETT, which was eventually also confirmed by the Administrative High Court.

In the second case, real estate was transferred by way of a purchase agreement, for which RETT was triggered and remitted to the competent tax office. However, said agreement was terminated by both parties one month after conclusion by way of a cancellation agreement. The tax office has denied the request for a RETT refund based on Sec 17 RETT Act which was also confirmed Administrative High Court.

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Resumption of proceedings: Relevance of the state of knowledge of entire tax authority or specific tax officer?

The decisive factor for determining whether facts or evidence have newly emerged is the state of knowledge of the tax authority at the time of issuance of the assessment, which is to be reopened. However, it is questionable whose state of knowledge within the tax authority is relevant since the responsible tax officials often do not have access to the entirety of files of the authority.

According to recent jurisprudence of the Administrative High Court (VwGH 13. October 2021, Ra 2021/13/0127), the line between the knowledge and the new emergence of facts is very narrow, especially since the Administrative High Court applies a very strict standard when it comes to determining the exact point in time at which the tax authority becomes aware of the legally relevant information. In the opinion of the Administrative High Court, the state of knowledge of the specific responsible body is decisive for the question of whether facts have newly emerged. The mere fact that the information has been received by the tax office does not mean that the relevant facts have become known to the responsible body (team responsible for issuing tax assessments).

Therefore, in order to ensure that a fact becomes known so that no (administrative) resumption of proceedings is possible at a later date, the documents must be received by the specific department and not only by the tax office as an overall organization. This will usually best be ensured by using FinanzOnline as a form of transmission, especially since in the case of a successful transmission it can be assumed that the documents have been received directly by the responsible department of the tax authority. In the case of written submissions, however, it is important to note that the information contained therein is probably not considered as known until it has been scanned by the tax office and assigned to the correct electronic administrative file.

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Main residence exemption for real estate only applicable up to 1,000 sqm

In two decisions (BFG 30.3.2022, RV/5100981/2017; 1.6.2022, RV/7100215/2019), the Tax Appeals Court dealt with the issue of which property size is usually required for the construction of a single-family home and should therefore fall under the tax exemption for the sale of main residence real estates. In both cases, the existence of the requirements for claiming the main residence exemption in the context of the sale of the real estate was undisputed on the merits. The only disputed issue was a possible limitation of the tax exemption due to the size of the property. The courts decided that a limit of up to 1,000 sqm should be sufficient. 

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Contributions to repair funds not yet income-related expenses

According to the Austrian Administrative High Court payments to a repair fund cannot be claimed as income-related expenses at the time of payment since they may be used for any real estate expenses – maintenance as well as refurbishment cost - and thus it is not yet clear at the time of payment into the repair fund whether the payment fulfills the character of income-related expenses. This means that the contributions can only be considered when there are outflows from the fund that meet the characteristics of income-related expenses.

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New Developments due to the DTT Implementation Adjustment Regulation

The Ministry of Finance issued the DTT Implementation Adjustment Regulation in August 2022. This regulation contains a new provision on withholding tax relief for labor supply, the amendment of the DTT relief regulation and the repeal of country-specific DTT implementation regulations. The necessity to adjust the relief standards regarding the supply of labor is based on the previous non-conformity of the regulations with the decision of the Austrian Administrative Hight Court Ra 2020/13/0089 issued in 2021. In this connection, the procedure for relief at source for the supply of labor was adjusted as well.

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Climate protection and recycling: combating the plastic flood with single-use deposits and a reusable packaging system

In December 2021, the amendments to the Waste Management Act (AWG) and the Packaging Resolution (VVO) came into force in Austria.

With the legal changes, the legislator supports ecological goals, such as the general reduction of non-degradable plastic products. The imposition of specific bans on the placing on the market or the implementation of compulsory labelling of certain plastic products are crucial to achieving these goals. Furthermore, the expansion of mandatory participation in collection and recycling systems will make an important contribution to optimizing the collection, sorting and recycling process of packaging.

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Indexation of Austrian family allowance

Since 1 January 2019 family benefits in Austria had been adjusted to correspond to the general price level of the State of residence of beneficiary’s child. The Commission found that this indexation violated EU law. It therefore brought an action against Austria before the European Court of Justice (ECJ) that confirmed that the indexation violated EU law. The Austrian Government reacted to the ECJ judgement and retroactively amended the Austrian Act on the Family Burden Equalization Fund. Based on this amendment, any additional payments of Austrian family allowance (relating to countries with lower cost of living than Austria) shall be affected by the Austrian tax authorities on an ex officio basis, while no repayment of excessively paid out family allowance (relating to countries with higher cost of living than Austria) shall take place.

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Austrian Ministry of Finance: Further increase of interest rates by 0.75%

On 28 October 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 14 September 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).

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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 (