Tax & Legal News in English | January

Digital Platforms Reporting Obligations Act – Need for Action?

By passing the Digital Platforms Reporting Obligations Act (“Digitale Plattformen-Meldepflichtgesetz DPMG”), the extension of the EU Mutual Assistance Directive (DAC 7 - see Tax News of 12.4.2022) adopted in March 2021 was implemented in national law. The DPMG will come into effect on 1 January 2023, and regulates the reporting, due diligence and, in certain cases, registration obligations of platform operators as well as the automatic exchange of information on provider-related data within the EU. For companies that are active in the area of online platforms, it is essential to determine whether there is a need for action, since data of the providers operating on the platforms may have to be collected in accordance with the scheme as prescribed by the new legislation as of 1 January 2023!

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EU accedes the Hague Judgments Convention

On 29 August 2022, the European Union was the first contracting party to deposit its instrument of accession to the convention on the recognition and enforcement of foreign judgements in civil or commercial matters (the Convention). Shortly thereafter, Ukraine ratified the Convention, so that the Convention will enter into force on 1 September 2023. The Convention has the potential to standardize the recognition and enforcement of foreign judgments and thereby provide for a significant increase in the value of state judgments. As for the status quo, the Convention will only be applicable between the European Union and Ukraine. Therefore, the actual increase in the value of state judgments will depend on how many states will sign and ratify the Convention.

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Update of the reorganization guidelines 

The Austrian Ministry of Finance published its 2022 update of the reorganization guidelines 2002 on 3 November 2022. The update contains clarifying statements regarding various topics like the transfer of interest- or EBITDA carry forwards in connection with the interest barrier, the reintroduced investment allowance, a contribution of shares via an asset managing partnership or reorganization contracts which were concluded before the reorganization date. 

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Contesting the transfer of assets into a subsidiary in the insolvency of the parent company

The Austrian Supreme Court recently ruled that the transfer of a business part into a (newly founded) subsidiary without granting new shares (as a conventional consideration) cannot be contested in the insolvency of the parent company on the grounds of gratuitousness if the contributing parent company is – directly or indirectly – sole shareholder and the subsidiary is not overindebted.

However, the Supreme Court assumed that creditors of the parent company were disadvantaged by the transfer, which could result in the transfer nevertheless being voidable under Insolvency law. A successful contestation of the transfer would require intent on the part of the contributing company to disadvantage its creditors. In the absence of corresponding findings by the court of first instance on the intent of the representatives of the contributing parent company, the Supreme Court did not reach a final decision on the matter.

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Application of the Protocol amending the DTT with the United Arab Emirates as of 1 January 2023

We already informed in our article dated 7 January 2022 that the Protocol amending the Double Tax Treaty between Austria and the United Arab Emirates will enter into force shortly. Almost one year later, the Federal Ministry of Finance finally announced on 20 December 2022 that the instruments of ratification between Austria and the United Arab Emirates for the Protocol of Amendment to the Double Taxation Treaty between the aforementioned states (Federal Law Gazette III No. 88/2004), signed in Dubai on 1 July 2021, have now been exchanged.

Accordingly, the new provisions of the Protocol of Amendment shall enter into force on 1 March 2023, both regarding the withholding taxes and other taxes, and shall apply as of 1 January 2023.

The Publication in the Federal Law Gazette is expected shortly.

One of the important amendments of the Double Tax Treaty relates to the switch from the exemption to the credit method, which might lead to a significant additional tax burden for taxpayers (still) resident in Austria. Concerning the further details and the other amendments, we would like to refer to our article dated 7 January 2022.

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„Single VAT Registration“ to avoid foreign registrations

Recently, the European Commission published its proposal to amend the VAT Directive "VAT in the Digital Age" ("ViDA"), whereby the "Single VAT Registration" ("SVR") presented therein, is to provide exemption from the VAT registration obligation in other EU countries, which is often perceived as an administrative burden. The entry into force of the new regulations is scheduled for 1 January 2025.

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Tax remission only if the unjustified tax assessments was obviously unreasonable

According to the latest decision from the Administrative High Court (28 June 2022, Ra 2022/13/0016-6) a change in jurisdiction is not a sufficient reason for a tax remission of an unjustified tax assessment. Rather, special circumstances are required to achieve tax remission. This could be in obtaining a legal opinion from the competent tax authority, because in such cases the issued information could lead to good-faith protection and justify an unreasonable tax assessment. Furthermore, a change in case law in disadvantage of the taxpayer, whereas the taxpayer had acted in good faith relying on a tax exemption before, could be sufficient for a tax remission.

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Digitalization proceeds in Austrian corporate law

As of 1 December 2022, the Austrian legislator has partially implemented the European Digitalization Directive. As part of the implementation several parts of Austrian corporate law were amended. Of particular note are changes in the area of the establishment of corporations, the publication of registrations with the Austrian commercial register and changes to court fees. 

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Tax Deadlines February 2023

On 14 February 2023 the following declarations/payments are due:

• Intrastat-declaration for January 2023.

On 15 February 2023 the following declarations/payments are due:

• Advance VAT declaration for December 2022 or the fourth quarter 2022.
• Standardized Consumption Tax for December 2022.
• Capital Gains Tax for capital gains on debt securities for December 2022...

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