Tax & Legal News in English | June

Longer rest periods for employees due to judgement of the European Court of Justice

On 2.3.2023, the European Court of Justice (ECJ) published the judgment MÁV-START (C-477/21), which deals with the right of employees to rest periods. The initial situation was the claim of a train driver against the decision of his employer not to grant him a daily rest period of at least eleven continuous hours (to which the employee is entitled according by EU law) if this rest period precedes or follows a weekly rest period or a holiday period. The railway company argues that the applicable collective agreement grants a minimum weekly rest period of 42 hours, which is significantly higher than the total rest period of 35 hours (daily rest period of 11 hours and weekly rest period of 24 hours) stipulated by EU law.

The ECJ states that the daily rest period is additional to the weekly rest period, even if it immediately precedes it. Accordingly, the weekly rest period does not begin until the daily rest period has been completed. This "chronological order" must also be considered if national legislation – as in Austria – grants a longer weekly rest period than is prescribed by EU law. The fact that in Austria the weekly rest period (36 hours) exceeds the total rest period of 35 hours provided for under EU law by one hour does not change the fact, pursuant to the ECJ judgement, that in Austria the daily rest period must be granted in addition and an attribution of these two entitlements would not be in conformity with EU law. Thus, the present ECJ ruling has an impact on Austria insofar as work schedules must be recalculated whether a total rest period of 47 hours (daily rest period of 11 hours and weekly rest period of 36 hours) is feasible if the weekly rest period is immediately preceded by the daily rest period. In the case of a classic "5-day week", no difficulties arise as the total rest period of 47 hours (11 hours daily rest period plus 36 hours weekly rest period) can be observed. We believe that difficulties may arise with working time models that deviate from this classic working time model, such as in the healthcare sector, the gastronomy and hospitality industry or industrial shift work.  

It remains to be seen whether measures will be taken by the Austrian legislator in this context and what influence this judgement of the ECJ will have on jurisdiction in Austria. Until a clarification by the Austrian Supreme Court or a possible amendment of the legislation, we recommend ensuring that the daily rest period is granted in addition to the weekly rest period - thus a total rest period of 47 hours

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ATAD III – The new EU Anti-Tax Avoidance Directive

The proposed ATAD III Directive aims to tackle tax avoidance that occurs because of the intermediation of shell companies. The draft directive intends to introduce comprehensive reporting obligations for shell companies, which may entail the loss of certain fiscal benefits. Considering the scheduled implementation of the new regulations in 2024, multinational corporations will have to swiftly examine their corporate structures in order to identify any potential implications at an early stage.

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Administrative High Court: Minimum CIT in the course of a merger

In its decision of 8 April 2022, the Administrative High Court ruled that a minimum corporate income tax credit transferred in the course of a merger can be claimed by the acquiring company as of the beginning of the day following the effective date of the merger only. Until the end of this day, the credit is still available to the transferring company. In the case of the legal successor, therefore, the minimum CIT must only be taken into account for the assessment period in which the financial year ended and the day after the merger falls.

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New form of limited liability company in Austria

After almost three years of discussion the Austrian Ministry of Justice recently published a draft law introducing a new limited liability company in Austria – the so-called “Flexible Company” (FlexCo). The FlexCo shall specifically address and attract startups by a lower share capital of EUR 10,000, an easier transfer of shares by no longer needing a notarial deed and two classes of shares, whereby one is specifically considered for employee participation. 

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Extension actions in light of current case law

The Administrative High Court (VwGH) once again clarifies in its decision that it is irrelevant whether an official act is specifically suitable, necessary, or even useful in order to constitute an act of extension within the meaning of Section 209 para 1 Federal Fiscal Code (BAO) and thereby extending the statute of limitations for assessment. Also, with regards to official acts addressed to third parties it is not necessary to specify the tax claim due to the obligation of confidentiality.

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The four-day week: a legal assessment in terms of labor and tax law

In light of the increasing degree of flexibility in the world of work, the four-day week in particular is subject to intense discussions. While some see it as a decisive factor in the highly competitive labor market, others dismiss it as a threat to prosperity and efficiency.

Regardless of the sociopolitical and economic debate, however, the four-day week also requires compliance with several legal conditions in order to avoid hidden additional costs and the emergence of unwanted claims.

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Tax Deadlines in July 2023

• Advance VAT declaration for May 2023.
• Standardized Consumption Tax for May 2023.
• Capital Gains Tax for capital gains on debt securities for May 2023.

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

Tax Deadlines in August 2023

• Advance VAT declaration for June 2023.
• Standardized Consumption Tax for June 2023.
• Capital Gains Tax for capital gains on debt securities for June 2023.

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