Tax & Legal News in English | November

Which accounting principles have to be applied on Crypto-Assets according to Austrian GAAP?

The article provides an overview of the accounting principles according to Austrian GAAP to be applied on crypto-assets, especially coins. Coins acquired through purchase have to be capitalized with the acquisition costs. According to the general accounting principles they are classified as fixed assets in case of long-term use and as current assets in case of short-term use.  Coins obtained through mining can only be capitalized if they are qualified as current assets.  As, there are no specific regulations for the accounting of crypto-assets in place it is in certain cases recommended to extend the balance sheet items laid down in Austrian GAAP to provide for the true and fair view.

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Administrative High Court rules again over Austrian real estate transfer tax cases. 

The Administrate High Court has recently issued two rulings which both concerned the Austrian Real Estate Transfer Tax (RETT). In the first decision, the main question was whether RETT could be triggered at the level of an Austrian limited partnership. In the second decision, the Court had to rule upon the applicable RETT base for the transfer of building rights. 

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EU Commission publishes Proposal regarding Transfer Pricing

The EU Transfer Pricing Directive applies to all taxpayers that are registered in, or subject to, tax in one or more Member States, including permanent establishments in one or more Member States. Subject to the approval of the Council of the European Union, it is to be implemented until 31 December 2025. It ensures that the arm’s-length principle and its interpretation in the OECD Transfer Pricing Guidelines become part of the legislation of all EU Member States. The objectives of the Directive are to reduce administrative costs for companies operating in the EU by implementing a common approach for the application and interpretation of the transfer pricing rules within the EU, as well as procedures and a common framework for adjustments to avoid double taxation.

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Leases Under Scrutiny

Given the current economic conditions, value protection clauses have gained substantial significance. Recent judgments by the Austrian Supreme Court (OGH) demonstrate a shift in perspective. While in 2019, the OGH supported the validity of these clauses in rental agreements, they now take a more critical view on the validity of such clauses. Such clauses must comply with the requirements of the Consumer Protection Act (KSchG), which are intended to protect consumers from unexpected price increases, as well as withstand a declaration of invalidity review.

In essence, these decisions risk rendering value protection clauses in leases invalid, possibly retroactively. However, clarity and precision in their formulation are crucial to meet transparency requirements. It's important to note that the Consumer Protection Act only applies to business-consumer relations and not to individuals leasing out private apartments, or to contracts between untertakings.

It is, especially regarding lease agreements with consumers, recommended to take a look at the indexation clauses of lease agreements, and have them revised, in order safeguard that the clauses comply with the requirements under the new OGH decisions.

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(Tax) liabilities for business acquisitions

When acquiring a business, the acquirer is liable for certain outstanding taxes and duties of the business (particularly VAT, wage tax, social security, municipal tax, etc) of the legal predecessor. Liabilities could apply when transferring the ownership of a company or a viable (partial) business. However, there may be some limitations to the acquirer’s liability whether in terms of reason or height. The following article is intended to provide a quick overview of the content of possible liability elements when acquiring a business.

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Vienna is building with sustainability in mind: The Building Code Amendment 2023

The issue of sustainability has gained considerable importance in recent years. This is due not least to the circumstances of climate change. Sustainability has now become a central concern of our society. Its increasing relevance is evident at the national level, such as in the amendment to the building code. The primary objectives of this amendment are diverse. These include preventing inappropriate use of housing, extending protection to historic buildings and implementing measures to decarbonize and renovate buildings. Other priorities are the promotion of green spaces, the regulation of the parking space obligation and the creation of facilitations for photovoltaic installations. Moreover, the provisions regarding shopping centers have been restricted. The amendment also aims to promote the use of bicycles and electromobility and to improve the quality of drinking water. On 23 November 2023, the Vienna state parliament passed far-reaching and, in some cases, fundamental changes to the Vienna Building Code. It will be excited to see how this is implemented in practice. 

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Fundraising Costs: Overview and Austrian tax implications

The question of the tax treatment of ancillary borrowing costs has increasingly arisen in Austrian M&A transactions. This article is intended to provide an overview of the content and background of the legal provisions and the tax implications on which they are based. In this context, it should be mentioned that in practice it is often difficult to make a concrete distinction between the terms "ancillary borrowing costs” and “interest expenses". In most cases, the tax deductibility of such costs has to be reviewed on a case-by-case basis.

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Tax Deadlines in December 2023

• Intrastat-declaration for November 2023.
• Advance VAT declaration for October 2023.
• Standardized Consumption Tax for October 2023.

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