Tax & Legal News in English | September

Public CbCR – Romania – reporting obligations for Austrian firms

While most countries have decided to implement the Public CbCR from the beginning of the first financial year starting on or after 22 June 2024, in Romania the regulations already apply to financial years starting on or after 1 January 2023. However, the Romanian Ministry of Finance issued an ordinance (1730/2023), which clarifies that groups of companies headquartered in EU and EEA countries must publish Public CbCRs in compliance with the laws of the country of residence of the parent company and not according to Romania's publication obligations. Therefore, only Romanian groups of companies and Romanian companies whose ultimate parent company is domiciled in a third country must already publish a Public CbCR for financial years starting on or after 1 January 2023.

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Update of the income tax guidelines – Highlight overview

On 31 March 2023, the Austrian Ministry of Finance published an update of the income tax guidelines for 2023. This update contains a variety of clarifications regarding the implementation of the investment allowance, the differentiation between paid and gratuitous transactions, cryptocurrencies and attribution of dividends, exemption with progression rule, the lump sum regulation for small businesses and the deductibility of tickets for mass transportation.

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Clarification regarding non-assessment in case of share exchange

In case of a share exchange regarding the contribution of a capital share not belonging to an Austrian business asset, the Reorganization Tax Act provides for the non-assessment of a possible tax liability (eg, due to profit realization) upon application. In this case, the tax is only assessed upon the actual sale, other withdrawal or tax-neutral disposal of the share granted to the contributor. Decreases in the value of the capital share that occurred between the contribution and the event causing the assessment need to be considered. However, it was questionable whether this concerns value decreases of the contributed assets, or the share granted to the contributor. The Austrian Federal Ministry of Finance now clarified that only value decreases of the contributed assets can be considered. By contrast, value decreases regarding the share granted to the contributor are not relevant.

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Social security responsibility in cases of transnational telework

Basically, within the EU, the country of residence is responsible for social security if a substantial part, namely 25 %, of the work is carried out in the country of residence. During the Covid-19 pandemic, simplified coordination regulations for social security responsibility applied within the EU, the EEA and Switzerland, according to which employees could work in a member state without triggering a social security obligation in that member state. This special regulation ended on 30. July 2023. Due to the expiry of the pandemic-related special regulation, the EU worked on a pan-European solution. A general reinterpretation of the scope of telework in the case of transnational telework was developed, which was introduced with the “Multilateral Framework Agreement on Cross-Border Telework”. This states, that the telework-part in the state of residence can amount up to 49.99 %, without the obligation of transferring the responsibility for social security from the employer country to the country of residence. It should be noted that the cross-border telework of the employee in the country of residence has to be usually recurring and that information technology has to be used. Furthermore, the regulation only applies if both Member States concerned have signed the framework agreement. Austria has already signed the framework agreement and that it has been applicable since 1. July 2023.

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ESG & Transfer Pricing: Does your transfer pricing model reflect the sustainability strategy?

Companies are increasingly focusing on ESG and sustainability issues and related reporting requirements are in the spotlight. But what impact does this have on a company's transfer pricing model? Measures to implement ESG goals often affect the entire value chain of companies, so they are also relevant for transfer pricing in intercompany transactions under the arm's length principle. We show examples of how sustainability initiatives can affect a group's transfer pricing model.

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Transfer of interest and EBITDA carryforwards in reorganizations

Basically, the transfer of interest and EBITDA carryforwards in the course of reorganizations follows the existing rules on the transfer of tax loss carryforwards. In the context of reorganizations, the object linkage of assets, which directly cause interest and EBITDA carryforwards, is the deciding factor. Separate rules are applicable in case of the concurrent existence of both interest and EBITDA carryforwards as well as for reorganizations within groups of companies.

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Tax Deadlines in October 2023

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

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