Tax & Legal News in English | January

NIS 2 and its impacts, also on data protection

The Cybersecurity Directive NIS-2 (Network and Information Security), which came into force at the beginning of this year and which must be transposed into national law by mid-October 2024, aims to standardise the level of security within the EU, strengthen resilience and improve the response to security incidents. This will affect more than 3,000 companies in Austria. Among other things, they must implement measures relating to security and risk concepts, incident and crisis management, supply chain security, training, encryption, access control, authentication and emergency communication, and provide early warnings and detailed reports within a short period of time in the event of serious security incidents. Management bodies are responsible for monitoring the full implementation of security measures in accordance with NIS 2 and are personally liable in the event of breaches. Furthermore, violations can result in fines for companies of up to ten million euros or two per cent of the previous year's global turnover.

The direct impact on companies' data protection requirements primarily concerns the technical and organisational data security measures to be implemented in accordance with the GDPR. The new NIS-2 minimum security standards will at least serve as a guideline in practice. A cyberattack will often also constitute a personal data breach. Hence, in addition to the NIS-2 reporting obligation, a report must generally also be submitted to the data protection authority and possibly also to the data subjects. In this context, the degree of GDPR implementation should be critically reviewed and, if necessary, improved. 

For contact details and more information in German click here...

Tax Appeals Court: Anti-abuse  provisions and tax loss deduction

A corporation loses the right to carry forward losses if in course of a share deal the main organizational, economic and financial structural characteristics of the corporation significantly change. In the present case, the Tax Appeals Court ruled that no significant change in the shareholder and economic structure had taken place and thus the corporation did not lose the right of loss deduction in the amount of approx. EUR 400.000. However, as the competent tax office filed an appeal with the Administrative High Court the final decision remains to be seen. 

For contact details and more information in German click here...

Leasing or renting by a legal entity under public law

The leasing or renting of real estate by a legal entity under public law may entitle it to claim input tax deduction within the scope of its commercial operations or in its capacity as a fictional entrepreneur. The concept of a fictional entrepreneur does not depend on whether the leasing and renting serves economic purposes. Instead, it depends on whether the leasing and renting constitutes a lease agreement under civil law. The defining characteristic of a lease agreement is remuneration. For this purpose, the Federal Ministry of Finance mandates a rental fee compromising at least operating costs and an additional charge for the use of the property, calculated at a rate of 1.5 % of acquisition or production costs (so-called minimum rent). In its recent decision, the Administrative High Court contradicted the Ministry’s view: According to the consistent case law of the Austrian Supreme Court , a remuneration cannot be presumed solely based on compensation for depreciation and costs. The contract can only be considered a remunerated lease agreement if the rent amounts to at least 10 % of the local market rent.

For contact details and more information in German click here...

Introduction of a new regulation regarding the submission obligations

On 12 December 2023, a new regulation ("Quotenregelungsverordnung - QuRV") was published, which specifies the legal provisions regarding the submission obligations (“Quotenregelung”) of tax returns by tax representatives (tax advisors, auditors, notaries, lawyers). The new system covers income, VAT and corporation tax returns as well as tax returns for the assessment of income (whereby special regulations apply in some cases with regard to business income). In addition, the regulation was recently extended to tax returns regarding motor vehicle tax (“Kraftfahrzeugsteuer”), electricity tax (“Elektrizitätsabgabe”), natural gas tax (“Erdgasabgabe”) and coal tax (“Kohleabgabe”). Tax returns on the declaration of income from employment that is subject to wage tax deduction do not constitute under the new system.

The QuRV itself defines how to register and deregister for the new system; the percentage submission of tax returns and their submission deadlines as well as consequences if the submission deadlines are not met.

Both the QuRV as well as the “Quotenregelung” came into force on 1 January 2024 and will be applicable for the above-mentioned tax returns from 2023 onwards. 

For contact details and more information in German click here...

Double taxation treaty with Russia: Suspension also from the Austrian side

On 8 August 2023, the Russian government unilaterally suspended the double taxation treaties with over thirty states via verbale note. Among these treaties was also the double taxation treaty between Austria and Russia. Four months later, on 6 December 2023, the Austrian federal government reacted by announcing  that the treaty has now also been partially suspended by Austria. As a result of the suspension, both states are free to tax according to their national law. In many cases this might lead to double taxation. 

For contact details and more information in German click here...

Energy Cost Subsidy for NPOs (EKZ-NPO): Apply Now!

As a counterpart to the existing Energy Cost Subsidies, the Energy Cost Subsidy for Non-Profit Organizations serves as a support measure to mitigate the incurred increases in energy costs within the non-profit sector. Applications for the first period can be submitted until 30 June 2024. Given the limited budgetary resources, a prompt application is highly recommended.

For contact details and more information in German click here...

European Commission Adopts Positive Revisions to De Minimis Regulation

The European Commission has adopted the regulations amending the general rules for small amounts of state aid (de minimis Regulation), which bring some positive changes for applicants. The revised regulations, which exempt small aid amounts from EU State aid control as they are deemed to have no impact on competition and trade in the internal market, entered into force on 1 January 2024 and will apply until 31 December 2030. The amendments adopted include the increase in the ceiling per company from EUR 200,000 to EUR 300,000 over three years, to cater for inflation. In addition, the adopted de minimis Regulation introduces a central register that makes it much easier to monitor the maximum ceiling per company, thereby reducing the reporting obligations for companies. At the same time, the revised regulations ensure that competition in the internal market is not affected by distortions. All these changes make it easier and faster to grant small amounts of aid.

For contact details and more information in German click here...

INSTANT PAYMENT REGULATION

The EU is planning to amend the SEPA regulation in order to increase the popularity of instant payments. Currently, these instant payments are restricted due to high fees and limited availability. The proposed changes aim to ensure that instant Euro transfers are widely accessible, affordable and trustworthy. Implementation will be staggered, with deadlines (12 months upon effective date) for payment service providers in the Euro area and longer transition periods for those outside the Euro area. Penalties, including at least 10 % of net turnover, are planned to ensure compliance. The changes are intended to strengthen strategic autonomy and promote innovative payment services but require considerable effort to implement.

For contact details and more information in German click here...

Tax Deadlines in February 2024

• Advance VAT declaration for December 2023 or the fourth quarter 2023.
• Standardized Consumption Tax for December 2023.
• Capital Gains Tax for capital gains on debt securities for December 2023.

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