Tax & Legal News in English | May

EU regulation on deforestation-free supply chains

In order to protect the world's forests and combat deforestation and forest degradation, the European Union has adopted an ambitious new regulation: “EU Regulation on the making available on the Union market and export from the Union of certain commodities and products associated with deforestation and forest degradation”. With the introduction of this regulation, the import, supply and export of certain goods such as palm oil, beef, soy, coffee and wood is prohibited unless the importer/trader or exporter can prove that the products have been produced without deforestation.

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Current case law of the High Administrative Court on the calculation of the chamber contribution for VAT groups

Calculation must be made separately at the level of each individual company in the VAT group

In the case of VAT groups, the controlling company and all controlled companies must each check whether their activities (wholly or partially) establish membership to the Austrian Federal Economic Chamber and whether they are subject to the obligation to calculate and pay chamber contribution. Consequently, the controlling company and / or the respective controlled companies must check which calculation rule applies to them with regard to their activities subject to the chamber contribution.

If the chamber contribution has not yet been calculated in accordance with the legal opinion expressed by the High Administrative Court, it might be necessary to submit a correction for the past years that are not already statue-barred, which must be examined on a case-by-case basis. It should be noted that intercompany sales within the VAT group are still non-taxable and therefore do not have an influence on the calculation basis for the chamber contribution.

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High Administrative Court on the reinstatement of a missed deadline

In case a tax-related deadline (e.g. the deadline for filing an appeal) is missed, the resulting legal disadvantage may be avoided by filing a request for reinstating the missed deadline according to Sec 308 Federal Fiscal Code. One of the prerequisites for such reinstatement is that the party is not at fault beyond a minor degree for missing the deadline. This can typically be demonstrated by the establishment and adherence to the requirements of an internal deadline monitoring system.

However, if the monitoring system is deficient or if the regulated organizational procedure is not followed in a particular case, this does not per se preclude the possibility of reinstatement, provided that particularly careful action is taken. Especially in the case of a breach of the established organizational procedure (which might be unavoidable in individual cases) or in the case of a situation not covered by the monitoring system, it is advisable to exercise special care and to document this accordingly.

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FMA is easing the restrictions on real estate loans

The KIM Regulation defines the conditions under which banks may grant their customers loans for the purpose of buying residential property. These conditions are to be eased in future in order to facilitate access to real estate loans for private home buyers.

The main content of the regulation issued by the FMA and in force since August 2022: maximum loan-to-value ratio of 90 %, repayment rate of up to 40 % of the monthly disposable net household income and the maximum term of the loan may not exceed 35 years. However, the banks have various exception contingents at their disposal, depending on the size of the bank in question. And this is exactly where there will now be changes. In future, the banks' exemption quota will be a standardised 20 % and the process of granting the exemption will be simplified for the banks. The previously mandatory compliance with further key indicator-specific sub-quotas will no longer apply.

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EU Public CbCR: draft legislation published in Austria

While most countries have already implemented the “Public CbCR” directive at this point in time, Austria has finally published draft legislation regarding the implementation into national law. The draft represents the regulations stipulated under the directive without major deviations. Based on the draft legislation, an Austrian ultimate parent company of a multinational group, exceeding a consolidated group revenue of EUR 750m in the two preceding years, has to publish a “Public CbCR”. The Public CbCR has to be filed with the responsible company register court and published on the website of the filing entity. In case of non-compliance sanctions of up to EUR 100k may be imposed on the entity and the legal representatives of said entity.

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Amendment of the Austrian-China double tax treaty

On 14 September 2023 Austria and China have agreed to amend their double tax treaty. The initial double tax treaty dates from 1991 and, therefore, no longer met the current international OECD standards. With the newly concluded protocol various articles of the double tax treaty will be amended, including inter alia changes to the dividend and interest article as well as the abolition of the matching credit under the method article. It is expected that the amended double tax treaty will be applicable to income derived after 1 January 2025.

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Requirements for digital archiving

With the digitization digital archiving of bookkeeping documents gains traction. Electronic data storage can be used for keeping books and records, insofar as the reproduction of the same content, in full and in an orderly manner, is always guaranteed until the expiry of the statutory retention period. Besides a respective document management software, organizational measures must be put in place to secure that the electronic stored records cannot be amended without proper documentation. Please find here more information on digital archiving in case of outsourcing.

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Draft of the Fraud Prevention Act 2024 – Financial Criminal Law Aspects

On May 7, 2024, the two-part draft of the Fraud Prevention Act 2024 was published. Part I specifically addresses financial criminal law aspects. These notably include an expansion of the scope of Sec 30a Fiscal Penal Code, which enables the tax authorities to refrain from initiating a financial criminal procedure and instead to assess a 10% increase on the amount of underpaid tax in certain cases.  The draft also provides for a new criminal offense to sanction the creation and use of fake invoices. Part II of the draft foresees measures to combat social fraud. The further legislative process needs to be awaited.

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On 17.6.2024 the following declarations/payments are due:

• Advance VAT declaration for April 2024.
• Standardized Consumption Tax for April 2024.
• Capital Gains Tax for capital gains on debt securities for April 2024.

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