Business News: Austria

The amendment to the Accounting Law establishes that starting in 2010 the threshold for the application of the accounting rules contained in the Entrepreneurial Law is increased from 400,000 to 700,000 euro per accounting year. When this threshold is reached, a company has to adopt the double entry bookkeeping method including an inventory and a balance sheet.
If the new threshold is exceeded in two consecutive years, the obligation to keep accounting records enters into force from the second accounting year following the accounting year when the threshold was exceeded. If turnover amounts to more than one million euro a year, the obligation to keep accounting records arises in the following accounting year.
This situation will occur already in 2010 if the entrepreneur previously was not subject to the obligation to keep accounting records, but has realized in 2009 turnovers above one million euro. If, however, he/she has already been subject to the obligation to keep accounting records, but in 2008 and in 2009 turnover has remained below the threshold of 700,000 euro, this obligation is not applying from 2010 on.
Limited private companies and private partnerships carrying out entrepreneurial activities, that do not have a natural person as a partner with unlimited liability, continue to be subject to the obligation to keep accounting records regardless of their turnover.
As of 2010, companies subject to the obligation to keep accounting records have lost the right to enter start-up and expansion costs on the assets side of the balance sheet or to claim accelerated depreciation of the circulating capital. It will, however, be possible to enter on the assets side of the balance sheet goodwill acquired with costs and its depreciation spread over the period of its duration.
Entrepreneurs who, pursuant to the amendment to the law are not subject to the obligation to keep accounting records, have to be aware of the fact that also in case of the voluntary keeping of accounting records, hidden reserves which are part of the capital equipment  have to be disclosed and are therefore subject to taxation. At the same time it would not be possible to have an accounting year different from the calendar year.
In order to avoid such situations a request can be filed asking for the permission to continue to use the method of profits assessment according art. 15 of the Income Tax Law. Alternatively it is possible to file a request to postpone taxation of the hidden reserves included in land but on the condition that the land is part of the necessary capital equipment of the company.

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