Austria: Advance Ruling

A taxpayer, who wishes to evaluate the liability to pay taxes with reference to a certain question of law or a fact can obtain the information needed by consulting the comments of the relevant laws or the numerous directives issued in the last years by the Federal Ministry of Finance. Already previously it was also possible to check particular complex facts with the tax authorities by asking for an advance ruling in writing. However, the advance ruling issued in writing by the tax authorities was not legally binding.

In the framework of the amendments to the tax law, the Austrian Parliament has approved a move to remedy this problem and to make a step forward towards more legal certainty. As of 2011 the taxpayers will have the right to ask the tax authorities to issue an advance ruling regarding the fiscal consequences of a fact to be implemented in the future.

According to the new situation to enter into force in 2011, the advance ruling issued by the tax authorities will be possible only with regard to questions pertaining to re-establishments of companies, group taxing and transfer pricing in cases where a ruling is particularly relevant in terms of fiscal consequences.

The request for an advance ruling submitted to the tax authorities must include an extensive presentation of the facts that should be implemented and the legal consequences deriving from this fact. If the scheduled fact, which is the subject of the request, is then implemented without essential changes, the taxpayer has the right to receive the fiscal treatment outlined in the ruling he/she has obtained.

Only in the event of changes to the consequences of the fiscal evaluation made by the tax office following a decision issued by the Administrative court, which have negative repercussions for the taxpayer, the advance ruling is not binding.

The request to obtain an advance ruling is not free of charge. The fee depends on the turnover the applicant has realized in the previous year and varies between 1,500 and 20,000 euro (in case of a turnover exceeding 38.5 million euro). Companies belonging to a group which are obliged to prepare a consolidated balance sheet, have to pay 20,000 euro irrespective of the turnover.

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