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Austria: Miscellaneous

VAT. At the end of May the Austrian Parliament approved a law making amendments to the tax law. In the course of the debates two changes were introduced that were not considered in the proposals presented by the Ministry or in a draft law.

In article 21 paragraph 2 of the VAT Law (turnover in the previous accounting year) the threshold regarding the quarterly filing of the provisional VAT return has been increased from 30,000 to 100,000 euro. Pursuant to this amendment, taxpayers who have achieved a turnover between 30,000 and 100,000 euro in the previous year, have to file their VAT return only on a quarterly basis and not every month.

At the same time paragraph 6 of article 21 increases the threshold up to which small companies, which are not liable to pay taxes, are exempt from the duty to file an annual VAT return from 7,500 to 30,000 euro.

Ruling by the European Court of Justice. In principle an intracomunitary purchase is deemed to have taken place in the member country, in which an object is located at the end of the shipping or the transport to the buyer. If the buyer does not have a VAT number of the country, in which the delivery ends, a further fiscal debt arises. If the buyer proves that he/she has declared the purchase regularly in the country, in which shipping ends, the supplementary fiscal debt expires.

With regard to the problem if such a supplementary fiscal debt entitles a buyer to claim input tax, the European Court of Justice has ruled that there is no such right. If no prove is given that the purchase has been taxed in the country of origin of the beneficiary, it is not possible to correct the supplementary fiscal debt.

Allowance on profits. In future all persons doing cash-based accounting or compiling balance sheets will be entitled to claim the new allowance on profits. Single proprietors and partnerships will be able to apply for the allowance while corporations will be excluded.

The new allowance on profits has been increased from10% to 13% of the annual profit but, as previously, will be limited to a total of 100,000 euro. E basic allowance of a maximum of 3,900 euro (13% of the profits up to 30,000 euro) not linked to investments will be granted. If the profits exceed 30,000 euro in this framework, a further allowance up to the limit can be granted but it has to be covered by the purchase of new goods subject to depreciation which have to remain in the company for a period of at least one year.


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.