Tax-News | Business-News

Double taxation agreement between Austria and France: Observe withholding tax obligation for foreign lecturers

LBG Austria - Summary: If a natural person resident in France for tax purposes offers courses in the field of adult education on a self-employed basis and if he or she also carries out this lecturing activity in Austria for a short period, this one-time temporary rental of premises in Austria for a period of 50 days does not constitute a fixed establishment regarding article 14 of the double taxation agreement between Austria and France. Accordingly, Austria is not entitled to taxation of the income generated in the course of the lecturing activities. However, there is a limited tax liability for the lecturer in Austria, resulting in the obligation of the client (course participant) to pay withholding tax. The tax is thus withheld or deducted from the income due to the recipient. Read article

Application for reduction of income tax/ corporate income tax prepayments 2019 by September 30th 2019

LBG Austria - Summary: If the actual income tax/corporate income tax on the estimated taxable income 2019 is expected to be lower than the current income tax/corporate income tax prepayments 2019, it is possible to file an application for reduction on the income tax/corporate income tax prepayments with the tax office by September 30th 2019 at the latest. However, the application has to be justified and therefore supplemented by a detailed forecast of the taxable income 2019.

August 29, 2019
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Amendment to the Double Taxation Agreement (DTA): Republic of Austria | Russian Federation

LBG Austria - Summary: With effect from 2020, the existing double taxation agreement (DTA) Austria - Russian Federation will be adapted to the OECD Model Convention and amended as follows:

In order to apply a reduced withholding tax rate on dividends, in addition to the minimum holding requirement, the holding must currently exceed $ 100.000 (or its equivalent in other currencies). This requirement will no longer apply.

With regard to capital gains, a real estate clause will in future be included in such a way that the State in which the property is situated has the right of taxation.

Furthermore, the regulations on the exchange of information will be adapted to the new international standard for transparency and administrative assistance in tax matters and a mutual administrative assistance provision will be introduced.

Taxpayers of both countries are advised to consider these changes in their tax planning in a timely manner.

August 29, 2019
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Don’t forget: Deadline for claiming VAT refund within the EU is September 30, 2019

LBG Austria - Summary: Domestic entrepreneurs who acquire foreign goods and services may claim the incurred VAT if certain requirements are met. Within the EU the application for VAT refund must be filed no later than September 30 of the following year (for third countries, the 30th of June of the following year). The application for VAT refund from EU Member States for the year 2018 must therefore be submitted no later than September 30, 2019 in the country of residence of the entrepreneur. This deadline is a so-called expiry period which means that any request that has not been received in full by the deadline will be rejected thereafter.

The refund period can’t be greater than one calendar year (i.e. January 1st to December 31st) and it can’t be less than three calendar months except in circumstances where the application is in relation to the last quarter of the year.

The amount to be refunded must at least be € 400. This does not apply if the refund period is the calendar year or the last period of a calendar year. For these refund periods the amount to be refunded must be at least € 50.

August 9, 2019
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Intra-Community deliveries | Triangular transactions: VAT "Quick Fixes" come into effect on January 1st 2020 – take early action!

LBG Austria - Summary: The European Commission is planning far-reaching VAT reforms to reduce tax losses and fraud, administrative burden and complexity in taxation. In preparation for this, so-called "quick fixes" were decided as the first stage of the reform, with important changes coming into effect on January 1st 2020.

Tightening of tax exemption of intra-Community supplies
As of January 1st 2020, the existence of a valid UID number of the purchaser and the correct inclusion of the intra-Community delivery in the summary notification (ZM) by the supplier are substantive requirements for the tax exemption of intra-Community deliveries. The supplier can only treat the delivery to another EU country as tax-exempt if the acquirer of an asset communicates to the supplier his valid UID number, which comes from an EU member state other than that in which the transport / dispatch of the goods is carried out. In addition, the submission of a correct summary notification (ZM) by the supplier is a precondition for the tax exemption.
br> In order to benefit from the tax exemption for intra-Community supplies, the supplier must also prove that the goods actually reached the rest of the Community (so-called documentary evidence).

Simplification of series transactions
The criteria for determining the taxable place of deliveries within a so-called series transaction should be standardized throughout the EU. In the case of a series transaction, several deliveries are consecutively made in succession by three or more parties, with the goods physically coming directly from the first operator in the row to the last customer. In such a series, the movement of goods can only be assigned to one delivery ("moving delivery") and only this delivery can be tax-exempt as intra-Community delivery. All other deliveries in the series are normally taxable as "dormant delivery" either in the country of departure or destination. The quick fixes now contain a rule determining a uniform assignment of the “moving delivery”.

Timely planning and preparation necessary
In order to be able to handle your business smoothly in the future as well, we recommend that you check the company-internal processes, especially the UIDs of your suppliers, with regard to the changes that apply from January 1st 2020 and adapt them if necessary. Furthermore, cross-border deliveries should be examined whether there are series transactions or whether the new developments mentioned necessitate any adjustments in accounting / accounting.

July 17, 2019
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Tax evasion: Anyone participating or assisting can be punished!

LBG Austria - Summary: A recent finding of the Federal fiscal court shows clearly: anyone who supports a perpetrator in tax evasion or determines or contributes to committing a tax evasion, becomes a perpetrator himself and can also be punished according to his own fault. This does not only concern entrepreneurs, managing directors, shareholders, family members or consultants, but e.g. also employees who let themselves be "harnessed" - as the Federal Finance Court (Bundesfinanzgericht) has determined in an actual case.

Be careful! Every perpetrator, no matter whether immediate perpetrator or contributor, meets the same punitive threat, which means, everyone is responsible for their own wrong respectively their own fault and will be punished accordingly! Under certain circumstances, however, there is the possibility of averting a penalty. It therefore makes sense to think in a timely manner about a correctly reimbursed voluntary declaration if a "rehabilitation of the past" is required.

A voluntary declaration must meet special formal requirements and for a correct submission much experience is needed. We therefore recommend seeking comprehensive advice.

Contact & Advice: This information naturally shows basic aspects of the topic - for completeness and correctness no guarantee can be given despite careful preparation. LBG will gladly advise you in your individual situation. Please contact one of our 31 Austria-wide locations (www.lbg.at) or welcome@lbg.at - we will gladly bring you together with one of our experts, who is very familiar with your request.

July 1, 2019
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Tax reform 2020/23: Corporate tax rate will be reduced in stages from 25% to 21%

LBG Austria - Summary: The Austrian federal government plans to cut the corporate tax rate in two stages from 25% to 21%. In fact, corporation tax is to be reduced to 23% from 2022 and 21% from 2023 onwards. The minimum corporation tax remains unchanged. Withholding tax on the distribution of dividends remains unchanged at 27.5%. The corporation tax affects in particular legal forms such as the limited liability company, public limited company, cooperatives, municipalities, monasteries, associations and private foundations. Since tax changes are also planned for sole proprietorships and partnerships, it makes sense to proactively put the current legal form once again to the test, also out of tax considerations.

Contact & Advice: This information naturally shows basic aspects of the topic - for completeness and correctness no guarantee can be given despite careful preparation. LBG will gladly advise you in your individual situation. Please contact one of our 31 Austria-wide locations (www.lbg.at) or welcome@lbg.at - we will gladly bring you together with one of our experts, who is very familiar with your request.

May 1, 2019
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Tax reform 2020/23: compulsory assessment of limited taxable persons in two employment relationships

LBG Austria - Summary: Limited taxable persons who have two employment relationships in Austria are not subject to compulsory assessment, unlike unlimited taxable persons. As a result, such persons fall into a lower progression level, because the sum of both salaries is not added to calculate the tax. In order to eliminate this unevenness of taxation, for persons with limited tax liability from 2022 a compulsory assessment is to be introduced in the case of two employment relationships.

Contact & Advice: This information naturally shows basic aspects of the topic - for completeness and correctness no guarantee can be given despite careful preparation. LBG will gladly advise you in your individual situation. Please contact one of our 31 Austria-wide locations (www.lbg.at) or welcome@lbg.at - we will gladly bring you together with one of our experts, who is very familiar with your request.

May 1, 2019
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Tax reform 2020/23: Revised income tax law

LBG Austria - Summary: The Austrian Federal Government plans to fundamentally reform and redraft the income tax law currently in force since 1988. Important topics in this are a possible new regulation of the taxable profit determination for partnerships (e.g. OG, KG, GmbH & Co KG) and their partners including the topic "special tax assets" as well as once again a start to the so-called "Einheitsbilanz – standard balance sheet", namely a regulatory merger of corporate law and tax regulations. The entry into force is scheduled for 2021. We recommend dealing early with this topic for the purpose of optimal choice of legal form and forward-looking tax planning.

Contact & Advice: This information naturally shows basic aspects of the topic - for completeness and correctness no guarantee can be given despite careful preparation. LBG will gladly advise you in your individual situation. Please contact one of our 31 Austria-wide locations (www.lbg.at) or welcome@lbg.at - we will gladly bring you together with one of our experts, who is very familiar with your request.

May 1, 2019
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Optimal tax planning when selling your company respectively terminating your business activity – especially in the case of existing business premises and land

LBG Austria - Summary: In the context of the taxation of the sale of a business respectively the termination of a business the property gains tax of 30% on buildings and/or land and ground that are sold respectively transferred to private assets may be reduced to half of the average income tax rate (up to 27,5% when in the highest income tax rate of 55%) – however, certain requirements need to be met.

Requirements:
• the business for sale has existed for at least seven years
• the selling entrepreneur has completed its 60th year
• the selling entrepreneur quits its business activity or became incapacitated for work

The use of the tax advantage in connection with the use of half the average income tax rate (also for land) is usually the cheapest tax variant when selling or abandonment of a business. Therefore, in the run-up to a company sale or business termination, a restructuring of a limited liability company into a sole proprietorship or partnership should be considered in order to ensure optimal taxation. In any case, we recommend a timely and forward-looking planning when thinking about selling your company respectively quitting your business activity.

Contact & Advice: This information naturally shows basic aspects of the topic - for completeness and correctness no guarantee can be given despite careful preparation. LBG will gladly advise you in your individual situation. Please contact one of our 31 Austria-wide locations (www.lbg.at) or welcome@lbg.at - we will gladly bring you together with one of our experts, who is very familiar with your request.

April 17, 2019
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