Tax-News | Business-News

Investment-related tax-free profit allowance: Eligible securities are no longer limited to mortgage bonds. For claiming 2017, investments must be carried out by December 31st.

LBG Austria - Summary: Natural entities that generate revenues from commercial activities (farming and forestry, commercial operation, self-employed work) can claim a tax-free profit allowance. For partnerships (e.g. OG, KG) the partners can claim tax-free profit allowance in the amount of their share of the profit. The tax-free profit allowance amounts to a maximum of 13% of the profit and is made up of a basic tax allowance for profits of up to EUR 30.000 and beyond that of an investment-related tax allowance (13% for an assessment base of up to EUR 175.000; 7% due on the next EUR 175.000; 4.5% on an additional EUR 230.000). From an assessment base of EUR 580.000, no tax-free allowance is available. In total, the granted tax concessions are limited to EUR 45.350 per taxpayer and year.

Which investments are eligible for claiming the investment-related tax-free profit allowance?
Eligible assets include tangible depreciable assets (the most important exceptions being cars, low-value assets, used assets) with a user life of at least 4 years and eligible securities.

As of 2017, again greater variety of eligible securities
On account of the 2014 Law on Tax Modifications (Abgabenänderungsgesetz), only mortgage bonds were granted tax concessions as securities for claiming the investment-related tax-free profit allowance. This restriction of securities to property investments was limited until 2016. Therefore all securities granted tax concessions are eligible for fiscal years from 1/1/2017 (securities that can also be used to cover personnel-related provisions pursuant to Section 14 Par. 7 Line 4 of the income tax code). Those are for example federal bonds, bank bonds, corporate bonds, option bonds, exchangeable bonds, certain investment and real estate funds as well as guarantee certificates.

Claiming the tax-benefit
The basic tax-free allowance must be entered in the tax return but will essentially be granted automatically. The investment-based tax-free allowance must be disclosed in the tax return of the respective year. The sum of the tax-free allowance, broken down by physical assets and securities granted tax concessions, is to be entered.

Contact & Advice: Our experts at LBG will be pleased to advise you in your individual situation. Please contact our consultants either directly at LBG at our 30 locations in Austria (www.lbg.at) or email us welcome@lbg.at – we will connect you with the right expert at LBG who is very familiar with your concerns.

December 12, 2017
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Existence of a domestic permanent establishment at domestic „Home Office” in Austria

LBG Austria - Summary: Where a home office is used on a continuous basis for carrying on business activities for an enterprise and it is clear from the facts and circumstances that the enterprise has required the individual to use that location to carry on the enterprise's business (e.g. by not providing an office to an employee in circumstances where the nature of the employment clearly requires an office), the home office may be considered to be at the disposal of the enterprise". (EAS-Information, Federal Ministry of Finance, Austria, 11/6/2017, BMF-010221/0333-IV/8/2017, valid from 11/6/2017)

Contact & Advice: Our experts at LBG will be pleased to advise you in your individual situation. Please contact our consultants either directly at LBG at our 30 locations in Austria (www.lbg.at) or email us welcome@lbg.at – we will connect you with the right expert at LBG who is very familiar with your concerns.

December 4, 2017
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Energy tax rebate: question whether limitation to production enterprises is legal again before the European Court of Justice – deadline for applications for 2012 is December 31 2017

LBG Austria - Summary: The limitation of the Austrian energy tax rebate to production enterprises has been subject to disputes before various courts for years already and the contentious legal question whether service providers are still entitled to the energy tax rebate after January 2011 is still unsolved. A recent judgement by the Austrian Supreme Administrative Court (VwGH) on this controversial question has been issued. Contrary to what was expected, the Supreme Administrative Court has not ruled on this issue substantively yet but referred the case to the European Court of Justice (ECJ) regarding questions on the appropriate interpretation of European Union law. Service providers who want to maintain their potential claims need to submit applications; the deadline for the year 2012 is December 31 2017.

Contact & Advice: Our experts at LBG will be pleased to advise you in your individual situation. Please contact our consultants either directly at LBG at our 30 locations in Austria (www.lbg.at) or email us welcome@lbg.at – we will connect you with the right expert at LBG who is very familiar with your concerns.

November 14, 2017
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Elimination of fees on tenancy agreements in effect since 11/11/2017

LBG Austria - Summary: The legislative amendment on the elimination of fees on tenancy agreements was announced in the Federal Law Gazette on November 10, 2017 and is therefore – in absence of any separate regulation – in effect since November 11, 2017. This means, that all written tenancy contracts signed as of November 11, 2017 are not subject to fees in connection with the contract. Lease contracts for commercial properties remain unaffected.

Contact & Advice: Our experts at LBG will be pleased to advise you in your individual situation. Please contact our consultants either directly at LBG at our 30 locations in Austria (www.lbg.at) or email us welcome@lbg.at – we will connect you with the right expert at LBG who is very familiar with your concerns.

November 14, 2017
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Unlimited or limited tax liability – when does an individual have his/her “permanent home” for tax purposes in Austria?

LBG Austria - Summary: Interests of taxable persons may vary considerably. While one especially desires the establishment of residence for tax purposes in Austria in order to be unlimited taxable in Austria, the other one tries hard to avoid exactly that, namely being taxed on his/her worldwide income in Austria. Regarding the tax allocation of income, double taxation agreements have to be taken into account. However, only the criteria in the Austrian Federal Fiscal Code (BAO) determine whether unlimited tax liability due to a “permanent home” in Austria is given. Recently the Federal Finance Court Innsbruck stated - with reference to judicial decisions of the Austrian Administrative Court - that using the “permanent home” for 2-3 month/year already qualifies for having one’s residence for tax purposes in Austria but that spending annually 14-21 days in an apartment which is furthermore usually classified not habitable is not sufficient to create unlimited tax exposure under Austrian tax law.

LBG Austria - Recommendation: The assessment oft the question whether unlimited or limited tax liability is given has great relevance regarding tax consequences on each domestic and foreign source of income, total tax burden as well as possible exit taxes or moving-in taxes. We recommend therefore a careful assessment of all assignment criteria on a case-by-case-basis in compliance with one’s overall tax interests – and a renewed assessment if circumstances change.

Contact & Advice: Our experts at LBG will be pleased to advise you in your individual situation. Please contact our consultants either directly at LBG at our 30 locations in Austria (www.lbg.at) or email us welcome@lbg.at – we will connect you with the right expert at LBG who is very familiar with your concerns.

October 25, 2017
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Private limited company: group application forms for tax year 2017 have to be signed by December 31st at the latest

LBG Austria - Summary: By establishing a tax group in accordance with the Austrian Corporation Tax Act, profits and losses of financially related corporations, such as private limited companies, can be offset. Thus the total tax burden of the tax group can be significantly reduced. To benefit from group taxation for the tax year 2017 (for groups with balance sheet date 31/12/2017) the group application forms have to be signed by all group members by December 31st 2017 at the latest and filed with the Austrian tax authorities within one month after signing.

Contact & Advice: Our experts at LBG will be pleased to advise you in your individual situation. Please contact our consultants either directly at LBG at our 30 locations in Austria (www.lbg.at) or email us welcome@lbg.at – we will connect you with the right expert at LBG who is very familiar with your concerns.

October 20, 2017
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Non-profit status of an association – profit exclusion in the statutes

LBG Austria - Summary: Once again, the Federal Finance Court (Bundesfinanzgericht – BFG) had to deal with the question, whether the formal requirements in the statutes were met for the approval of a non-profit status of an association. Indeed a hot topic for every board of a non-profit association. In the specific case the Federal Finance Court concluded that for the approval of the non-profit status it is sufficient that the statutes show clearly and unambiguously that the association does not aim for profit. The exact literal passage “The association is not aiming for profit” is not mandatory. The Federal Finance Court made clear, that formal requirements have to be taken seriously regarding taxes and duties and that they were met in that particular case. We recommend board members to carefully check their own association statutes and actual association activities with regard to non-profit requirements.

Contact & Advise: Our experts at LBG will be pleased to advise you in your individual situation. Please contact our consultants either directly at LBG at our 30 locations in Austria (www.lbg.at) or email us welcome@lbg.at – we will connect you with the right expert at LBG who is very familiar with your concerns.

October 20, 2017
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Application for reduction of income tax/corporation income tax prepayments for the current year by September 30th 2017

LBG Austria - Summary: If the actual income tax/corporate income tax on the estimated taxable income 2017 is expected to be lower than the current income tax/corporate income tax prepayments 2017, it is possible to file an application for reduction of the income tax/corporate income tax prepayments with the tax office by September 30th 2017 at the latest. However, the application has to be justified and therefore supplemented by a detailed forecast of the taxable income 2017.

Contact & Advice: Our experts at LBG will be pleased to advise you in your individual situation. Please contact our consultants either directly at LBG at our 30 locations in Austria (www.lbg.at) or email us welcome@lbg.at – we will connect you with the right expert at LBG who is very familiar with your concerns.

September 5, 2017
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The New Companies Promotion Act (Neugründungsförderungsgesetz – NeuFöG) aids business starters saving start-up costs.

LBG Austria - Summary: Business starters in Austria are – if they meet a number of requirements set forth by the so called “The New Companies Promotion Act” – exempt from certain duties and fees, such as court and stamp fees, federal administration fees, land transfer tax, payroll fringe costs etc. In order to apply for those exemptions the new business owner must not have been self-employed in the same business segment (!) within the past five years.

Contact & Advice: Our experts at LBG will be pleased to advise you in your individual situation. Please contact our consultants either directly at LBG at our 30 locations in Austria (www.lbg.at) or email us welcome@lbg.at – we will connect you with the right expert at LBG who is very familiar with your concerns.

September 5, 2017
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Don’t forget: Deadline for claiming VAT refund within the EU is September 30, 2017

LBG-Summary: Domestic entrepreneurs who source foreign goods and services may claim the input VAT if certain requirements are met. Within the EU the application for VAT refund must be sent no later than September 30 of the following 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 EUR 50.

Contact & Advice: Our experts at LBG will be pleased to advise you in your individual situation. Please contact our consultants either directly at LBG at our 30 locations in Austria (www.lbg.at) or email us welcome@lbg.at – we will connect you with the right expert at LBG who is very familiar with your concerns.

August 10, 2017
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