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VAT: Exercise important VAT-related options at the beginning of the year in time
LBG Austria - Summary: If an entrepreneur wants to switch from actual taxation to imputed taxation or wants to voluntarily file monthly preliminary VAT returns or wants to return to small business exemption regulation it is necessary to pay attention to the corresponding deadlines for application.

Switch from actual taxation to imputed taxation:
As a rule, tax liability takes effect in the month in which deliveries or services are provided (imputed taxation) or, in the case of taxation according to monies received (actual taxation), per the end of the calendar month in which they were earned. In Austria, entrepreneurs who work freelance (such as lawyers) or entrepreneurs not obligated to keep books of account, may apply for imputed taxation instead of actual taxation. The application therefore must be filed no later than the deadline for filing the first preliminary VAT return, as a rule therefore with the January preliminary VAT return by March 15 at the latest.

Voluntary monthly preliminary VAT return:
Entrepreneurs with sales exceeding € 100.000 in the preceding calendar year are obligated to file their preliminary VAT returns monthly. If sales are between € 30.000 and € 100.000 preliminary VAT returns generally need to be filed quarterly. In that case, however, entrepreneurs may voluntarily opt for monthly preliminary VAT returns. In order to opt for this choice it is necessary to submit the preliminary VAT return for the first calendar month of a taxable period on time, as a rule therefore by March 15.

Return to small business exemption regulation
Small business owners are entrepreneurs who operate their business in Austria (are resident or domiciled in Austria up until 31 December 2016) and who do not exceed a turnover limit of € 30.000 annually. They do not have to pay any sales tax on their income to the fiscal authorities; on the other hand they may not deduct input tax from expenses. If small business owners want to switch from being exempt from sales tax to sales tax liability they can waive it (option declaration). This waiver is binding for at least five years. In order to return to the small business exemption regulation the withdrawal must be declared no later than the end of the first calendar month. Otherwise sales remain subject to VAT.

We recommend prior to making one of the choices described above to compare the options in terms of profitability and liquidity.

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.

January 2, 2018
Wage dumping - avoid risks: from wrong classification in collective agreement to deductions for employee contributions
LBG Austria - Summary: On January 1st 2017 the “Anti-Wage and Social Dumping Act” (LSD-BG) came into effect in Austria as a standalone act (previously it was included in the Labour Contract Adaptation Act, AVRAG). Wage dumping does not only refer to the act of offering (on purpose) excessively low wages, in fact there are several pitfalls lurking in daily payroll accounting practice that may lead to violations of law and significant penalties for entrepreneurs, managers, board members. A careful and competent check may prevent from unintended consequences.

Special attention should be paid to those fields of daily payroll accounting: wrong classification of employment (contract for work, service contract, free service contract), wrong or no classification in collective agreement, wrong or no collective wage increase, unpaid or insufficient paid additional hours/overtime, accounting errors in all-inclusive overtime arrangements, no or insufficient working time records, late payments etc.

We support you in planning and implementing the right measures and take a competent expert-look at your employments.

Contact & Advise: Our experts in the consulting field “payroll accounting, income tax, social security, labour law” 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.

January 2, 2018
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 & 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.

December 12, 2017
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 & 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.

December 4, 2017
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 & 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.

November 14, 2017
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 & 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.

November 14, 2017
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 & 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 25, 2017
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 & 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
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
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 & 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.

September 5, 2017
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 & 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.

September 5, 2017
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 & 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.

August 10, 2017
Tax Treatment of cryptocurrencies (= virtual currencies: e.g. bitcoins)
LBG-Summary: The Austrian Federal Ministry of Finance has just announced its legal opinion on the treatment of income tax and turnover tax of a business activity in connection with cryptocurrencies in Austria, depending on whether these are held in the company’s assets or in private assets. Cryptocurrencies are currently not recognized as an official currency in Austria.

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.

August 10, 2017
Employment bonus for new jobs – application as of July 1st 2017 - consider 30-day application period and requisite evidence
LBG-Summary: Starting on July 1st 2017, companies are entitled to apply for a refund of 50% of non-wage labor costs (e.g. employer social security contribution) for each newly created job over a period of up to three years. The funding is accessible to companies regardless of their size or the business sector in which they operate provided that their headquarters or permanent establishment is located in Austria. The public financing bank Austria Wirtschaftsservice (aws) is responsible for handling the application and granting of funding. You can find all details to "employment bonus" in our LBG information from 26/07/2017: Employment bonus from 01.07.2017.

Practical hints:
◾ Eligibility: Each additional employee must be "eligible". We recommend obtaining an electronic data extract from the social insurance carrier.
◾ Data Protection: A "declaration of consent" from each employee eligible for funding must be submitted for the transfer of personal data to the "aws". We recommend to include this "declaration of consent" already in the contract of employment.
◾ Confirmation by tax consultants or auditors: The funding guidelines stipulate that a tax consultant or auditor must confirm specific eligibility criteria in the "funding application" as well as in the subsequent "later registration of further employees" and specific criteria for the twelve-month later following "funding account". It is not merely a "formal rule", but a carefully performed and documented expert performance. Thus the legislature shifts the responsibility for the correctness of the information in the "funding application" and the associated professional work to the entrepreneur as well as to the confirming tax consultant or auditor and would like to protect himself against abusive funding applications.

Contact & Advise: Our experts in the consulting field “payroll accounting, income tax, social security, labour law” 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.

July 27, 2017
“Self-employed” or “Employee” – since July 1st 2017 a binding decision by the social insurance is possible in Austria, even in advance
LBG-Summary: The classification “Self-employed” or “Employee” can be challenging and has, if wrong, severe consequences on social security and taxes in Austria. In practice, difficulties in the classification arise mainly when freelancers are predominantly working for one client or are integrated into their client’s economic organization. In the course of an audit by the authorities, the question regularly arises is whether the customer has to be qualified as an employer - with all associated obligations and additional payment. In order to provide a binding effect and avoid later consequences, as of July 1st 2017 certain groups, notably “new self-employed”, freelancers, farmers carrying out sideline activities, will be checked by questionnaire – now already before starting to work – if they are assigned to the correct social security and therefore correctly classified “self-employed” or “employee”. The social security check is also possible for existing employment.

Contact & Advise: Our experts in the consulting field “payroll accounting, income tax, social security, labour law” 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.

July 14, 2017
The Austrian Supreme Administrative Court clarified: VAT-free intra-Community supply of goods also applies if both, supplier and buyer take part in an “interrupted” transportation of goods
LBG-Summary: Recently, the Austrian Supreme Administrative Court had to decide if in cases, where the responsibility of the transportation of goods is split by supplier and buyer has to be considered as two separate VAT-relevant processes in the EU or one consistent delivery. The decision of the Supreme Administrative Court that also “split” transportations have to be considered as consistent delivery lead to VAT facilitations.

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.

July 14, 2017
VAT: If the distance selling threshold in an EU recipient country is exceeded, the Austrian supplier owes foreign VAT
LBG-Summary: Due to the free movements of goods within the EU, the delivery of goods to foreign customers is generally easy and non-bureaucratic. However, as an entrepreneur you have to pay special attention to the respective distance selling thresholds in the EU which come into effect when delivering notably to private individuals, small enterprises on behalf of VAT rules or flat-rate farmers. If the Austrian supplier exceeds the distance selling threshold in a certain EU country (for example Germany € 100.000, Italy € 35.000, France € 35.000), the VAT liability is shifted from Austria to that particular EU recipient country. Note: If goods are dispatched or transported from an EU-Member State to Austria by a foreign supplier or on behalf of a foreign supplier exceeding the Austrian distance selling threshold (€ 35.000), the VAT liability is shifted to Austria and the foreign supplier owes Austrian VAT.

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.

July 14, 2017
Employment bonus for new jobs – application as of July 1st 2017
LBG-Summary: Starting on July 1st 2017, companies are entitled to apply for a refund of 50% of non-wage labor costs (e.g. employer social security contribution) for each newly created job over a period of up to three years. The funding is accessible to companies regardless of their size or the business sector in which they operate provided that their headquarters or permanent establishment is located in Austria. The public financing bank Austria Wirtschaftsservice (aws) is responsible for handling the application and granting of funding.

Contact & Advise: Our experts in the consulting field “payroll accounting, income tax, social security, labour law” 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.

June 28, 2017
Foreign scientists and researchers switching their “center of vital interest” to Austria are entitled to claim new attractive Austrian tax benefits
LBG-Summary: According to the “Zuzugsbegünstigungsverordnung 2016” scientists and researchers switching their “center of vital interest” to Austria are entitled to claim an additional tax allowance of 30 percent of taxable income from domestic (and partly also foreign) scientific and research activities for a period of five years maximum. The application for obtaining such tax benefits must be filed with the Austrian Ministry of Finance within six months from the date of the move to Austria, after that period claims for the tax benefit are invalid. In order to qualify for the tax benefits the moving in of the highly qualified person has to serve the advancement of science and research and must be in public interest.

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.

June 13, 2017
Simplified establishment of a limited liability company in Austria by a sole shareholder as of January 1st 2018
LBG-Summary: The deregulation law 2017 allows as of January 1st 2018 – initially limited to a period of three years – the establishment of a limited liability company by a sole shareholder without a notary if certain requirements are met. For the establishment of a limited liability company it will then be sufficient to provide – instead of a notary deed – the electronic declaration about the foundation of the limited liability company via the business service portal and the electronic application of the registration in the commercial register. Despite this (in general) good news we highly recommend seeking tax and economic advice before establishing a limited liability company. Sense, alternatives, consequences on business relations, financing, taxes, social security and much more need to be clarified in detail.

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.

May 26, 2017
In order to claim deduction of input VAT in Austria it is required to carefully check the contract partner
LBG-Summary: If an entrepreneur makes taxable transactions, he is obligated to issue an invoice. Only if the invoice contains in principle all invoice details, the customer (recipient of the supply of goods or services) is entitled to claim deduction of input VAT. It is therefore recommended to carefully check if an invoice contains all relevant details – for invoices over € 400 (including VAT), among others, the name and address of the supplier and customer, the quantity and the commercially used description of the goods supplied, the date of supply, the amount of tax payable and the VAT identification number of the issuer of the invoice. In this regard, every entrepreneur is obligated to check the validity of the VAT number of the issuer of an invoice by a two-step UID-query (VAT-query) via FinanzOnline and to keep the result of the query.

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.

May 26, 2017
Formal requirement for deduction of input VAT – European Court of Justice (ECJ) rectifies tax authorities
LBG-Summary: The ECJ had to decide, if an entrepreneur is entitled to claim deduction of input VAT even if the invoice does not meet all domestic formal requirements but he encloses all relevant documents that proof that the substantive requirements for the deduction of input VAT are met. The ECJ ruled, that tax authorities are not allowed to refuse the right to deduct input VAT when all the information that a taxable person has complied with substantive requirements is available, ergo not only the information on the invoice but also the additional information from the taxable person has to be taken into account.

Despite this good news we highly recommend to comply exactly with all Austrian formal requirements for deduction of input VAT. If in a particular case tax authorities refuse the deduction of input VAT we will represent your rights in consideration of the existing case law of the ECJ.

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.

May 26, 2017
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