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Tax & Legal News in English | January 2025

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Gambling tax in the context of (prize) competitions without consideration

These games of chance in the context of (prize) competitions without consideration are subject to a gambling tax of 5 % of the financial benefits (prize) promised. The competitions must (also) be aimed at the domestic public and the tax must exceed EUR 500.00 in the respective calendar year. The annual gambling tax for competitions return must be filed and the gambling tax must be paid by 20 January of the following year.

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Tax Appeals Court on the assessment basis of the Austrian R&D premium  

In Austria, companies may claim an R&D premium for in-house research amounting to 14% of the research expenses or expenditure eligible for the premium. In its decision of 20 March 2024 (RV/7101947/2023), the Tax Appeals Court (BFG) decided that only tax-deductible expenses are to be taken into account when determining the R&D premium. A deduction for employee remunerations over EUR 500,000 (per employee per year) is not allowed tax wise and could therefore not be considered for the calculation of the R&D premium.

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From Home Office to Telework

The Telework Act, effective with January 2025, modernizes Austria's telework regulations, replacing "home office" with a broader concept that includes not only home office activities but also various other possible remote work locations. Key updates include a distinction between "narrow" and "broad" telework, impacting social security, specifically accident insurance coverage. Telework agreements require mutual consent and emphasize data protection for sensitive information. Tax provisions allow employees to receive a tax free daily allowance of €3 for telework days from the employer, with ergonomic home office expenses being deductible under specific conditions. Overall, the Telework Act aims to foster transparent employment relationships, enhance data security, and provide tax incentives, positively influencing Austria's telework culture.

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Transfer of a securities account to a Liechtenstein foundation

In the decision of 23.1.2024, RV/71000234/2022, the Federal Fiscal court dealt with the question of whether the transfer of a securities account by an individual to the securities account of his Liechtenstein private foundation held at the same bank is subject to capital gains tax if the foundation is treated as transparent for tax purposes. In such a case, the exemption provision of § 27 para. 6 no. 2 ITA applies, as the securities remain the economic property of the same taxpayer.

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Volunteer allowance comes with new reporting requirements

The 2023 Charitable Reform Act (GemRefG 2023) introduced the Freiwilligenpauschale, a new framework for compensating voluntary activities performed after 31 December 2023. This measure resolves legal uncertainties from the previous system, which presumed expenses under EUR 75.00 per month were not taxable income.

This new volunteer allowance offers two tiers: a “small allowance” of EUR 30 per day (up to EUR 1,000 annually) and a “large allowance” of EUR 50 per day (up to EUR 3,000 annually). These benefits apply to organizations with charitable, benevolent, or religious purposes. Volunteers receiving specific travel compensations or with comparable qualifications in taxable employment are excluded from eligibility. Additionally, the large allowance requires the activity to serve humanitarian or disaster relief purposes, or involve roles such as instructors or coaches under defined conditions.

Organizations must maintain detailed records of volunteer activities and submit reports to tax authorities for payments exceeding the annual limits. Surplus amounts are treated as taxable income for recipients.

The new volunteer allowance strengthens voluntary engagement by enabling fair compensation while providing overdue legal clarity. However, organizations must remain diligent in meeting their recording and reporting obligations to ensure compliance. The first reporting obligation for exceeding the maximum annual amounts of the volunteer allowance must be met by 28 February 2025.

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Germany: Revised Transfer Pricing Principles 2024

On 12 December 2024, Germany's Federal Ministry of Finance released the revised Transfer Pricing Principles (VWG VP) for 2024. These principles focus significantly on intra-group financing transactions, requiring taxpayers to demonstrate their ability to service debt over the transaction's duration and justify the economic necessity of the funding. Key updates include specific rating requirements, prioritizing official agency ratings and allowing non-public or software-derived ratings with proper documentation. These new regulations take effect from 1 January 2024, and companies must ensure their financing transactions comply, potentially necessitating adjustments to existing arrangements. This alignment with international standards aims to reduce audit conflicts and provide clearer guidelines.

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Self-registration of EORI number - representation possible since 8 August 2024

The new application procedure for the EORI number in Austria for legal entities and individuals as part of a self-registration process has been in force since 6 June 2024 and offers the advantage of receiving the EORI number immediately after registration. Representation by professional party representatives such as tax advisors and auditors has been possible since 8 August 2024.

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New regulation for registration of reorganizations 

A new directive was published to unify the requirements for the reporting of reorganizations. The directive is applicable for reorganizations that are signed or resolved after the 30th of June, 2025. 

The Reorganization Reporting Directive creates a structured framework for the reporting of reorganizations such as contributions, demergers and mergers of partnerships, which must be reported to the competent tax authority within nine months unless the commercial register court is the competent authority. 

The Reorganization Reporting Directive is in effect for reorganizations signed or resolved after June 30, 2025. The reporting must be made electronically via FinanzOnline. Only if the reporting taxpayer does not have an Austrian tax number a notification via paper form is still possible. 

The reporting must include basic information regarding the reorganization as well as specific information relating to the specific reorganization type, further, supporting documents like reorganization contracts and balance sheets must be submitted in course of the reporting.

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Flat-rate travel expense allowance: Reminder regarding annual reporting obligation!

The flat-rate travel expense allowance is a privilege for charitable associations, whose purpose is the exercise and promotion of sports. From 1 January 2023 onwards, values in the amount of EUR 120 per day respectively EUR 720 per month are tax-exempt.

There are several conditions, which must be fulfilled. The allowance is e.g. only tax-free in case it is paid to sportsmen, referees and supporting personnel. It is important to comply with the annual reporting obligation, which states that associations must transfer information regarding all persons, who have received a flat-rate travel expense allowance electronically via ELDA to the social security body until end of February of the following year. . In case the electronic submission is unfeasible the official form L 19 can be filed in hard copy.

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