Tax & Legal News in English May 2025

Duties and liability of supervisory board members

The Austrian Supreme Court has clarified the different responsibilities and duties of supervisory board members and distinguished them from those of management board members. Supervisory board members are primarily tasked with monitoring the management of the company and supporting the management board in important decisions. A member of the supervisory board may be held liable for damages caused by a dereliction of duty, in particular, if his or her inaction is directly related to the harm done to the company. The standard of care expected of supervisory board members is based on the conduct of a “reasonable and prudent” member of the supervisory board.

For contact details and more information in German click here...

Distinction between repair and maintenance expenses

In the decision of 26.9.2024, Ro 2023/15/0001, the Administrative High Court deals with the distinction between maintenance and repair expenses concerning two condominium units located in a large residential complex. The relevant reference for assessing whether the utility value of the condominiums has been significantly increased is the individual condominium unit, rather than the entire residential complex. To determine whether the utility value or the useful life has been significantly increased or extended, the specific income source should be used as the assessment criterion. In the underlying case, the specific unit serves as the source of income.

For contact details and more information in German click here...

Update TP Guidelines: contract research

The latest update to the Austrian Transfer Pricing Guidelines 2021 deals in greater detail with contract research arrangements. In particular, it highlights the relevant substance requirements for them. Furthermore, it explains the arm's length treatment of the Austrian research allowance as a special feature of the Austrian market from the perspective of the Austrian tax authorities.

For contact details and more information in German click here...

Minimum wage requirements in Austria in Cross-Border Employments

In a decision from 22 January 2025, the Austrian Supreme Court (OGH) clarified that foreign employers who have employees working in Austria are required to comply with Austrian collective bargain agreements. The case involved a German company employing an employee, whose regular workplace was in Austria. The court ruled that the company had to pay the Austrian IT collective bargain agreement minimum wage, as the company’s activities were classified under the IT sector. This decision reinforces the protection against wage dumping in cross-border employment situations, ensuring that foreign employers cannot bypass Austrian wage standards.

For contact details and more information in German click here...

ECJ on the VAT treatment of compensation payments

In its judgement of 8 May 2025 (C-615/23, Dyrektor Krajowej Informacji Skarbowej), the Court of Justice of the European Union (CJEU) ruled that a flat-rate compensation payment made by a local authority to a company providing public passenger transport services is not part of the VAT taxable amount. This flat-rate compensation was implemented to cover losses from the provision of passenger transport services.

For contact details and more information in German click here...

New deposit system for takeaway packaging?

A total of 1.28 billion disposable packaging items per year in Austria.

A new deposit system for disposable beverage packaging was introduced in Austria at the beginning of the year. Now, recent government plans to extend the deposit system to so-called “takeaway packaging” have been published. While the concept itself is not new, the timing is noteworthy.

In March 2025, the Green Party submitted an unexpectedly timed motion in the National Council, calling for the establishment of a reusable system in the catering industry for takeaway food and beverages. Currently, there is no specific national legislative proposal that meets the Greens' demands. However, given recent developments, such a proposal is likely to be presented soon and could even make the European requirements binding in Austria at an earlier date.

One thing is clear: by the deadlines set in the PPWR at the latest, a significant paradigm shift will occur in the catering industry:

• From 1 January 2030, single-use plastic packaging will be banned for takeaway food in the catering industry if the food or drinks are consumed immediately on the premises.
• By 12 February 2027, at the latest, customers must be able to bring their own packages for takeaway food and must not be treated disadvantageously as a result.
• By 12 February 2028, the catering industry must enable customers to receive takeaway food in reusable packages, which are part of a reuse system. The catering industry therefore needs to establish a reuse/return system for takeaway food packages. The catering industry shall strive to sell at least 10 % of products in reuseable packages this way from 2030 and onwards..

For contact details and more information in German click here...

NIS-2 and Intra-Group Data Center Services

Companies increasingly rely on internal service providers to consolidate resources and leverage synergies, with data center services being a prime example. Although NIS-2 excludes internal data centers owned and operated by the respective entity for its own purposes from the definition, this exclusion would not apply to data centers operated for other group companies, as such operations are not for their own purposes. Hence, strictly interpreting the current legal situation, internal data centers within a group fall under NIS-2 and must meet enhanced cybersecurity requirements. This interpretation is neither intended by the legislators nor practical.

For contact details and more information in German click here...