Austrian Supreme Administrative Court: “Reverse” Electronic Service of Annulment and Replacement Tax Assessments Does Not Affect Their Validity

Where a new tax assessment issued following an annulment under Section 299 BAO or a reopening of proceedings under Section 303 BAO is electronically served before the corresponding annulment or reopening decision due solely to an IT-related sequencing issue ("reverse order of service"), neither the annulment/reopening decision nor the replacement assessment becomes unlawful.

Overview

In a significant number of cases, the Austrian tax authorities' internal IT system resulted in replacement tax assessments issued following an annulment under Section 299 BAO or a reopening of proceedings under Section 303 BAO being electronically delivered before the corresponding annulment or reopening decisions. Several decisions of the Austrian Federal Fiscal Court (BFG) held that this "reverse order of service" rendered both the procedural decision and the replacement assessment unlawful (see our previous Tax & Legal News by Kelmendi/Rzeszut of 23 March 2026). As a result, concerns arose that this widespread technical issue could have substantial financial implications for the Austrian tax.

The Austrian Supreme Administrative Court (VwGH) has now rejected this approach. In several recent decisions, including VwGH 28 May 2026, Ro 2026/15/0021, it set aside the BFG's judgments on the grounds of substantive illegality, thereby eliminating concerns regarding the validity of numerous affected tax assessments.

Facts

Following a tax audit, the tax authority issued decisions reopening the income tax proceedings together with new income tax assessments. Both decisions were approved simultaneously by the responsible tax officer through a single electronic approval process. Owing solely to the operation of the tax authority's IT system—over which the tax officer had no control—the replacement income tax assessments were electronically delivered to the taxpayers' FinanzOnline inboxes several hours before the corresponding reopening decisions.

The BFG addressed this issue ex officio during the appeal proceedings. It held that, for electronically served decisions, the exact time of service is decisive and can be determined to the second based on the official electronic signature. According to the BFG, where the replacement assessment is served before the reopening decision, both decisions are substantively unlawful and the defect cannot subsequently be cured. The tax authority filed an appeal on points of law with the VwGH.

Decision of the Supreme Administrative Court

The VwGH first observed that, because both decisions had been approved simultaneously, the tax authority had clearly intended to issue the reopening decisions together with the replacement tax assessments in compliance with the statutory requirement that both decisions be linked. The actual sequence of electronic service therefore did not reflect the authority's true intention.

The Court then referred to Section 293 BAO, which permits the correction of errors resulting exclusively from the use of automated data processing where such errors deviate from the authority's actual intention. From this provision, the VwGH derived the general principle that IT-related errors under the BAO may be corrected where they do not reflect the authority's intended decision. Since the BAO contains no specific rule governing an incorrect order of electronic service caused solely by automated processing, the Court considered this to constitute an unintended legislative gap capable of being filled by way of an analogous application of Section 293 BAO.

Accordingly, the VwGH held that reopening decisions and replacement tax assessments approved simultaneously must be treated as if they had been served simultaneously, irrespective of the purely technical order in which they reached the taxpayer's electronic inbox. The earlier electronic delivery of the replacement assessment constitutes a purely technical irregularity that is remedied by analogy to Section 293 BAO and does not require the issuance of a formal correction decision under that provision. Consequently, the challenged assessments were held to be valid notwithstanding the reverse order of service.

Comments and Practical Implications

The VwGH's reasoning comes as a surprise. Section 293 BAO expressly permits the correction of errors contained in a tax assessment itself—such as mistakes in its operative part or reasoning—but does not, according to its wording, extend to circumstances external to the assessment, including the factual timing of service. The analogous application of Section 293 BAO to close an unintended legislative gap in the statutory rules by the VwGH exceeds the actual scope of this rule by far.

From a practical perspective, however, the decision provides certainty. Where the tax authority intended to issue reopening (or annulment) decisions together with the corresponding replacement assessments, an IT-related deviation in the order of electronic service will generally no longer jeopardise the validity of those decisions. Since, according to the VwGH, no separate correction decision under Section 293 BAO is required, the IT-related defect is considered to have been remedied in all affected cases.

Finally, comparable cases are unlikely to arise in the future. By decree of the Austrian Federal Ministry of Finance dated 1 June 2026 (Ref. No. 2026-0.467.895), tax authorities have been instructed to issue the annulment or reopening decision together with the replacement assessment in a single electronic document, effectively eliminating the possibility of different electronic service times for these legally distinct decisions.