Tax & Legal News in English June 2026

Administrative High Court on the phase-congruent recognition of dividends

In its recent decision, the Austrian Administrative High Court (VwGH) decided that phase‑aligned recognition of dividend receivables between parent and subsidiary with identical balance sheet dates is not permitted for tax purposes. Dividend claims may generally only be recognised when the distribution resolution has been determined; exceptions are not available where parent and subsidiary share the same reporting date. In the case at hand, dividends from subsidiaries could not be activated as of 30 September 2013, so the parent lacked sufficient distributable profit to cover a special dividend. The portion of this special dividend economically financed by those (not yet realised) subsidiary dividends was therefore recharacterised as taxable capital gain in connection with the subsequent share sale.

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

Administrative High Court on the concurrent existence of a tax liability arising from incorrect invoicing and an intra-Community acquisition due to the use of a VAT ID number 

In its judgments of 22 April 2026, Ra 2023/15/0003 and Ra 2023/15/0102, the Administrative High Court considered the question of whether the incorrect charging of VAT on an intra-Community supply from Austria that is exempt under substantive law precludes the taxation of a double acquisition on the basis of the use of the purchaser’s Austrian VAT-ID number in Austria, and what implications this has for a potential input VAT deduction.

The use of a VAT-ID number from another Member State may trigger not only an intra-Community acquisition in the country of destination but also an additional intra-Community acquisition in the country where the VAT-ID number is registered, provided that no corresponding proof of taxation is provided in the country of destination. Furthermore, a VAT liability may arise by virtue of invoicing if VAT is incorrectly shown on an invoice for an intra-Community supply that is exempt under substantive law. In the view of the Administrative High Court, these circumstances may coexist in both two-party transactions and chain transactions, even if they relate to the same transaction. Input VAT deduction is excluded in both cases. It should be noted that this case concerns the legal situation prior to the implementation of the so-called Quick Fixes (i.e. prior to 1 January 2020). For cases arising from 1 January 2020 onwards, further proceedings are currently pending before the General Court of the European Union (Case T-689/25).

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

COVID-19 Subsidies: Austrian Federal Fiscal Court on Switching Between Subsidy Schemes

The Tax Appeals Court (BFG) held that receiving a Loss Compensation (“Verlustersatz”) does not automatically exclude a subsequent entitlement to the Fixed Cost Subsidy 800,000 (“Fixkostenzuschuss 800,000”). While the COVID-19 funding guidelines aim to prevent double funding, they do not explicitly prohibit this specific sequence of support measures. As a result, the court found that a refund of the Fixkostenzuschuss 800,000 was not justified in the absence of a clear regulatory basis. However, the decision confirms that any potential overcompensation must still be corrected through repayment or set-off. The final outcome remains pending due to an appeal to the Administrative High Court (VwGH).

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

Outstanding Tax Liabilities: Who can bei personally liable

If a company is no longer able to pay its taxes, the tax authorities will not focus solely on the company itself. Especially in times of corporate crisis or following insolvency, the question often arises whether specific individuals may also be held personally liable. It is widely known that managing directors may be affected. Less well known is that, under certain circumstances, other persons may also be considered. Conversely, however, the argument that someone acted merely as a “pro forma” managing director does not always provide protection either.

The legal basis for this is found primarily in sections 9 and 9a of the Austrian Federal Fiscal Code (BAO). While section 9 BAO governs the liability of representatives, section 9a BAO concerns persons who actually exert influence over the fulfilment of tax obligations. Two recent decisions of the Austrian Federal Finance Court (BFG) and the Austrian Supreme Administrative Court (VwGH) illustrate when personal liability may arise and where its limits lie.

The current case law shows that personal liability for outstanding tax liabilities does not automatically extend to every influential person within a company, nor is it limited to formally appointed managing directors. What matters instead is the specific legal basis on which liability is asserted.

For liability under section 9a BAO, a strong operational role alone is not sufficient; actual influence over the fulfilment of tax obligations is required. By contrast, liability under section 9 BAO is closely linked to representative status. As a result, not only managing directors but, in certain cases, also holders of a power of procuration may fall within its scope, while a formally appointed managing director cannot simply rely on the argument that he or she acted only in a “pro forma” capacity.

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

No assignment of shares in a limited liability company that are created in the future as part of a capital increase

The Austrian Supreme Court has ruled out the possibility of assigning shares in a limited liability company (GmbH) that are created in the future as part of a capital increase. If the third party named in the capital increase resolution and approved by the shareholders for the acquisition does not declare in their declaration of acquisition (Übernahmserklärung) – in addition to acquiring the shares – that they are joining the company as a shareholder, there is no valid acquisition agreement from which rights to the original acquisition (originärer Erwerb) of a share could be transferred to another party. The Supreme Court also emphasizes the strict legal requirements for capital increases and the public disclosure function of the commercial register.

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

Cross-border directors’ fees: Article 16 OECD MC in practice

Cross-border remuneration of managing directors and supervisory board members is often misclassified, leading to uncertainty and double taxation risks. Article 16 OECD Model Convention allocates taxing rights for directors’ fees to the state of residence of the paying company and overrides the general employment income rules in Article 15. The Austria–Germany tax treaty goes further by explicitly extending Article 16 to managing directors and board members registered in the commercial register, so Austria may tax the portion of remuneration attributable to the managing director function at an Austrian company even if the director works physically mainly from Germany. Clear contractual allocation of functions and remuneration, combined with consistent wage tax implementation in both countries, is key to managing tax exposure for cross‑border executives and their employers.

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

Transfer Pricing and VAT: Stellantis Portugal (C-603/24)

On 13 May 2026, the CJEU ruled in Stellantis Portugal (C-603/24) that transfer-pricing adjustments are not automatically to be treated as consideration for taxable services for VAT purposes. The case concerned a Portuguese distribution company whose transfer prices for vehicles purchased from intra-group manufacturers were adjusted to secure a target margin. Although warranty, recall and roadside assistance costs were considered in the pricing formula, the CJEU held that this did not establish a direct link between a specific service supplied by the distributor and consideration received from the manufacturers. The judgment clarifies that transfer pricing adjustments must be assessed based on their concrete legal and economic function. Depending on their structure, they may constitute consideration for a specific supply, affect the taxable amount of an earlier supply, or fall outside the scope of VAT.

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