Tax & Legal News in English February 2026

Company events – Is it possible to exceed the tax-free allowance?

The Austrian Tax Appeals Court recently examined the tax implications of employers contributions to company events that exceed the statutory allowance of EUR 365,00 per employee and calendar year. Key considerations included distinguishing between expenditure driven by corporate interests and individual compensation. The court concluded that benefits are not taxable if they primarily serve the organisation's objectives, such as improving the workplace atmosphere and fostering team cohesion. Furthermore, the court addressed the concept of “forced enrichment”, whereby employees receive benefits involuntarily and cannot decline them without facing disadvantages. Therefore, the Austrian Tax Appeals Court assumes that company events do not constitute taxable income for employees. While awaiting a final decision of the Austrian Administrative High Court, businesses are advised to adhere to the current allowance limit in order to avoid any risk.

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

No tax liability for de facto managing directors under the Austrian Federal Tax Code

A recent decision by the Austrian Federal Fiscal Court dated 29 October 2025 clarifies that a de facto managing director cannot automatically be held liable for a company’s tax obligations. This concerns liability under the Austrian Federal Tax Code. A de facto managing director is a person who actually manages a legal entity and has a significant influence on its management without being formally appointed as a managing director or registered with the commercial register.
In the case at issue, the tax authorities sought to hold an individual liable for unpaid taxes on the grounds that he acted as a de facto manager. Although he had operational authority in the company’s car sales and workshop activities, the court found no evidence that he exercised control over tax matters or fulfilled managerial duties related to tax compliance. Tax responsibilities were handled exclusively by formal managing directors and external tax advisors.
The Austrian Federal Fiscal Court held that mere influence, operational leadership, or involvement in business decisions is insufficient for liability under the Austrian Federal Tax Code. Instead, there must be clear, verifiable proof that the person actually performed representative duties and influenced tax-related obligations. The ruling underscores that allegations of de facto management alone do not establish liability without concrete evidence of control over tax compliance.

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

Cross-border leasing of "remote" employees requires a permit

The Administrative High Court has clarified that a permit is required for the cross-border leasing of employees to third countries - even if the employees do not physically cross a border.
The ruling was prompted by the case of an Austrian company that leased a total of 44 employees to businesses based in third countries without the necessary exemption permit.
A cross-border personnel leasing of Austrian employees to third countries requires a corresponding permit, unless there is an exemption regulation from the competent ministry. This permit may be granted upon application if there are no overriding labour market or economic concerns, and that employee protection is not compromised.
In its decision, the Administrative High Court was confronted with the question whether such a permit is also required if the employees physically remain in Austria and carry out their work "remotely".
The Court ruled that the wording of the law does not require a physical border crossing of the transferred employees and highlighted that the virtual transfer of employees fulfills the protective purpose of the regulation, as labor market reasons or economic concerns could also justify denying the permit. Furthermore, the ruling states that the EU-Posting of Workers Directive and the provisions against wage and social dumping, which require a physical change of location for their applicability, do not apply in this case due to the posting from Austria to third countries.
Consequently, the Administrative High Court concluded that the cross-border leasing of employees requires a permit even if the leased employees do not physically cross the border. The ruling underscores the distinct legal treatment of transfers within the EU/EEA and to third countries. In particular, the ruling clarifies the legal framework concerning the growing phenomenon of remote work, which is expected to result in a significant increase in permit applications.

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

VwGH: Taxation of a pilot resident in Austria under the DTA Malta

The Austrian Supreme Administrative Court (VwGH) confirmed that an Austrian-resident pilot working for a Maltese airline must have his income taxed only in Malta under the Austria–Malta tax treaty. The court agreed that Austria has to exempt this income and found that the German wording of the treaty simply contains an editorial mistake. As a result, the VwGH dismissed the tax authority’s appeal.

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

VwGH: Liability pursuant to § 9 BAO also applies to authorized representative

According to Sec 9 of the Autrian Federal Fiscal Code (BAO), legal representatives of taxpayers may be held liable for taxes that could not be collected as a result of culpable breaches of their duties. Representatives are defined as the persons listed in Sec 80 to 83 BAO. In its decision of 25 June 2025, the Administrative High Court (VwGH) dealt with the question of whether authorized representatives with proxy also fall under this liability rule, thereby ruling on a legal issue that had not yet been fully clarified but had been the subject of intense debate. The Court ruled that liability under Sec 9 BAO can also apply to authorized representatives such as proxies.

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

Multi-state workers according to Regulation (EC) 883/2004:
CJEU clarifies consideration of working days in third countries

The Court of Justice of the European Union (CJEU) clarified how work performed in third countries should be treated when assessing the 25‑percent threshold for multi‑state workers under the Regulation (EC) 883/2004. According to the decision, all actual work activities must be considered, including those carried out in non‑EU/EEA countries or Switzerland. Multi‑state workers fall under the social security system of their country of residence if they perform at least 25 percent of their working time or earn at least 25 percent of their income there. The decision confirms that third‑country work must be included in calculating these proportions and social security affiliation must be based on the worker’s entire activity profile.

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

BMF Decree on the Use of Electronic Signatures and Seals in Tax Procedures

The Austrian Federal Ministry of Finance issued a decree clarifying how electronic signatures and electronic seals are to be handled in tax procedures. The guidance aims to ensure a uniform and legally secure approach when parties submit documents electronically and to reduce uncertainty regarding their recognition and processing. Under Austrian tax law, submissions require written form; a qualified electronic signature has the same legal effect as a handwritten signature, whereas non-qualified signatures do not. The decree also emphasizes that the legal effect of an electronic signature does not extend to printed versions of the document and that purely electronic data transmissions without a signature are not covered. Overall, the new guidance strengthens digital communication with tax authorities while setting clear limits and increasing legal certainty in electronic tax proceedings.

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

BMF: Information on intra-group assignments for cross-border commuters between Austria and Germany

If the cross-border commuter regulation according to Art. 15 para. 6 of the double taxation agreement (DTA) between Austria and Germany is applicable, in the case of an assignment to a third country, the employment must be assessed according to civil law standards.
Since 1 January 2024, employees have been allowed to work from home without negatively impacting the application of the cross-border commuter regulation. Instead of requiring a "daily return", an employee is considered a cross-border commuter if he:she “usually” works in the border zone without working elsewhere for no more than 45 working days and 20% of the working time. According to the Ministry of Finance, an intra-group assignment of an employee by its Austrian employer to a third country does not create a second employment Therefore, in case of an assignment to a third country the working days spent in the third country have to be considered as working days not spend close to the border and therefore are relevant when calculating the 45-day / 20% threshold.

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

General Court on double acquisition in the case of VAT liability based on invoicing Directive

In its ruling, the General Court follows the opinion of the Advocate General and concludes that the VAT liability based on invoicing for zero-rated intra-Community supplies does not preclude the simultaneous taxation of an intra-Community acquisition under a VAT-ID number in the same Member State. The consequence of the double acquisition is that the acquisition VAT owed cannot be deducted as input VAT and, in the first instance, leads to a cost factor for the purchaser.
It should be noted that this case concerns the legal situation prior to the implementation of the so-called Quick Fixes (i.e. before 1 January 2020).
For cases arising after 1 January 2020, however, the ECJ ruling of 7 July 2022 (Case C-696/20) would generally apply, but further proceedings in this regard are currently pending before the General Court (Case T-689/25).

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