Tax & Legal News in English January 2026

Revised Rules: Modernized rules of origin and cumulation in the Pan-Euro-Mediterranean (PEM) area

The Austrian Administrative High Court confirms in his decision of 6 May 2025, that A1 certificates have binding effect only externally - that is, toward authorities of other EU member states - but not within the issuing state itself. National authorities and courts may independently assess whether the relevant social security legislation applies, even if an A1 certificate has already been issued. As a result, neither employers nor employees can rely on an A1 certificate as legally conclusive within Austria, and internal legal remedies remain available. Careful coordination with social security institutions is therefore essential to avoid unexpected conflicts or divergent assessments.

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Amendments to the R&D tax credit regulations with special focus on CAPEX for R&D

The Federal Ministry of Finance just recently published an amended version to the R&D tax credit regulations specifying single aspects of calculating the respective cost basis. Following a ruling by the Administrative High Court it has been explicitly specified that the R&D tax credit has to be calculated by exclusively using tax values, i.e., R&D expenses shall only be relevant for the R&D tax credit if actually constituting tax deductible expenses. Furthermore, the major change affects R&D related CAPEX. Besides implementing the right to choose for the taxpayer whether to include the CAPEX in the year of acquisition or the annual depreciation, the amendment for the first time explicitly foresees that future changes in use of R&D assets (e.g., in case of partial use for R&D only or in case R&D usage is terminated) shall lead to corrections in the calculation of the R&D tax credit. Even though it does not require retroactive corrections, such requirement is expected to trigger additional administrative and documentation work and may also lead to an overall reduction in R&D tax credit volumes. Finally, the amendments foresee a more restrictive interpretation of eligible costs in relation to R&D being close to market.

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Austrian Supreme Court on admissibility of credit processing fees

With recent rulings, the Austrian Supreme Court has made a remarkable departure from its previous case law: credit processing fees included in the general terms and conditions of consumer credit agreements are, in the opinion of the Austrian Supreme Court—contrary to its previous case law—no longer to be classified as a main service not subject to review, but as an ancillary service subject to content review. However, this does not (yet) imply that credit processing fees, especially those negotiated individually, are generally inadmissible. The Supreme Court considered the processing fee in the form of a flat percentage (amounting to 1.5% of the loan amount) to be grossly disadvantageous in a class action lawsuit (February 2025). In addition, there is a recent decision by the Supreme Court (October 2025) in an individual case, in which a “gross” cost overrun was classified as grossly disadvantageous. These decisions could have far-reaching consequences for the drafting of bank contracts and possibly also trigger a new wave of recovery proceedings.

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EU-Commission published FAQs regarding Greenwashing

On September 27th, 2025, the EU-Commission published FAQs on the implementation of the provisions of Directive (EU) 2024/825 regarding empowering consumers for the green transition through better protection against unfair practices and through better information (EmpCo).

The most important points of the FAQs include:

• Brand names and product names that contain an explicit or implicit message about the environment are subject to the EmpCo.
• Terms such as “green,” “eco,” “natural,” or “climate-neutral” are only permitted if they are substantiated by a recognized excellent environmental performance.
• Images of trees, rainforests, water, and animals, as well as the use of colors (such as blue or green text or background), can be interpreted as an environmental claim.
• Packaging design: Designs featuring, for example, green leaves or water droplets in combination with other logos or alongside statements about sustainability or natural ingredients may be regarded by the average consumers as a (general) environmental claim or a (voluntary) sustainability label in accordance with Art 1 (q) EmpCo.
• Vegan/vegetarian: If a vegan or vegetarian product is claimed to be better for the environment, this can be regarded as a (general) environmental claim or sustainability label.
• Claims regarding climate neutrality may only be made if they refer to the entire life cycle of a product. If they refer to offsets outside the value chain, they are prohibited.
• No transition periods for existing products: Existing products must comply with the EmpCO by 27th September 2026. This means that existing packaging that does not comply with the EmpCo must be corrected, for example by stickering.

The FAQs provide guidance on the implementation of the EmpCo in business. It remains unclear how packaging design will be handled in practice. The FAQs emphasize that each case must be assessed individually. It remains to be seen how the member states´ jurisdictions will develop. Experience shows that Austria tends to apply rather strict standards.

The EmpCo should be implemented in Austria by March 27th, 2026. So far, there is no draft law on this.

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Administrative High Court – Merger acc to Art IV RTA

In its decision of October 7, 2025, Ro 2024/15/0002, the Administrative High Court (VwGH) determined that for mergers of partnerships, there will be no retroactive allocation of results in the future for merger partners who do not contribute privileged assets. With this decision, the Austrian Supreme Administrative Court (VwGH) departs from a long-standing practice that had been supported by the Reorganization Tax Guidelines (UmgrStR). For cases where the merger agreement was signed before 5 November 2025, the previous practice will continue to apply.

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