Tax & Legal News in English March 2026

New Social Security Agreement Austria–Mongolia

The new Austria–Mongolia Social Security Agreement harmonizes pension systems andis applicable for Austria to health and accident insurance. It guarantees equal treatment of nationals, enables the export of benefits, and prevents double insurance through clear rules for secondments of up to 60 months. Pension insurance periods in both countries can be totalized for benefit entitlement, with each state paying proportionally under its own law. The Agreement also simplifies administrative cooperation and protects data privacy. The ratification and entry into force of the agreement have not yet taken place, which is why the agreement is currently not yet applicable.

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Social Security Agreement between Austria and Brazil in place: 

The Social Security Agreement between Austria and Brazil applies from 1 March 2026. It speci-fies which social security legislation applies in individual cases, supports equal treatment, and addresses the aggregation of insurance periods.

Generally, individuals are intended to be subject to the social security system of the country in which they carry out their employed or self‑employed activity. Under the rules for posted work-ers, employees may remain insured in the sending state for up to 60 months, provided they were insured in Austria for at least one month prior to the posting. The Agreement also enables further exceptions from these rules.

The Agreement covers pension insurance, whereas Health‑care benefits are not included, so separate arrangements may be needed. For pension benefits, entitlement is determined by combining insurance periods completed in both states, with Austria applying Regulation (EC) No 883/2004.

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Offset of initial values in the event of revovation

The Tax Appeals Court ruled that in the event of the dissolution of a private foundation, a corporation as the ultimate beneficiary may offset the initial values against the final donation. However, the offsetting of the initial values is limited to the amount of the final donation.

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Representative Action for Redress: Austrian Supreme Court Issues First Landmark Decision

In its decision of 27 January 2026 (9 Ob 111/25a), the Austrian Supreme Court issued its first ruling on the newly introduced representative action for redress under Austrian civil procedure law. The case concerned claims for the repayment of loan processing fees, where the claimant relied on a prior Supreme Court decision that had already classified the relevant contractual clause as grossly disadvantageous to consumers.

The Court clarified that the existence of “essentially similar facts” constitutes an independent procedural requirement for the admissibility of such actions. This requirement may be fulfilled where the claims arise from similar loan agreements or comparable clauses concerning loan processing fees.

At the same time, the Supreme Court emphasized that although the EU Representative Actions Directive aims to facilitate collective consumer redress, it does not relax the requirement of a complete and coherent statement of claim. Claimants must still fully set out the relevant facts demonstrating the similarity of the underlying claims. The decision therefore highlights that preparing a representative action for redress may involve considerable organizational and procedural effort for the claimant.

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CBAM pricing phase starts in 2026

The Carbon Border Adjustment Mechanism (CBAM) was introduced in October 2023 to price in the CO2 emissions generated during the production of energy-intensive products such as iron and steel, cement, aluminum, fertilizers, electricity, and hydrogen. During the transition phase (from 1 October2023 to 31 December 2025), importers of CBAM goods were subject to documentation and reporting requirements. The pricing phase began on 1 January 2026. Importers who import CBAM goods from 1 January 2026onwards must retrospectively pay for CBAM allowances for 2027.

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Austrian Tax Appeals Court: Consequences of improper order of service on procedural and subsequent substantive notices

In tax proceedings involving the annulment of a substantive notice or the reopening of proceedings, strict compliance with prescribed sequence of service is required . The Austrian Tax Appeals Court has confirmed that a new tax assessment delivered via FinanzOnline - even seconds before the required annulment or reopening notice - is illegal (res iudicata) and cannot be corrected in the course of an appeal procedure. Accordingly, the procedural notice must be served first, with the “new” substantive notice issued simultaneously or, at a minimum, in the required logical order.

Recent decisions show that these requirements are not consistently met in practice, particularly in the context of electronic delivery via FinanzOnline, pointing to a broader systemic issue within the Austrian tax administration. The Court emphasized that a new substantive notice served - even seconds prior to - the relevant annulment or reopening notice is legally void (res iudicata) and cannot be remedied. The validity of substantive notices delivered via FinanzOnline ultimately depends on their precise electronic timestamps, meaning the substantive notice must not be served before - and should ideally be delivered at the same time as - the procedural decision.

Considering this technical deficiency, the timestamps of procedural and substantive notices delivered via the FinanzOnline Databox should be closely reviewed, as incorrect service sequencing may invalidate both current and prior assessments.

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Federal Government to Introduce 4.9% Reduced VAT on Staple Foods from 1 July 2026

The Federal Government introduced a law proposing a reduction of VAT on selected staple foods. From 1 July 2026, a new reduced VAT rate of 4.9% will apply to certain everyday products. The aim of the measure is to ease the burden on the population in view of rising food prices.
The reduction of VAT to 4.9% for selected staple foods is a socio-politically motivated relief measure. For companies, however, it entails a considerable implementation effort.

In addition to the technical adaptation of systems, service dates, advance payments and ongoing contractual relationships have to be reviewed carefully. Errors in accounting or in the accrual of expenses around the cut-off date can lead to corrections.

In practical implementation, tax relief measures are regularly associated with administrative and technical challenges. An early analysis of the affected processes and systems is therefore crucial in order to manage the changeover in a legally compliant manner.

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BMF decree on the Use of Residence Certificates

To request a potential WHT relief at the source, the Austrian MoF provides specific forms. The use of the official forms provided by the Austrian tax authorities, in particular ZS-QU1 and ZS-QU2 as well as the relevant refund forms, is now required. These forms must be signed by the income recipient and confirmed by the competent foreign tax authority and must be present as originals.

In addition, also electronic signatures by all parties will be accepted in the future. The decree places particular emphasis on the authenticity of the forms. Forms that were signed electronically and later supplemented with a handwritten confirmation (including stamp) from a foreign tax authority will no longer be considered valid. As foreign tax authorities rarely issue electronically signed documents outside their own systems, handwritten confirmations are expected to remain the standard.

Questions regarding the effective date and the handling of other forms, such as ZS EUMT, remain unanswered. Since the decree does not specify a date, it is reasonable to assume that the new rules apply as of 19 December 2025.

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Key Updates to KFS/RL 25 on Reorganizations Accounting

The revised KFS/RL 25 provides greater clarity on the timing of recognition, the treatment of retroactive equity changes, and the accounting for compensation measures under corporate law, while significantly expanding guidance on cross-border reorganizations under the EU Reorganization Act. Key takeaways include the decisive role of economic ownership for recognition in accounting, mandatory conversion of foreign book values, and stricter requirements for equity classification in cross-border conversions. Despite these clarifications, accounting for reorganizations remains complex, making early planning and careful analysis—particularly in international cases—essential.

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Austrian Public CbCR: Key Insights for Multinational Groups

The Austrian Public Country‑by‑Country Reporting rules introduce new transparency requirements for large multinational groups with consolidated revenues of at least EUR 750 million. Whether an Austrian entity must publish a report depends on the location of the ultimate parent entity, the structure of the group, and whether a Public CbCR is already made available elsewhere in the EU/EWR. Austrian entities within EU‑headed groups are generally covered through the parent’s publication, while entities in groups with non‑EU/EWR parents may face publication obligations if specific availability and disclosure conditions are not met at the parent level. Multinational groups are encouraged to review their structures promptly to determine potential responsibilities and prepare the necessary reporting steps.

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Anti-deceptive packaging law passed

The Austrian parliament passed the proposed Anti-Deceptive Packaging Act (“Anti-Mogelpackungs-Gesetz”) on February 25th 2026. The Federal Council passed the draft law on March 12th 2026, paving the path to enactment of the law.

The Anti-Deceptive Packaging Act requires food and drugstore retailers with a sales area of more than 400 square meters or with more than five branches to label reductions in the fill quantity of food and non-food items. The Anti-Deceptive Packaging Act applies to food products for which basic price labeling is mandatory under the Austrian Price Labeling Act and other non-food items for which basic price labeling is required by regulation.
Consumers must be informed by retailers about the reduction in quantity and the higher price by means of information displayed at the point of sale. Failure to comply with the Anti-Deceptive Packaging Act may result in administrative penalties. Competition law sanctions are also possible.

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