Tax & Legal News in English | April 2024
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Reduction of the assessment rates for the contribution of chamber of commerce as of 1.1.2024
As of 1.1.2024 the Austrian chamber of commerce has reduced the assessment rates for the contribution of chamber of commerce 1 and the contribution of chamber of commerce 2 (surcharge for the employer contribution).
For an assessment amount of up to EUR 3 million per year, the assessment rate was reduced to 0.28 % (0.29 % until 2023). If the assessment base exceeds EUR 3 million per year, the assessment rate for the excess amount is reduced by 5 %. The newly adopted assessment rate of 0.2660 % (0.2755 % until 2023) is applied to parts of the assessment base above EUR 3 million up to EUR 32.5 million. Once the second threshold of EUR 32.5 million is exceeded, the assessment rate for the excess amount is reduced by 12 %. This results in a reduced assessment rate of 0.2464 % for parts of the assessment base above EUR 32.5 million (0.2552 % until 2023).
For credit institutions and insurance companies was also a reduction of the assessment rates decided. The reduced assessment rate of 0.036 % (0.037 % until 2023) is to be applied for an annual assessment base of up to EUR 24 million. For parts of the assessment base above EUR 24 million per year and up to EUR 260 million, a reduced assessment rate of 0.0342 % (0.03515 % until 2023) is applied. If the assessment base exceeds the higher threshold, the assessment rate for parts of the assessment base above EUR 260 million is reduced by 12 % and amounts to 0.03168 % (0.03256 % until 2023).
Both contributions of chamber of commerce are self-calculation levies. For this reason, the reduced assessment rates are already to be used for the calculations for the first quarter of 2024.
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Planned amendments to labor law
Directive [EU] 2019/1152 on transparent and predictable working conditions requires changes in Austrian labor law. Against this backdrop, the Austrian Parliament passed in March 2024 a corresponding draft of amendments which came into force on 28 March 2024. The amendments to the law, provide for changes to labor law with regard to the employment contract, multiple employment and the assumption of training and further training costs, as well as the extension of protection against dismissal for cause.
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Triangular transaction regulation since 1 January 2023 and recoverability of triangular transactions
The triangular transaction regulation, which has been modified since 1 January 2023 and allows more than 3 entrepreneurs to be involved, brings administrative relief for entrepreneurs. With regard to a retroactive recoverability of failed triangular transactions, this is ruled out according to current Austrian case law with reference to ECJ case law. However, the Austrian tax court has now affirmed the ex nunc applicability of the simplification rule for triangular transactions; as an official appeal has been lodged against the decision from the Tax Appeals Court, it remains to be seen how the Administrative High Court will proceed.
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New cross-border commuter regulation between Germany and Austria
A new consultation agreement has been published regarding the revised cross-border commuter regulations in the double tax treaty between Austria and Germany. As part of the consultation agreement, the cross-border commuter regulation was revised and adapted to the latest developments in the world of work and the amended types of work (working from home).
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Pillar Two: Requirements of a Qualified CbCR
With the implementation of the global minimum taxation (Pillar Two), the companies affected will be faced with additional declaration and notification obligations as well as a considerable additional compliance burden. This shall be prevented by certain simplifications - so-called safe harbours. The safe harbour regulations developed by the OECD are also reflected in the Austrian Minimum Taxation Act ("MinBestG"). In practice, the temporary CbCR safe harbours are currently probably the most relevant as they are mainly based on existing data, eg from the groups country-by-country report (“CbCR”) and generally give the affected groups more time to set up a fully comprehensive Pillar Two calculation and reporting process.
The requirements to data quality and adjustments to be considered for CbCR differ from the requirements to data used for the calculation of the transitional CbCR-Safe Harbour-Tests under the Pillar Two Safe Harbour rules. Especially the requirements to data quality for the transitional CbCR-Safe Harbour calculations are considerably higher than the requirements solely for CbCR purposes. In order for groups thus to rely on the transitional CbCR-Safe Harbours, they are faced with the challenge of evaluating their existing CbCR process and adapting the data where necessary to reflect the requirements under the temporary CbCR-Safe Harbour rules.
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Wage Tax Guidelines maintenance decree 2023
The maintenance decree considers the legal changes regarding company kindergarten and voluntary employer childcare allowance (i.e., allowance has been increased to EUR 2.000,00 and extended to children up to the age of 14). With regards to the childcare allowance, the tax authority has clarified that grouping according to social characteristics, eg all single parents, is accepted for tax purposes.
The Wage Tax Guidelines comply with the decision of the Administrative High Court, according to which options are only deemed to have accrued when they are exercised and not when they are granted. Therefore, options are only taxable when they are exercised.
If a privately purchased public transport ticket is used for business trips, the Wage Tax Guidelines now stipulate that the employer can pay the employee a tax-free reimbursement of travel expenses in the maximum amount of the notional costs for the cheapest public transport.
The Wage Tax Guidelines now indicate when there is a significant discrepancy between the amount of the dirtiness, hardship and hazard supplements stipulated in the collective bargaining agreement and an appropriate allowance. For example, a significant discrepancy exists if the allowance granted exceeds the appropriate amount by more than double.
The increase in the tax-free allowances for dirtiness, difficulty and hazard surcharges, surcharges for Sunday, public holiday and night work and for overtime surcharges has also been incorporated into the Wage Tax Guidelines. In this context, they state that the decisive criteria for overtime supplements is not the time of payment, rather the payroll period in which the overtime was worked. If overtime is paid retrospectively, the respective legal situation must be considered. For example, if overtime is worked in December 2023 and the overtime is paid out with the January 2024 payroll, the overtime must be taxed according to the old legislation (2023).
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Update of the income tax guidelines – Highlight overview
In March 2024, the Austrian Ministry of Finance published an update of the income tax guidelines. This update contains a variety of clarifications regarding the greening of the investment allowance, the contribution in partnerships, the withdrawal of properties, tax exemptions and attribution of dividends.
For contact details and more information in German click here...
Reduction of Austrian minimum share capital
By 1 January 2024, the minimum share capital contribution for Austrian limited liability companies was generally reduced from EUR 35,000 to EUR 10,000. The reduction of the minimum share capital also results in a change of the minimum CIT. The minimum CIT now amounts to EUR 500 per year or EUR 125 per quarter.
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Tax Appeals Court : Use of manufacturer's exemption for own services
The decision of the Tax Appeals Court of 20 March 2023 (RV/1100246/2021) concerned the question of whether a taxpayer's work, including unpaid help from relatives, could be considered as fictitious production costs for the purposes of the manufacturer's exemption under the Austrian Income Tax Act. The ruling clarified that buildings constructed for a fixed price are not self-constructed for the purposes of the exemption if the actual construction costs do not exceed the fixed price, a condition that was not met in this case. It also reiterated that the exemption applies only to properties built where the taxpayer assumes the full financial risk.
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The new ORF contribution fee for companies
The ORF Contribution Fee Law has been in force since 1 January 2024 to ensure the financing of the Austrian Broadcasting Corporation (ORF). This not only affects private households, but also companies. By linking it to local tax, companies should not incur any administrative burden (apart from the initial registration). The contribution liability is determined automatically based on the previous year’s municipal tax return. The assessment basis for calculating the total contribution is the sum of the wages that were paid to the employees of the business premises located in the municipality in the previous year.
The amount of the contribution is determined on a sliding scale, with large companies with higher payrolls having to pay correspondingly more. The contribution is payable for each calendar month. Since the contribution has to be paid per municipality in which there is at least one business premises, companies with business premises in several municipalities could face very high costs. Therefore, the ORF Contribution Fee Law provides for a cap of EUR 1.530,00 per company and calendar month. This cap is intended to ensure that companies are not placed unduly burdened.
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On 15 May 2024 the following declarations/payments are due:
- Advance VAT declaration for March 2024 (or the first quarter of 2024).
- Standardized Consumption Tax for March 2024.
- Capital Gains Tax for capital gains on debt securities for March 2024.