www.pwc.com/at/taxnews Austrian Tax News 1 3 4 4 5 6 7 8 In this issue Direct Taxes Draft Bill of the 2015 tax reform Changes to Austrian income tax at a glance by Guelay Karatas and Claudia Pranckl AG Kokott maintains that Austrian goodwill amortisation scheme is not in line with freedom of establishment and does not constitute illegal State aid (C-66/14) by Richard Jerabek and Nikolaus Neubauer Withholding tax charge in connection with hidden profit distributions by Hannes Rasner and Benjamin Fassl Recent group-related case law by Thomas Schneider and Veronika Daurer Indirect Taxes Draft report on the 2015 tax reform VAT and real estate tax by Guelay Karatas and André Gusmao Stamp duty update Transfer of contracts and asset deals by Georg Zehetmayer and Thomas Pfeifenberger Legal Austrian Ministry of Finance releases new guidance on unilateral advance pricing agreements by Sandra Staudacher and Johannes Knopp Austrian Tax Facts and Figures Draft Bill of the 2015 tax reform Changes to Austrian income tax at a glance On 20 May 2015 the second part of the Bill of the Tax Reform Act 2015 was published. As already announced by the media, the main changes will affect income tax rates, VAT rates as well as real estate transfer tax New classification of income tax rates and other amendments with regard to wage taxes In future, the Austrian income tax system will have six as opposed to the current three tax rate levels, with the minimum tax rate to be lowered to 25%. This measure means a general reduction in tariffs amounting to around EUR 4.3 billion. In turn, a maximum tax rate of 55% will be introduced, which will be limited to five years. This maximum 55% tax rate is applicable to gross income exceeding EUR 1 million. To reduce the administration costs with regard to wage taxes, the draft Bill provides for the harmonisation of the determination of wage taxes and the social security system, in particular with regard to individual tax exemptions. One new provision provides for staff discounts up to an amount of 10% to be tax free (exceeding this 10% exemption limit, discounts to a maximum of EUR 500 per year are tax free). As from 2017, some simplifications regarding social security reporting as well as monthly reporting requirements regarding the contribution base for each employee will be introduced (with a six month period of rolling up without penalties being granted). The benefit in kind from the private use of company cars with CO2 emissions of 120g/km or more is to be raised from 1.5% to 2% of acquisition cost (maximum EUR 960). The draft Bill
Direct Taxes does not foresee any benefit in kind for electric cars (company cars with low emissions, i.e. with emissions of less than 120g/km, will be subject to a step-by-step decrease until FY 2020 of 4g a year). Further amendments with regard to wage taxes Automatic takeover of special expenses in the worker s mandatory tax assessment (e.g. church contribution and donations) Implementation of preferential treatment for those moving to Austria to promote science and research Implementation of 20% fixed income related expenses for expatriates (with a cap of a maximum amount of EUR 2,500) Increase of the real estate capital gains tax and other amendments with regard to the taxation of real estate At present, capital gains from the disposal of real estate are taxed at a rate of 25%. In future, the tax on real estate capital gains will increase to 30% for individuals. 2 At the same time the inflation discount will be abolished for so called new real estate property, i.e. real estate property acquired after 30 March 2002. Due to these changes in the legislation the capital gains tax on real estate will increase in total between 1.2 fold and a maximum of 2.4 fold. In contrast, the offsetting of losses with income from rentingis to be expanded, meaning that losses can be offset upon request over a period of 15 years. In case the taxable person applies for standard tax treatment (i.e. full taxation subject to the Austrian income tax system), incomerelated expenses can be considered as from FY 2016 onwards. With regard to the depreciation of buildings, a single depreciation rate of 2.5% is to become applicable to the business sphere. Providing evidence of a shorter depreciation rate is still possible, with the general depreciation rate of 2.5% otherwise being applicable. Different depreciation ranges, e.g. 2% or 3%, have to be adjusted to the new uniform depreciation basis. Maintenance expenses to be depreciated over 10 yerars until now is to be spread over 15 years for residential buildings in future, irrespective of whether the building falls within the business sphere or the private sphere. If developed land is acquired at a lump sum price, the draft Bill stipulates that only a proportion of 60% can be attributed to the building and can therefore be depreciated without the provision of evidence. In line with current administrative practice, a depreciation of 80% could until now be attributed to the building without such provision of evidence. Offsetting of tax losses For atypical silent partnerships (partnerships without any individual partner) any offsetting of losses is to be limited to the partnership contribution. As from the beginning of FY 2016, these losses are only to be distributed to the partnership in the amount evidenced in Attachment II, Equity for tax purposes. Attachment II of the atypical silent partnership consists mainly of contributions and shares in profits of the silent partners. Any further losses can only be offset with subsequent gains and contributions ( Wartetaste ). Further tax implications in this regard are still unclear. A further amendment in connection with the offsetting of losses applies to cash-based accounting. As from FY 2016 onwards, the unlimited carryforward of losses also applies to cashbased accounting. The sole condition for the unlimited loss carry-forward is that the books are recorded properly. This measure seeks to introduce expanded book-keeping and record obligations (which is also applicable to income for leasing and letting as well as to other income). Repayment of equity The current draft Bill of the tax reform leads to a restriction of the current de facto options regarding the qualification of distributions of retained earnings, which could be either qualified as dividend distribution or as repayment of equity for tax purposes. In future, the qualification for tax purposes of a distribution as repayment of equitywill only be possible subordinate to a qualification as dividend distribution. A special ranking order for the use of distributions will be inserted into Austrian tax law. In future, it is not only equity account for tax purposes (which shows the equity for tax purposes) that has to be kept evident, but also the level of internal financing of the company. The term internal financing means the aggregate sum of the gains or losses of the financial statements under Austrian GAAP over the years. It will no longer be necessary to keep evident sub-accounts for the equity account for tax purposes. A reorganizational difference which results from the difference between the book value and the fair market value upon a step-up of received assets upon a qualifying reorganizationis to be evidenced in a separate account for tax purposes. In case of a sufficiently positive level of internal financing, the distribution is deemed to be a dividend distribution for tax purposes. In case of a negative or insufficiently positive level of internal financing and, at the same time, a positive status of equity, a repayment of equity will be deemed for tax purposes If the distribution is neither covered by the level of internal financing nor by the status of contributions and there is a difference resulting from a step-up upon a reorganizatio, the distribution is deemed to be a repayment of equity for tax purposes. This amendment to 4 (12) of the Austrian Income Tax Act will be applicable for Financial Years starting after 31 July 2015. The level of internal
Direct Taxes financing will have to be determined for the first time as at the last balancing sheet date before 1 August 2015. Reorganization differences resulting from a step-up in course of reorganizations resolved after 31 May 2015 are to be shown explicitly in the equity account for tax purposes. Austrian withholding tax rate The implementation of the 2015 Tax Reform Act will also mean the withholding tax rate being raised from 25% to 27.5% for income from capital investments. The withholding tax still remains at 25% with respect to interest on savings and other receivables from banks. This implies that a withholding tax of 27.5% is applicable to dividends, capital gains and interest on debt securities as well as profit from derivatives. In general, this increase will also be applicable to income from investment funds and real estate property funds and therefore taxed in future with 27.5% withholding tax. Nonetheless the draft Bill does set out important exemptions. If the recipient of the income on capital investments is an Austrian company, the withholding tax rate still amounts to 25% withholding tax (which equals the Austrian corporate income tax rate of 25%), unless the company is tax exempt for withholding tax purposes under Austrian law. The increased withholding tax rate of 27.5% is likely to be applicable to cash flows as from 1 January 2016. The increase of the withholding tax rate to 27.5% requires an amendment to the Austrian Final Taxation Act a constitutional act and therefore necessitates a two thirds majority in the Austrian Parliament in order to be approved. Other planned amendments to the Austrian Income Tax Act To curb moonlighting or illicit work, especially in the construction industry, the draft Bill foresees the following measures: Prohibition of deduction for payments with regard to the provision of construction services in the amount of EUR 500 or higher, which have been paid in cash Prohibition of the deduction of wage taxes on the construction site paid in cash An other amendment relates to the educational premium which will be abolished. The research premium is to be increased from 10% to 12%. g.karatas@at.pwc.com +43 1 501 88-3336 claudia.pranckl@at.pwc.com +43 1 501 88-3359 AG Kokott maintains that Austrian goodwill amortisation scheme is not in line with freedom of establishment and does not constitute illegal State aid (C-66/14) On 16 April 2015, Advocate General Kokott ( AG ) advised the European Court of Justice (ECJ) to rule that the exclusion of foreign EU group members of an Austrian tax group from the goodwill amortisation scheme was not in line with the freedom of establishment. The AG furthermore argued that the scheme does not constitute illegal State aid. Facts and circumstances For share acquisitions before March 2014, the Austrian Corporate Income Tax Act (CITA) offered tax groups the opportunity to amortize the goodwill resulting from the purchase of Austrian group members with an active business. Also in 2014, the Austrian Administrative High Court (VwGH) referred two questions with regard to the goodwill amortisation scheme for a preliminary ruling to the ECJ. The Court raised the question whether the exclusion of foreign EU group members from the scheme was in line with the freedom of establishment and whether the scheme constituted illegal State aid for the beneficiaries of the scheme. Opinion of the AG According to the AG Kokott the exclusion of foreign EU group members from the amortisation scheme restricts the freedom of establishment. Since the AG found the domestic and the crossborder case comparable, she examined whether there was any justification for the restriction. The AG rejected a justification on the grounds of the coherence of the Austrian tax system because the goodwill amortization scheme was even not open to taxpayers which opted for tax liability of their participations in foreign EU group members according toart. 10 No. 3 CITA. Since there were no other justification grounds the AG came to the conclusion that the goodwill amortisation scheme infringes the freedom of establishment. With regard to the State aid assessment, the AG modified the traditional selectivity examination scheme, where one has to first identify the normal taxation approach ( derogation approach ). Rather, according to her, it is important to establish whether comparable legal and factual situations are treated differently and whether this different treatment leads to a selective advantage for certain industries or undertakings ( comparability approach ). 3
Direct Taxes The AG states that the goodwill amortisation scheme, by excluding foreign EU group members, treats taxpayers in comparable legal and factual situations differently. However, as the scheme covers all sorts of domestic companies, it does not favour certain industries or undertakings and therefore it is not qualified as being selective. Consequently, the AG came to the conclusion that the goodwill amortisation scheme does not constitute illegal State aid. The AG s opinion here follows the approach of the General Court which was recently developed in relation with the pending Spanish goodwill amortisation (see C-20/15 P and C-21/15 P). Way forward The opinion of the AG provides an important indication on how the ECJ could qualify the Austrian goodwill amortisation scheme. Austrian tax groups with foreign EU group members (acquisition before 1 March 2014, with an option for taxation) should, if not already done, examine their tax positions and assess whether they could benefit from the goodwill amortisation scheme or not. richard.jerabek@at.pwc.com +43 1 501 88-3431 nikolaus.neubauer@at.pwc.com +43 1 501 88-3723 Withholding tax charge in connection with hidden profit distributions In its judgment on 3 October 2014, the federal tax court concluded based on Art. 95 (4) No. 1 AITA that withholding taxes in the case of hidden profit distributions have to be charged directly at the level of the shareholder who receives the hidden profit distribution and not primarily at the level of the distributing company. In this regard the Austrian Ministry of Finance released guidelines on 30 March 2015 to change the administrative practice as follows. As of now, withholding tax in the case of hidden profit distributions has to be charged directly at the level of the shareholder of the distributing company, unless special circumstances cause the tax authority to claim the distributing company by a notice of liability. This generally requires an appropriate explanation from the tax authorities. Typical reasons for charging the distributing company directly or additinally could be: Withholding tax is uncollectible at the level of the shareholder (e.g. inability to pay) Withholding tax is not definitely uncollectible at the level of the shareholder but there is reasonable doubt about the collectibility (additional claim for the distributing company) Administrative economics (e.g. a large number of shareholders, maybe also in the case of foreign shareholders) In case of an additional claim for the distributing company to pay the withholding tax, two different situations are possible: If the shareholder pays the taxes, the obligation for the distributing company to pay the withholding tax expires. If the company pays the taxes, the obligation for the shareholder to pay the withholding tax expires, but any liability for interest on late tax payment remain unchanged at the level of the shareholder. hannes.rasner@at.pwc.com +43 1 501 88-3622 benjamin.fassl@at.pwc.com +43 1 501 88-3436 Recent group-related case law General comments In Austria, affiliated companies can form a tax group with the effect that the income of all group members are taxed on a consolidated basis at the level of the group parent. The High Administrative Court ( Court ) has recently dealt with several questions regarding the group taxation regime. 4 Application of the credit method in a tax group In the first case (2011/15/0112, 30.10.2014), the Court addressed the question on how to apply the credit method within a tax group when the group parent pays foreign (withholding) tax and has a negative stand-alone result when the overall group income is positive. In line with previous jurisdiction regarding the credit of foreign taxes paid by group members, the Court held that both the group parent s stand-alone result as well as the overall group income had to be (sufficiently) positive in order to allow a foreign tax credit. In the second case (2012/15/0002, 27.11.2014), a tax group wanted to credit foreign taxes of an earlier pe-
Direct Taxes riod which due to a negative group income could not be credited when they were paid. In line with earlier jurisdiction in non-group cases, the Court held that such a tax credit carry-forward was not possible under Austrian domestic law and could not be based on a DTC either. Group taxation and liquidation In its 2011/13/0008 (26.11.2014) decision, the Court held that an insolvent company which had been put into liquidation could not become the parent of a tax group because under the Austrian CITA, special (beneficial) rules apply during the liquidation period. The Court argued that it would contradict these rules if solvent group members were included in this special tax regime. t.schneider@at.pwc.com +43 1 501 88-3728 veronika.daurer@at.pwc.com +43 1 501 88-3212 Indirect Taxes Draft report on the 2015 tax reform VAT and real estate tax In addition to the changes in income tax, the Bill of the 2015 Tax Reform Act foresees changes in the field of VAT and real estate tax. VAT With regard to VAT, the draft Bill foresees the increase of the reduced VAT rate of 10% or 12% to 13% while also providing extensions to the input tax deduction. In order to avoid loss of tax revenue, the cash register and the receipt issuing obligation were introduced. Increase of the reduced tax rate Apart from the objects referred to in Annex 2 of 10 VAT Act (for example, living animals, flowers, objects of art), the tax rate for the following services will also be increased to 13%: Hotel accommodation and similar such services Revenues from artist activities Revenues which are associated with the operation of swimming pools, theatres, music and singing performances, museums, films and circuses Entrance to sports events Services of youth, education, training and recreation centres to individuals under 27 The taxable transportation of individuals by aircraft The direct supply of wine by the actual producer The increase in the tax rate should apply to sales and transactionsoccurring after 31 December 2015. The tax rate for hotel accommodation should be increased only from 1 April 2016 onwards if the income was not completely recognised prior to 1 September 2015 and the services are executed after 31 March 2016. For the sale of (musical) theatre tickets, museum tickets, etc., the tax rate should be increased from 1 January 2016 if the fees have not been fully recognised before 1 September 2015 and the services are carried out by 31 December 2015. Input tax deduction For companies applying the actual taxation ( Ist-Besteuerung ) and whose sales have not exceeded EUR 2 million in the previous tax period, the requirements for the input tax deduction were the performance of the services, the issuance of the invoice and also the execution of the payment itself. What s new: If the recipient charges the VAT pursuant to 215(4) Austrian Fiscal Code to the company providing the services), then the recipient will be deemed equal to the person for which debit taxation applies, meaning therefore that no payment is due for the input tax deduction. Passenger cars and estate cars are generally considered as not being acquired for the company, therefore the input tax deduction is not possible. However, exceptions do exist for certain businesses such as driving schools and taxi operators. What s new: In relation to passenger cars and estate cars which are entirely electrically or electrohydraulically driven, it is possible for the entrepreneurs to claim the input tax deduction. The deduction is capped at the income tax luxury tangent (currently EUR 40,000) and is not applicable if the vehicle cannot be primarily attributed to the company. Cash register obligation Companies whose sales exceed EUR 15,000 per year and whose sales are predominantly effected by cash transactions should register all cash receipts individually using the electronic cash register or cashier system. Cash transactions are transactions in which the consideration is made in cash, with a debit or credit card, vouchers or similar means. The details and facilities should be established by a decree. For the purchase of new cash registers there should be the option of an advance depreciation of up to EUR 2,000 or an acquisition premium amounting to EUR 200. Receipt issuing obligation Regardless of the VAT invoicing obligation, entrepreneurs must issue a receipt to the person who makes a cash payment. This person has to accept the receipt and keep it until outside the business premises. The entrepreneur has to make a copy and keep it for over seven years. The document must contain the following information: Clearly identifiable name of the entrepreneur Usequential number to identify the business case 5
Indirect Taxes Date of the document issuance Amount and the standard commercial description of the goods supplied or the nature and scope of other services Amount of cash paid, it being sufficient that this amount is determined mathematically from the document entries. Real Estate Tax The draft Bill provides for significant changes in the field of real estate tax which will be applicable for acquisitions of land after 31 December 2015. Whereas transfers with consideration remain taxed at 3.5% on the purchase price, the real estate tax for transfers without consideration is no longer measured according to the triple standardvalue, but rather according to the so-called land value. The land value is derived from the market value and should be defined more accurately in adecree. The draft of the Tax Reform Act also provides for changes with regard to the tax rate. In case of a purchase without consideration, the real estate tax will in future be determined based on a graduated taxation: the first EUR 250,000 will be subject to 0.5%, the next EUR 150,000 will be subject to 2%, with 3.5% applying to anything beyond this amount. The graduated taxation also applies in the instance of operational transfers which are made without consideration; here a tax allowance amounting to EUR 900,000 (previously EUR 365,000) is to be considered (capped at 0.5% of property value). Purchases made partially with consideration (when the consideration amounts to more than 30% but not more than 70% of the land value) are to be separated into transfer with and without consideration when determining the real estate tax. The preferential treatment for the transfer of agricultural and forest land within the family and through inheritance should remain unchanged (unit value as the tax base; tax rate 2%); with regard to agricultural and forestry operational transfers, the tax allowance amounting to EUR 365,000 remains. Reorganisations and consolidation of shares (in future already from the consolidation of 95% of the shares and also by partnerships) will be taxed at 0.5% of the land value. g.karatas@at.pwc.com +43 1 501 88-3336 andre.gusmao@at.pwc.com +43 1 501 88-3361 Stamp duty update Transfer of contracts and asset deals Recent rulings of the Austrian Supreme Administrative Court and the Independent Financial Senate have dealt with the issue of stamp duties due to transfer of contracts and asset deals. It was in dispute whether these transactions have to be qualified as assignments within the meaning of the Austrian Stamp Duty Act. If so, as a consequence stamp duty on assignments would have to be considered. Transfer of contracts The transfer of a contract represents a combination of the assignment of rights and the assumption of obligations. This action is performed through a single act by which the transferee replaces the retiring party and enters into the contract including its entire contractual status. Further, the transferee is authorised to enforce any decision-making rights which were belonging to the retiring party. Content or legal identity of the former contractual relationship are not to be affected thereby. 6 According to the Supreme Administrative Court, the decisive issue as to whether or not stamp duty accrues in the context of the transfer of a contract is whether the transferor can transfer its contractual position without the further consent of the other party. If this other party has agreed to a transfer of the contract in advance, the transfer of the contract by the retiring party to the transferee will be subject to stamp duty. If, however, the transfer would be realised by the retiring, the joining and the remaining party through an agreement uno actu, no assignment should be assumed. Provided this condition is met, the transfer has to be treated like the underlying contract for stamp duty purposes. Stamp duty will only be triggered if the underlying contract as such is a stampable transaction. Asset deals In the course of an asset deal, tangible as well as intangible assets are transferred from the seller to the purchaser. The business as an entirety of assets, liabilities and other production factors cannot be seen as an intangible asset. In this respect the asset sale and purchase agreement is not subject to stamp duty for assignments according to the latest judgment of the Independent Financial Senate. Besides that, stamp duty can be an issue if the asset sale and purchase agreement includes a provision to assign all or certain business related intangibles. In this case stamp duty for assignment may accrue. The Senate states that the essential parameter for the purpose of evaluating the liability for stamp duties is the content of the respective agreement. Generally, unless otherwise agreed, the transfer of rights and liabilities linked to
Indirect Taxes the respective business is governed by Article 38 of the Austrian Commercial Code. As under this provision the transfer of business related intangibles is forced by law, no assignment should be assumed. Therefore the transfer of the rights and liabilities within the scope of Article 38 of the Commercial Code cannot be qualified as an assignment for stamp duty purposes and the asset sale and purchase agreement should not trigger stamp duty. However, if the parties agree on the transfer of intangibles in this regard, and such agreement goes beyond the scope of Article 38 of the Commercial Code, an assignment within the meaning of the Austrian Stamp Duty Act is realised and stamp duty accrues. Nevertheless, no assignment is to be assumed where an asset sale and purchase agreement specifically provides for the assignment of intangibles in order to specify the scope of the business transferred. In conclusion, it can be seen that the issue as to whether or not stamp duty due to an assignment in connection with asset deals accrue depends on the specific contractual wording of the respective agreement. Providing proper contractual drafting it should hence be a sustainable legal view that no stamp duty falls due, but an element of risk still remains. georg.zehetmayer@at.pwc.com +43 1 501 88-3227 thomas.pfeifenberger@at.pwc.com +43 1 501 88-3681 Austrian Ministry of Finance releases new guidance on unilateral advance pricing agreements Legal On 23 December 2014 the Austrian Ministry of Finance issued an information letter relating to unilateral advance pricing agreements (APAs) which sets out a testing scheme which the tax authorities are to pursue in order to assess whether such agreements foster unwanted tax practices of multinational enterprises (MNEs). The testing scheme comprises the following aspects: Economic substance of activities performed in Austria Foreign relations Evidence of unwanted tax planning Economic substance The acceptance of a tax structure outlined in an APA application requires there to be at least some economic substance. Hence, the applicant has to show that the Austrian unit has sufficient real and monetary assets to (potentially) provide the value added which is allocated to it according to its functional and risk profile. Besides, the transfer pricing outcomes have to be in line with the Austrian as well as with the OECD Transfer Pricing Guidelines. Foreign relations With regard to the applicability of double tax treaties, Austria has to observe its obligations to inform the other countries involved: It is mandatory to inform other EU Member States about a unilateral APA. A third country may need to be informed on the basis of information exchange provisions in a double tax treaty or other tax information exchange agreements. Evidence of unwanted tax planning The information letter lists several indications of inappropriate tax structures: Extraordinary returns Flow-through entities not providing any value-added Entities located in low-tax countries only performing low-value adding functions In transparent ownership structure Dummies Bribery, money laundering General The Austrian Ministry of Finance emphasised that the assessment of a tax structure outlined in the application for a unilateral APA is always to be based on a holistic approach. The mere fact that differences compared to the other country s legislation or administrative practices may generate tax advantages cannot automatically lead to the conclusion of inappropriate tax practices. Nevertheless, the tax structure has to comply with Austrian tax legislation and Transfer Pricing Guidelines. Conclusion The testing scheme of unilateral advance pricing agreements (APAs) issued by the Austrian Ministry of Finance standardises the administrative procedure and reduces the room for negotiations which may have been prevailing in the past. The clarifications reflect the current developments at EU as well as OECD level which put more and more emphasis on economic substance and foster the exchange of information as well as the transparency of crossborder structures. sandra.staudacher@at.pwc.com +43 1 501 88-3230 knopp.johannes@at.pwc.com +43 1 501 88-1699 7
Austrian Tax Facts and Figures Taxation of corporations Corporate income tax rate (Basis adjusted statutory accounts) 25% Dividend withholding tax 25% Witholding tax on licences/royalties 20% Interest witholding tax 0% Significant allowances Research & Development (R&D) (premium in cash) 10% Learning & Education (L&E) (Alternatively premiums in cash: 6%) Double taxation agreements with 89 countries mainly exemption method International participation exemption for holding companies Conditions: Investments >10%, 1 year holding Dividends and Capital gains 0% Dividend EC portfolio (shares) < 10% 0% Thin capitalization rules CFC rules Annual taxable income None None Group taxation valid from January 2005 Consolidation of tax losses with taxable profits Conditions: Qualifying participations > 50% Group agreement and agreement on allocation of tax cost Foreign participations if EU-resident or third countries with comprehensive assistance agreement Losses of foreign participations may be offset against profits of group leader up to 75% Income Tax Effective Tax Rate Marginal Tax Rate to 11,000 0 0% 0% over 11,000 to 25,000 over 25,000 to 60,000 (Income - 11,000) x 5,110 14,000 (Income - 25,000) x 15,125 35,000 up to 20% Non-deductible expenses (examples) Long-term accruals 3.5% per year Interest and royalties paid to lowtaxed group companies Interest of dept-push down Tax loss carry forwards Losses may be carried forward for an indefinite period of time Usage of tax losses: 75% of taxable income 0-20.44% 36.50% + 5,110 20.44-33.73% 43.21% over 60,000 (Income - 60,000) x 50% + 20,235 > 33.73% 50% Social security on monthly earnings up to 4,650 Employer s share up to 21.63% Payroll related taxes approx. 8.0% Employee s share up to 18.07% Income cap for social security contributions, social security totalisation agreements with various states Contacts PwC Österreich GmbH Wirtschaftsprüfungsgesellschaft Erdbergstraße 200, 1030 Vienna Austria Tel. +43 1 501 88-0 www.pwc.at Tax Partners: Monika Berndl ext. 3064 Peter Draxler ext. 27 1 Herbert Greinecker ext. 3300 Peter Hadl ext. 8003 2 Bernd Hofmann ext. 3332 Aline Kapp ext. 3044 Rudolf Krickl ext. 3420 Kurt Lassacher ext. 200 3 Peter Perktold ext. 3345 Thomas Steinbauer ext. 3639 Thomas Strobach ext. 3640 Christine Weinzierl ext. 3630 Christof Wörndl ext. 3335 1) +43 732 611750-ext. 2) +43 316 825 30-ext. 3) +43 662 2195-ext. We encourage feedback on the newsletter and the content. Equally, we welcome any of your thoughts on topics that you would like to see addressed in future issues. Visit our website for archived Austrian Tax News: www.pwc.com/at/taxnews Value added tax in line with the 6 th EU directive Standard rate 20% Reduced rate (Food, rent, public transportation etc.) 10% VAT refund for foreign enterprises available up to June 30 of the following year and for EU enterprises up to September 30 of the following year. Other taxes Real estate transfer tax 3.5% Capital tax 1.0% Stamp duties - Assignment agreements - Rent agreements - Suretyship agreements 0.8% 1.0% 1.0% Copyright and Publisher: PwC Österreich GmbH Wirtschaftsprüfungsgesellschaft, Erdbergstraße 200, 1030 Vienna, Austria Editor: Christof Wörndl, christof.woerndl@at.pwc.com The above information is intended to provide general guidance only. It should not be used as a substitute for professional advice or as the basis for decisions or actions without prior consultation with your advisors. While every care has been taken in the preparation of the publication, no liability is accepted for any statement, option, error or omission. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.