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Austrian Government Proposes New Exit Tax and Equity Contributions Repayment Rules — Orbitax Tax News & Alerts

On 24 November 2015, the Austrian government submitted to parliament a draft of the Tax Law Amendment Act 2015, which includes New Exit Tax and Equity Contributions Repayment Rules.

New Exit Tax Rules

The government proposes amending the exit tax rules by replacing the current exit tax deferral option with a payment in installments option in cases where Austrian business assets are transferred to an EU or EEA Member State with which Austria has entered into an information exchange and enforcement agreement. If elected, installments would be made over 7 years for fixed assets and 2 years for current assets. If the assets are subsequently transferred to a non-EU/EEA country, the outstanding amount of exit tax would become due.

Repaying Equity Contributions

The government proposes reverting the rule introduced in the Tax Reform Act 2015/16 ({News-2015-07-28/A/2- previous coverage}), which requires companies to first distribute operating profits before repaying equity contributions. If the proposal is adopted, companies would again be allowed to repay equity contributions, which are exempt from withholding tax, before distributing profits, which are subject to 25% withholding. In order to first repay equity contributions, a positive amount of tax equity would be required.