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Austrian Parliament Approves Tax Law Amendment Act 2015 — Orbitax Tax News & Alerts

On 17 December 2015, Austria's Federal Council (Bundesrat) approved the Tax Law Amendment Act 2015, which includes new exit tax and equity contributions repayment rules. This completes the parliamentary process as the National Council (Nationalrat) approved the legislation on 9 December 2015.

New Exit Tax Rules

The exit tax rules are amended by replacing the 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 are 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 becomes due.

Repaying Equity Contributions

The rule introduced in the Tax Reform Act 2015/16 ({News-2015-07-28/A/2- previous coverage}) that requires companies to first distribute operating profits before repaying equity contributions is repealed. However, certain conditions apply:

  • In order to repay equity contributions, a positive amount of tax equity is required; and
  • In order to distribute operating profits, a positive amount of internal financing is required.

The repayment of equity contributions is exempt from withholding tax, while the distribution of profits is subject to 25% withholding.