On 7 October 2021, the Austrian Ministry of Finance published the updated Austrian Transfer Pricing Guidelines (Austrian Guidelines) 2021. The Austrian Guidelines 2021 are an essential interpretative aid for the application of the arm’s-length principle in business relationships between associated companies and permanent establishment situations.
The Austrian TPG 2021 (VPR 2021) addresses the following important issues:
- It takes into account all the important issues raised in the OECD TPG 2017, e.g. the control of risk concept, guidelines on location savings and group synergies, guidelines on intangible assets (including the approach for intangible assets that are difficult to value);
- The 2021 guidelines introduced the arm´s length test for loan transactions also includes the debt-equity ratio. For the analysis, typically ratings are necessary. Standalone ratings may need to be corrected to reflect the implicit group support.
- Introduction the group-internal service approach with low added value and changes to the chapter on cost-sharing agreements.
- The chapter in the Austrian guidelines regarding intangible assets is updated in accordance with the amendments to chapter VI of the OECD transfer pricing guidelines. Accordingly, the Austrian 2021 guidelines now also include explanations of the concept of DEMPE (development, enhancement, maintenance, protection, and exploitation), which is decisive for the allocation of income from the transfer or use of intangible assets.
- It also includes the previous separate guideline on transfer pricing documentation. This guideline provided guidance for those companies which fall under the legal obligation to prepare transfer pricing documentation in Austria. Additionally, the Austrian 2021 guidelines now also clarify the documentation requirements for all those companies which do not fall under the legal obligation.
- The reporting obligation under DAC6 regarding the transfer pricing hallmarks is also briefly referred to in the guidelines.
