Austria

Austria: Approves draft bill on reduced air travel tax rates

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The government approved a draft bill amending the air travel tax law on 7 March 2017. The draft bill provides for reduced air travel tax rates. Accordingly, the rates will be reduced from EUR 7 to EUR 3.50 for short distance flights, from EUR 15 to EUR 7.50 for mid-distance flights and from EUR 35 to EUR 17.50 for long distance flights. The reduced rates will apply from 1 January 2018.

The Austrian Ministers Council stated that the decision was taken to increase the attractiveness of Austria as a business and tourism destination, to secure the future of Vienna airport as an international aviation hub and to create jobs and increase economic development.

Austria: Updated the guidance on tax incentives for start-up companies

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The Ministry of Finance updated guidance on tax incentives for start-up companies on 14 February 2017. The incentives for start-up companies are granted if the following requirements are met:

  • A new company has been set up;
  • The company derives business income;
  • The individual controlling the company within 2 years after having been set up has not controlled any other company before;
  • No transfer of an existing company to a new director is involved;
  • No (part of) an existing company has been added to the new company structure in the month in which it was set up or the subsequent 11 months; and
  • No change in legal form of an existing company is involved.

If these requirements are met, an exemption from the following taxes and duties applies:

  • Stamp duties and federal administration fees;
  • Real estate transfer tax payable on the contribution of real estate to the company’s business;
  • Court fees payable on the registration of the company and real estate; and
  • Wage tax reductions for a period of 35 months. After 12 months, the wage tax reduction only applies to the first three employees.

Moreover, exemptions are granted for company transfers if the following collective conditions are met:

  • A company (one-man business or a participation in a partnership or company) has been transferred with or
  • The company is controlled by a new director; and
  • The new director has not been involved in any business activities before.
  • The exemptions included the following:
  • Stamp duties and federal administration fees;
  • Court fees payable upon registration; and
  • Real estate transfer tax if the value of the real estate does not exceed EUR 75,000.

Australia, Austria Social Security Agreement expected to be entered into force

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On 1 March 2017, the Social Security Agreement between Australia and Austria along with its administrative arrangement will enter into force that was signed on 2 August 2016. The agreement and the administrative arrangement will apply from 1 March 2017. From this date, the new agreement and its administrative arrangement will replace the existing agreement of 1992.

Under the Agreement, Australia and the Republic of Austria (Austria) will share responsibility for pensions to people who would not otherwise be entitled because they do not have enough residence in Australia or sufficient periods of contributions to the Austrian insurance scheme. It also helps people who could not otherwise claim because they are living abroad.

The Agreement also reduces costs for businesses operating in both countries through provisions regulating compulsory contributions for seconded workers.  Under the Agreement, seconded employees and/or their employer will generally only be subject to the legislation of their home country and are be exempt from making contributions for the same work under the law of the other country.

What payments does the Agreement cover?

Australia

In relation to Australia, the Acts forming the social security law insofar as the law provides for, applies to, or affects the following benefits:

  • age pension;
  • disability support pension;
  • carer payment;
  • benefits payable to widowed persons; and
  • double orphan pension.

Austria

In relation to Austria, the legislation regarding pension insurance with the exception of the insurance for notaries and with regard to Part II of the Agreement only, the legislation regarding sickness insurance and accident insurance.

  • retirement pension
  • early retirement pension
  • disability pension
  • surviving spouse’s pension
  • orphan’s pension
  • additional amounts for dependent children
  • ‘hiflosenzuschuss’ (helpless person allowance)
  • ‘pflegegeld’ (personal care benefit), and
  • ‘ausgleichszulage’ (supplementary payment).

Protocol to treaty between India and Austria signed

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India and Austria signed a Protocol amending the existing Convention between the two countries for Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income on 6 February 2017 in New Delhi. The Protocol was signed by Shri Sushil Chandra, Chairman CBDT on behalf of India and Mr. Georg Zehetner, Charge d’ Affaires, Embassy of Austria on behalf of Austria.

The Protocol will broaden the scope of the existing framework for the exchange of tax-related information which will help curb tax evasion and tax avoidance between the two countries and will also enable mutual assistance in collection of taxes.

Austria: Announces social security rates for 2017

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The Social Security act of Austria has been amended and published in the Official Gazette on 18 January 2017. The amendment provides that the total social security rate is set at 14.12% for employees not earning more than EUR 425.70 per month.

Austria social security rate for other employees and employers is forecast to stay unchanged at 18.12% in 2017.

Japan and Austria: Agreement in principle on tax arbitration

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The Governments of Japan and Austria have agreed in principle to amend their double taxation avoidance agreement to further promote trade and investment between the two countries. The new agreement would enable arbitration under the mutual agreement procedure to ensure settlement of disputes concerning the application of the treaty. The changes to the agreement will come into force after the completion of the approval process in both countries.

Under this new agreement,  the withholding tax rate at source on investment income (dividends, interest, and royalties) will reduce, and expand cooperation between the tax authorities of the two countries by providing for assistance in the collection of taxes.

Austria-EU: Further details of tax changes

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The Austrian Ministry of Finance on 2 January 2017, published a report on the tax changes that are applicable from 2017.

In addition to the measures already described, further changes regarding ‘EU measures’ are summarised below:

  • Beneficial ownership register: Resulting the adoption of the amendments to the Prevention of Money Laundering and Terrorist Financing Law, a register of beneficial ownership will be set up to implement the Anti-Money Laundering Directive (2015/ 849).
  • Automatic exchange of bank data: Due to the implementation of Directive 2015/2060 repealing the Savings Directive, Austria automatically exchanges bank data with EU member states and third countries. With respect to new bank accounts, all financial institutions are obliged to submit relevant data to the tax authorities for the fourth quarter of 2016 and for other accounts from 1 January 2017. Austria will generally inform the other EU member states about those data at the latest by 30 September 2017.
  •  Automatic exchange of information regarding advance tax rulings: Besides, from 2017, information regarding advance tax rulings is exchanged automatically.