Corporate Tax 2010 - BMR Advisors

Wolf Theiss Attorneys-at-Law
Austria
5.4 Is there any special relief for reinvestment
No such relief is available for corporations.
6 Branch or Subsidiary
6.1 What taxes (e.g. capital duty) would be imposed upon the
formation of a subsidiary
A capital contribution tax of 1% is levied on contributions of capital
to an Austrian company. Such tax can in practice easily be avoided.
6.5 Would a branch benefit from tax treaty provisions, or some
of them
Under Austrian tax law, a branch is not considered as a taxable
entity for corporate income tax purposes and thus it is also not
considered as a person entitled to treaty benefits.
However, if a branch qualifies as a permanent establishment within
the meaning of double taxation treaty, the treaty’s nondiscrimination
provision may be relevant.
6.6 Would any withholding tax or other tax be imposed as the
result of a remittance of profits by the branch
Austria
6.2 Are there any other significant taxes or fees that would be
incurred by a locally formed subsidiary but not by a
branch of a non-resident company
No, there are not.
There is no withholding tax levied on the remittance of profits by
the branch to the head office.
7 Anti-avoidance
6.3 How would the taxable profits of a local branch be
determined
There are no special rules on the determination of the taxable profit
of a local branch. In general, the taxable profit of a local branch
shall be determined in accordance with the same rules as those
applicable to resident companies.
6.4 Would such a branch be subject to a branch profits tax (or
other tax limited to branches of non-resident companies)
There is no branch profit tax or similar tax limited to branches. If
a branch constitutes a permanent establishment of a non-resident,
the profit attributable to such permanent establishment is subject to
25% corporate income tax.
7.1 How does Austria address the issue of preventing tax
avoidance For example, is there a general anti-avoidance
rule or a disclosure rule imposing a requirement to
disclose avoidance schemes in advance of the company’s
tax return being submitted
There is a principle of Austrian tax law that stipulates that taxpayers
are free to arrange their economic affairs in the manner they deem
most beneficial to themselves, which includes choosing those
structures and approaches that incur the least tax costs.
Nevertheless, Austrian law contains a general anti-abuse provision,
pursuant to which tax liability cannot be avoided by abusing legal
forms and methods available under civil law. If such an abuse has
been established, the tax authorities may compute the tax as it
would have been had such abuse not occurred. However, abuse of
law can be ruled out if the taxpayer manages to validly present at
least one non-tax reason why the transaction was structured the way
it was.
ICLG TO: CORPORATE TAX 2010
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