1E9Ct5D

holding companies will enjoy tax exemption both for foreign dividends and capital gainsderived from the disposal of shareholdings in foreign subsidiaries.iiCommissionaire StructuresCommissionaire structures are accepted as such by Austrian law and administrative practice.They enjoy the same tax status as any other commercial activity. For value-added taxpurposes, commissionaires are treated as distributors. To manage high-risk investments, inparticular investments in Russia, emerging economies and other high-risk jurisdictions, a basecompany in a tax haven or a low tax jurisdiction will facilitate the managing of risks.This may be achieved by an Austrian company acting as a commissionaire for a foreigncompany, which takes the full commercial risk on its books.iiiInternational HoldingsCompanies in no-tax or low-tax jurisdictions can be legitimately established for ultimateholding companies of international groups.This will be considered by the Austrian tax authorities as a legitimate use and not as treatyshopping.To have the legitimate use accepted, the purpose of the offshore holding must be fullydisclosed to the tax inspector.ivRulings in AdvanceThe tax-planning effects of an international holding structure can be submitted to theInternational Tax Department of the Austrian Federal Ministry of Finance on a no-name basisfor a preliminary ruling. Such rulings can be obtained in two to four weeks. In addition, abinding ruling can be obtained from the local Corporate Tax Office, prior to implementation ofthe structure. Binding rulings are subject to an administrative fee.vEU Parent Subsidiary DirectiveDividends paid by an Austrian company to its corporate shareholders resident in othermember countries of the European Union remain untaxed both at the sending and receivingends by virtue of the EU Parent Subsidiary Directive guaranteeing freedom of movement ofcapital inside the Internal Market. By carefully choosing the parent shareholding company ofthe Austrian company, the overall tax burden on both business profits and on the dividendsof the ultimate shareholders may be reduced.VII Group TaxationIf a profitable Austrian company is holding Austrian or foreign subsidiaries their losses can beconsolidated with the profits of the holding company. The following conditions have to bemet:Application for forming a tax group to be filed with the Tax Office and signed by allmembers of the group.The holding company as the head of the group has to have a controlling participationin the subsidiaries of 50% or more of the equity.The group has to be established for a minimum of three years and in the case thatthe group is terminated earlier, all tax advantages are reversed.The losses of the subsidiaries to be utilised by the group head have to be thesubsidiary’s own losses.- 28 -