Survival of the Richest

Austria
Taxation
Tax treaties
Austria has its own model treaty, which largely follows the
OECD’s Model Treaty. 221
At the moment, Austria has 41 tax treaties with developing
countries, which is slightly below average among the
countries covered in this report. 222 Although Austria does
not have any ‘very restrictive’ treaties with developing
countries, 223 the average rate of reduction of developing
country tax rates through the treaties is relatively high
compared to the other countries covered by this report. 224
This is a cause for concern, and strengthens the need
for Austria to conduct a spillover analysis, to assess the
impacts of Austrian treaties on developing countries.
Unfortunately, the government has not announced any plans
to conduct such an assessment.
Harmful tax practices
According to a study on aggressive tax planning structures,
Austria has nine indicators, compared to the EU average of
10.6. Austria does not have a patent box. However, the study
found one active indicator, which is that Austria allows a tax
deduction for deemed interest costs on interest-free intercompany
debt, without ensuring that the deducted amount is
taxed by another country. 225
There has been a formal procedure for obtaining unilateral
and multilateral advance pricing agreements (APAs) in
Austria since 2011. 226 Austrian tax authorities provide
information regarding advance tax rulings to foreign
tax authorities if there is an agreement on exchange
of information. 227 However, data from the European
Commission shows that Austria had four advance pricing
agreements in force at the end of 2014, but that this dropped
to zero by the end of 2015. 228
Global solutions
Austria has not made any official statement on the proposal
to establish an intergovernmental UN body on tax.
Conclusion
The high level of financial secrecy in Austria remains a
matter of serious concern. In particular, the so-called
Treuhand can provide opportunities for tax evaders and
other criminals to conceal their assets. It is also worrying
that the Austrian government opposes public access to
information about where multinational corporations do
business and what they pay in taxes (public country by
country reporting).
Austria’s amount of treaties with developing countries
is slightly below average among the countries covered
by this report. Although Austria does not have any ‘very
restrictive’ treaties with developing countries, the average
rate of reduction of developing country tax rates through the
treaties is relatively high compared to the other countries
covered by this report. This is a persuasive reason for
Austria to conduct a spillover analysis, to assess how its
tax treaties impact developing countries. Unfortunately,
however, no such analysis is currently planned.
On a positive note, Austria only has few harmful tax
practices and data from the European Commission suggests
that Austria’s number of advance pricing agreement
dropped to zero by the end of 2015.
Survival of the Richest • 53