CONVINUS Global Mobility Alert Week 13.2022

Austria / March 31, 2022
Change in the creation of construction and
assembly permanent establishments
In most cases, one does not want to establish a permanent establishment through foreign activities. Therefore,
this is one of the points that should always be carefully examined for every foreign engagement, as this could lead
to several consequences (e.g. accounting obligations, tax obligations on the company and employee side).
In a consultation agreement between Austria and Germany in March 2021, it was agreed, among other things, that
the construction lot regulation would no longer apply.
Until March 2021, it applied in Austria that a construction and assembly permanent establishment was established
if the construction work lasted for more than 12 months. This was not dependent on the calendar year. In addition,
if part of the construction work was completed, for example with an acceptance protocol, only this period was
considered. If this period was less than 12 months, no permanent establishment was established. If new
construction work was completed at a later date, this was then viewed as a new period.
As of March 2021, this interruption will not be taken into account in Austria any longer. This means that
intermediate non-working periods will be taken into account when calculating the 12-month period.
In the first instance, this regulation applies to situations between Germany and Austria and means that a
construction site will be established much more quickly.
However, the Austrian side has already indicated that they would like to handle this in the same way as all other
states.
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