On 3 February 2016, the Austrian Ministry of Finance published an EAS ruling dealing with certificates of residency in connection with relief granted under treaty law.
As regards foreign taxpayers having their domicile/habitual abode or legal seat/place of management outside of Austria, domestic tax law entitles Austria to levy (corporate) income tax on Austrian source income. However, applicable double tax treaties (DTTs) may allocate taxation rights differently and may require Austria to (partially) abstain from imposing the domestic rate on such income. In order to adhere to these taxation rules as prescribed by treaty law, there are generally two alternatives: (i) temporarily imposing the Austrian tax rate on the income to be paid to foreign taxpayers and subsequently refunding the Austrian tax; or (ii) granting relief at source by refraining from imposing the Austrian tax rate on the income to be paid to foreign taxpayers.
Relief at source can only be granted when specific record keeping requirements are fulfilled, as provided for in the Ordinance on Relief At Source Due to Double Tax Treaties (DBA-Entlastungsverordnung). Pursuant to the latter, an Austrian payer making a payment of over EUR 10,000 to a foreign payee may grant relief at source if the foreign payee furnishes a certificate of residency. In that context, the Austrian Ministry of Finance recently dealt with a case where an Austrian company paid fees of over EUR 10,000 to a foreign expert for advisory services. The Ministry held that for purposes of granting relief at source it did not suffice that only a photocopy of the certificate of residency had been provided. Rather, the Austrian company had to have the original form at its disposal. As an exception thereto, the transfer of the certificate of residency by electronical means and the subsequent archiving (without transferring the underlying original form) may be sufficient if, e.g., the original form is being used for other purposes for specific reasons.