On 14 June 2016, a bill regarding an EU Tax Amendments Act of 2016 (EU-Abgabenänderungsgesetz 2016) was presented to the Austrian Parliament, which contains a number of important changes that will probably enter into force soon.
The main purpose of the draft bill is to implement into domestic law various recent changes to the EU's Directive 2011/16 on Administrative Cooperation ("DAC").
The first item refers to the extension of DAC by Directive 2014/107 to include the automatic exchange of information regarding financial accounts. Pursuant thereto, information regarding interest income, dividends, gross proceeds from the sale of financial assets, other income and account balances shall be exchanged automatically within the EU. This had consequently led to a repeal of the EU Savings Directive 2003/48. The implementation thereof into domestic law is to take place in the EU Withholding Tax Act (EU-Quellensteuergesetz). In this context it should be noted that Austria will cease levying withholding tax on interest payments made to beneficial owners who are individuals resident for tax purposes in another Member State on: (i) 1 January 2017 for all accounts; and (ii) 1 October 2016 for accounts opened on or after 1 October 2016 which are subject to automatic information exchange.
The second item refers to the extension of DAC by Directive 2015/2376 to include the automatic exchange of cross-border rulings and advance pricing arrangements. The implementation into domestic law will take place in the EU Administrative Assistance Act (EU-Amtshilfegesetz). Pursuant thereto, where an advance cross-border ruling or an advance pricing arrangement was issued, amended or renewed after 31 December 2016, Austria will, by automatic exchange, communicate information thereon to the competent authorities of all other Member States as well as to the European Commission, within three months following the end of the half of the calendar year. Where an advance cross-border ruling or an advance pricing arrangement was issued, amended or renewed between 1 January 2012 and 31 December 2016, Austria will similarly communicate information thereon before 1 January 2018 (however, if these were issued, amended or renewed between 1 January 2012 and 31 December 2013, such communication shall take place under the condition that they were still valid on 1 January 2014).
The third item refers to the extension of DAC by Directive 2016/881 to include countryby-country reporting. The implementation into domestic law will take place in a new statute to be called the Transfer Pricing Documentation Act (Verrechnungspreisdokumentationsgesetz). Pursuant thereto, MNE groups with consolidated group revenues of at least EUR 750 million in the preceding fiscal year are required to prepare a countryby-country report ("CbCR"). Such CbCR consists of three parts: an overview of allocation of income, taxes and business activities by tax jurisdiction; a list of all the constituent entities of the MNE group included in each aggregation per tax jurisdiction; and additional information, if relevant. In general, the CbCR has to be filed by the ultimate parent entity of the MNE group if the former is tax resident in Austria; filing has to be done at the latest twelve months after the end of the fiscal year. Within 15 months after the end of the fiscal year, Austria will automatically exchange the CbCRs with the other Member States (or with the signatories of the OECD's Multilateral Competent Authority Agreement on the Exchange of Country-by-Country Reports). Apart from the introduction of CbCRs, the Transfer Pricing Documentation Act will for the first time introduce the obligation of a separate business unit (which is tax resident in Austria and which had revenues of at least EUR 50 million in the two preceding fiscal years) of an MNE group to prepare transfer pricing documentation in the form of a master file and a local file. The master file, on the one hand, should deal with the MNE group's organisational structure; a description of the MNE group's business(es); the MNE group's intangibles; the MNE group's intercompany financial transactions; and the MNE group's financial and tax position. The local file, on the other hand, should include a description of the separate business unit; documentation of significant intercompany transactions; and financial information. Both the master file and the local file will have to be sent to the competent tax office within 30 days of filing the corporate income tax returns.
Finally, the draft bill of an EU Tax Amendments Act of 2016 also contains an important change in respect of income tax: Currently, non-resident individuals are, in general, taxable on interest paid on bank deposits in Austria as well as bonds held in an Austrian securities account, provided that the individuals at hand are not resident for tax purposes in another Member State. This will be changed as of 1 January 2017 insofar as the tax will apply to individuals that are not resident for tax purposes in a jurisdiction with which Austria automatically exchanges information regarding financial accounts.
