AUSTRIA Law and Practice Contributed by: Clemens Philipp Schindler and Katharina Schindler, Schindler Attorneys
relief for lower incomes. However, part of the infla - tion adjustment mechanism (“cold progression”) will be suspended, slightly limiting automatic tax relief. A new tax-free employee bonus of up to EUR1,000 per year is planned, along with increases to tax-free allow - ances for special payments like holiday and Christmas bonuses. Regarding real estate and capital taxation, share deals in real estate have become subject to stricter taxa - tion as of mid-2025, and foundations will face higher entry and interim taxes (both introduced by the 2025 Budget Accompanying Act). The government also plans to adjust property gains taxation, especially in rezoning cases. Overall, the reforms aim to provide targeted relief, simplify procedures and close existing loopholes – although many measures are subject to budget availability and will be implemented gradually through 2027. 1.6 Transparency and Increased Global Reporting Preventing Abuse/Loopholes in Tax Law Under Austrian tax law, a distinction has to be made between legal structures (accepted for tax purposes) and illegal structures (not accepted for tax purposes). A transaction is not accepted for Austrian tax pur - poses if it either: • violates special provisions of Austrian tax law; or • infringes the Austrian general anti-avoidance rules. Austrian tax law contains two provisions with general anti-avoidance rules. Section 22 of the Federal Fiscal Code The first provision is Section 22 of the Federal Fiscal Code, which is based on the “anti-abuse” doctrine that prohibits the abuse of law (as established by the jurisprudence of the Austrian Supreme Administrative Court). According to this provision, an abuse of law occurs if – with regard to the targeted goal – a legal structure has an unusual and inappropriate charac - ter, and can be explained only by the intention of tax avoidance. Whether the structure remains meaningful without the tax minimisation effect must be assessed. Note that tax rulings can be obtained regardless of
whether or not Section 22 of the Federal Fiscal Code applies. Section 21 of the Federal Fiscal Code This second provision is based on the “substance over form” doctrine and provides that, for the pur - pose of evaluating tax structures under an economic approach, the formal appearance is not essential but the actual economic substance of the facts and cir - cumstances is essential. Common Reporting Standard, DAC6 and FATCA Austria has adopted various legislative measures with regard to the Common Reporting Standard, which were often driven by or were part of corresponding EU Directives and/or Regulations. The exchange of infor - mation with third countries is therefore often based on double taxation treaties, and a robust legal framework for tax information exchange exists within the EU. With respect to DAC6, Austria has recently adopted legislation to implement reporting obligations for potentially aggressive tax planning schemes ( EU- Meldepflichtgesetz , or EU-MPfG). The scope of the Austrian EU-MPfG corresponds to the text of DAC6, stating that an intermediary is required to report only cross-border tax arrangements. Domestic tax arrangements that relate to taxes set out in DAC6 are not subject to the EU-MPfG, so are not reportable. In 2014, Austria (like many countries worldwide) entered into an Intergovernmental Agreement with the USA (the US Foreign Account Tax Compliance Act, or FATCA). This Agreement means that all domestic financial institutions will have to report specific data on persons and accounts, and the custody account details of persons that are subject to US tax to the IRS. Public Beneficial Ownership Registers Like other EU member states, Austria implemented a public beneficial ownership register ( Register der wirtschaftlichen Eigentümer ) in 2018 on the basis of an EU Directive. The register was open to the general public until 2022, when the CJEU ruled that the pub - lic access provisions violated certain EU fundamental rights (eg, respect for private life). Under the current rules, certain authorised parties are entitled to inspect
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