AUSTRIA Law and Practice Contributed by: Clemens Philipp Schindler and Katharina Schindler, Schindler Attorneys
space. Based on this decision, a 2020 court decision in Austria stated that the digital estate is inheritable and that the heirs have the right to access the digital estate. However, the mere surrender of the access data does not yet entitle the heir to dispose of the digital estate; usage contracts of the service providers have to be observed. It is increasingly common to include information on digital accounts in last wills. 3. Trusts, Foundations and Similar Entities 3.1 Types of Trusts, Foundations or Similar Entities The Austrian legal system does not provide for trusts. However, it is possible to establish a private founda - tion ( Privatstiftung ) (inter vivos or mortis causa), which essentially serves the purposes established by the settlor in the foundation documents (charity, wealth preservation, support of family members, etc). The private foundation is a legal entity that enables the settlor (or several settlors) to regulate the inter - nal organisation and purpose of the foundation. Due to its legal personality, the private foundation has full ownership of its assets. Private foundations are often used for the purposes of succession planning and the preservation of family assets. The private foundation is established by a foundation deed ( Stiftungsurkunde ) and endowed with assets, which are managed by a foundation board ( Stiftungsvorstand ) consisting of at least three members. This management is super - vised by a foundation auditor ( Stiftungsprüfer ). Both the foundation board and the foundation auditor are mandatory bodies of the private foundation. Addi - tional bodies may also be implemented, such as a supervisory board. Depending on the settlor’s will, an Austrian private foundation may serve personal purposes such as estate planning and the preservation of family wealth, and it may also be established to serve charitable pur - poses. An Austrian private foundation may be imple -
mented to avoid succession disputes that might lead to the breaking up or division of a family business or estate. Furthermore, the preservation of art collections or historical buildings may be obtained by establishing a private foundation. 3.2 Recognition of Trusts Neither the Austrian Individual Income Tax Act nor the Austrian Corporate Income Tax Act contain explicit provisions dealing with trusts. Austrian civil and tax law is not familiar with the concept of a trust. Very few court cases exist and not a lot of guidance has yet been provided by the Austrian tax authorities concern - ing the qualification of (foreign) trusts or the tax con - sequences in Austria for beneficiaries of foreign trusts. Therefore, trusts are not used as an estate planning vehicle in Austria. In this context, it should be noted that Austria is not part of the Hague Trust Convention and that there are currently no known plans for this to change in the future. However, in many cases, foreign trusts may have a nexus to the Austrian tax jurisdiction – eg, when an Austrian tax resident is the settlor and/or the benefi - ciary of a trust, or when a foreign trust manages Aus - trian assets. 3.3 Tax Considerations: Fiduciary or Beneficiary Designation From an Austrian tax law perspective, a trust is basi - cally an agreement between a settlor and a fiduciary regarding certain assets. Whether foreign trusts are recognised as a separate legal entity or not depends on whether the income of the trust may be directly attributed to a person according to the general prin - ciples of Austrian income tax law. If the income can be attributed to a person, the trust may not be qualified as a separate taxable entity; in other words, the trust is transparent for tax purposes. If the income cannot be attributed to a person, the trust qualifies as a separate, taxable, non-transparent entity for Austrian tax purposes. According to Austrian tax law, the following qualifica - tions may be distinguished.
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