AUSTRIA Law and Practice Contributed by: Raphael Holzinger, Matthias Jancura and Claudia Synek, Grant Thornton Austria
7.7 Duration of APA Cover Unilateral advance rulings as well as bilateral and mul - tilateral APAs or mutual agreement procedures typi -
Besides unilateral advance rulings, express answer service (EAS) requests can also be filed to the Federal Ministry of Finance. In principle, the EAS is similar to the unilateral advance ruling; however, the result of an EAS can never be legally binding, and good faith is the only principle to be observed. As with the unilat - eral advance ruling, an EAS cannot provide concrete answers to a concrete transfer price under concrete facts and circumstances and can only answer legal questions. There is no charge for an EAS. It is also noteworthy that the Federal Ministry of Finance gener - ally responds promptly to EAS requests. It is evident that bilateral and multilateral APAs both result in a degree of legal certainty that surpasses that of the unilateral advance ruling/EAS, given that the tax authorities of the partner state have already been engaged. In contrast, the unilateral advance rul - ing/EAS cannot be regarded as having any binding authority over the tax authorities of the partner state. 7.5 APA Application Deadlines The timeframe for submission of an APA, whether bilateral or multilateral, is contingent upon the spe - cific provisions outlined in the relevant double taxa - tion convention. However, it should be noted that this deadline exclusively pertains to prospective trans - actions. Furthermore, the initiation of a unilateral advance ruling is permissible under specific circum - stances – namely, the presence of new information that emerges prior to the execution of the transaction in question. To illustrate, it is conceivable to submit a unilateral advance ruling request in FY 2025 for a transaction (transfer pricing setting) that will transpire for the first time in FY 2026. 7.6 APA User Fees The fees for the unilateral advance ruling are depend - ent on the taxpayer’s turnover and range from EUR1,500 to EUR20,000 per case. It should be noted that additional consulting fees may be incurred for such unilateral advance ruling. No financial compensation is levied for bilateral and multilateral APAs or mutual agreement procedures, with the exception of consulting fees that may be incurred.
cally cover periods of three years. 7.8 Retroactive Effect for APAs
A unilateral advance ruling as well as a bilateral and multilateral APA generally have no retroactive effect. Nonetheless, in addition to bilateral and multilateral APAs, a “rollback” is possible – provided that com - parable facts and circumstances existed in previous periods. For instance, the mutual agreement proce - dure can be used to address transfer pricing issues that have occurred in the past, and APAs can be initi - ated to implement a solution for the future; both can be conducted simultaneously. However, Article 25 of the OECD Model Tax Convention on Income and Cap - ital stipulates that the application to initiate a bilateral and multilateral mutual agreement procedure can be submitted within three years of the threat of double taxation becoming apparent. Further, Article 6 para - graph 1 of the EU Arbitration Convention also stipu - lates that the application for the initiation of a mutual agreement procedure (or any subsequent arbitration proceedings) must be submitted within three years from the date on which the threat of double taxation was consolidated. 8. Penalties and Documentation 8.1 Transfer Pricing Penalties and Defences Failure to comply with the obligation to file a (correct) CbCR, or the submission of a late filing, may result in penalties of up to EUR25,000 for gross negligence and up to EUR50,000 for intent. In the absence of mandatory transfer pricing docu - mentation, no penalty is incurred. However, non- compliance with the obligation to disclose information relevant to the assessment of taxes according to the FFC to the ATA upon request may result in a penalty of up to EUR5,000. Moreover, in instances where adequate transfer pric - ing documentation is absent, the ATA might be author - ised to estimate the tax basis. These estimates do not
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