AUSTRIA Law and Practice Contributed by: Markus Fellner, Stefan Sallat and Florian Henöckl, Fellner Wratzfeld & Partner Rechtsanwälte GmbH
4. Tax 4.1 Withholding Tax Repayments of principal under loan transactions are not subject to withholding tax. Interest payments made to lenders are not subject to withholding tax as a general rule. Rather, such pay- ments will have to be taken into account for the pur- poses of the (corporate) income tax of the lender. 4.2 Other Taxes, Duties, Charges or Tax Considerations There are certain types of security arrangements – such as suretyships ( Bürgschaften ) and assignments ( Zessionen ) – which, on a standalone basis, would be subject to stamp duty; there is an exception, however, when these transactions are entered into for purposes of securing loan obligations (which are, themselves, exempted from stamp duty). If debt funding is structured by way of the acquisition of loan receivables (on a commercial basis), which Austrian banking law qualifies as “factoring”, then such assignment may also be subject to Austrian stamp duty (applied at a rate of 0.8% to be calculated on the basis of the consideration for the acquisition of such loan). 4.3 Foreign Lenders or Non-Money Centre Bank Lenders Generally, repayments of principal under loan transac- tions are not subject to withholding tax. In addition, interest payments are not subject to withholding tax as a general rule. Rather, such payments will have to be taken into account for purposes of the (corpo- rate) income tax of the lender. If payment of interest is effected, however, to a non-Austrian lender, then withholding tax in the amount of 35% may apply. There are numerous double-taxation treaties conclud- ed between Austria and other jurisdictions, which typi- cally provide for such withholding tax to be consid- ered deductible and/or refundable; even though there is a new OECD model convention in force as from 2017 and such model convention is also applicable to existing tax treaties due to acceptance through the
3.9 Recent Legal and Commercial Developments
There are no recent legal or commercial developments that have required changes to the legal documenta- tion. 3.10 Usury Laws There are no regulatory limitations on interest charged to customers (borrowers). However, there are certain basic limitations under Aus- trian civil law prohibiting “usury” ( Wucher ). There is a requirement, however, that such interest (agreements) may only then be considered prohibited and unen- forceable if and to the extent that the agreed interest rate is clearly disproportionate to market terms and conditions and an agreement to that effect could only be reached (on record) due to the weakness, predica- ment or inexperience of the borrower. In the retail seg- ment (consumer loans), various information duties and formal requirements apply. In commercial lending, relevant examples are almost non-existent. 3.11 Disclosure Requirements There is no rule or law regarding the disclosure of cer- tain financial contracts. However, pursuant to the Austrian Banking Act (BWG) banks are required to publish their annual financial statements, as well as their consolidated financial statements. The BWG contains some specific rules on the illustration of financial statements of credit institutions. Banks have to report on a regular basis (depending on the reporting obligation quarterly or semi-quarterly) to the FMA as supervisory authority. These reports are not necessarily publicly available unless it is required by other provisions. In addition, banks must meet several disclosure requirements under the CRR (as amended by CRR II), for example a description of the main characteristics of the equity instruments issued and the required disclosure of remuneration policies and practices.
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