AUSTRIA Law and Practice Contributed by: Clemens Philipp Schindler and Mohamed Hemdan, Schindler Attorneys
• income from agriculture and forestry; • income from self-employment; • business income;
taxed Profit Rule (UTPR) ( Sekundäre Ergänzungssteu- er ) largely only applied to financial years beginning on or after 31 December 2024. 4.4 Specific Features or Deviations of Pillar Two The Austrian implementation of Pillar Two is based on the EU Pillar Two Directive (2022/2523), which in turn builds on the OECD Global Anti‑Base Erosion (GloBE) Model Rules – ie, there are no notable devia - tions from the OECD framework, apart from minor deviations in the specific design of the implementa - tion and its application (eg, Austria implemented Pillar Two by means of a separate law rather than amending the Austrian Corporate Income Tax Act). 4.5 Digital Services Tax Austria already took unilateral action on digital taxa - tion in 2019 by introducing the Digital Tax Act ( Digi- talsteuergesetz ). This legislation imposes a 5% tax on online advertising services provided for consideration within Austria, but only for corporations surpassing defined turnover thresholds from such services. 5. Anti-Avoidance and Anti-Evasion Measures 5.1 Definition and Identification of Tax Fraud, Evasion, Tax Avoidance and Abusive Schemes Tax fraud and tax evasion constitute distinct fiscal criminal offences that are punishable under the Aus - trian Fiscal Criminal Act, provided that the respective criminal offence elements are fulfilled. Tax Evasion Tax evasion is defined in Section 33 of the Austrian Fiscal Criminal Act and comprises several alterna - tive offence variants, whereas all variants share the requirement of intent (either conditional intent or knowledge) and a reduction of taxes, which may also be only temporary. According to this Section 33, tax evasion occurs: • where a person intentionally reduces taxes by violating fiscal obligations of notification, disclosure or truthfulness;
• employment income; • income from capital; • income from letting and leasing; and • other income defined under the Austrian Income Tax Act. Income derived from these categories can gener - ally be subsumed under the provisions of the OECD Model Tax Convention – ie, Austria does not provide for different types of income not addressed within the OECD Model Tax Convention. In cases where certain income taxed under Austrian tax law does not clearly fall within the distributive rules of the OECD Model Tax Convention (eg, annuity payments from private life insurance policies), such income is typically treated as falling within Article 21 of the OECD Model Convention (Other Income). 4. OECD/G20 Global Tax Reform 4.1 Pillar One – Amount B Austria has not (yet) implemented the Streamlined Approach for baseline marketing and distribution activities (Amount B) into its domestic law. There - fore, the rules relating to Amount B will not apply to baseline marketing and distribution activities in Aus - tria. However, Austria is committed to accepting the outcome of applying Amount B to such activities in covered jurisdictions with which it has a DTT. The list of these covered jurisdictions is published and main - tained by the OECD. 4.2 Pillar One – Amount A In general, the Austrian government has consist - ently supported the BEPS project at all times, which includes Pillar One Amount A, having agreed to the 2021 “Two-Pillar Solution” and authorising negotia - tions for a multilateral convention (MLC) in 2022. 4.3 Pillar Two The Austrian MoF has published its draft for a Pillar Two implementation law, the Austrian Minimum Taxa - tion Act ( Mindestbesteuerungsgesetz ), which came into force on 31 December 2023. However, the Under -
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