AUSTRIA Law and Practice Contributed by: Clemens Philipp Schindler and Mohamed Hemdan, Schindler Attorneys
Austria has also concluded seven tax information exchange agreements with Andorra, Gibraltar, Guern - sey, Jersey, Mauritius, Monaco, and St Vincent and the Grenadines. 7.2 Exchange of Information Clauses in Tax Agreements Austria fully participates in the exchange of informa - tion with other jurisdictions on the legal basis outlined in 7.1 Legal Framework for Administrative Co-Opera- tion . In particular, under Article 26 of the OECD Model Tax Convention regarding the exchange of information between competent authorities, which is followed by most Austrian DTTs, information may be exchanged automatically, spontaneously (without a prior request – eg, in the course of an administrative procedure) or upon request in relation to a specific case. 7.3 Other Forms of International Tax Collaboration Austria participates in the OECD’s International Com - pliance Assurance Programme (ICAP). With regard to joint cross-border tax audits, Austria has implemented EU Directive 2011/16/EU on admin - istrative co-operation, thereby providing a legal basis for joint as well as simultaneous tax audits. 8. Mutual Agreement Procedures and Arbitration 8.1 Availability and Legal Basis Austria maintains comprehensive mutual agreement procedure (MAP) mechanisms to resolve cross-border tax disputes. The primary legal basis for the MAP is Austria’s net - work of DTTs, which generally follow the OECD Model Tax Convention and therefore contain provisions cor - responding to Article 25 governing the MAP. Another legal basis is the EU Dispute Resolution Direc - tive, which has been implemented in Austria through the EU Tax Dispute Resolution Act (EU-BStBG). The Directive provides a structured dispute resolution mechanism for intra-EU cross-border tax disputes arising from differing interpretations or applications
of DTTs or the EU Arbitration Convention, and ulti - mately allows for a binding decision if the compe - tent authorities fail to reach an agreement. Once a taxpayer submits a request under this Act, access to the MAP under the relevant DTT or the EU Arbitration Convention is barred for the same dispute. 8.2 Application Deadlines In general, taxpayers have three years from the date of the first notification of a measure that results or may result in taxation that does not comply with the relevant treaty (eg, issuance of the relevant tax assessment) to request a MAP. This time limit applies both under Article 25 of the OECD Model Tax Conven - tion and under the EU Tax Dispute Settlement Act, whereas certain DTTs concluded by Austria contain deviating deadlines. 8.3 Mandatory Binding Arbitration In some cases, Austria’s DTTs also contain arbitra - tion clauses similar to Article 25 paragraph 5 of the OECD Model Tax Convention. These clauses allow for the binding resolution of disputes where the relevant authorities are unable to reach a mutual agreement. Taxpayers may also rely on the EU Arbitration Conven - tion for disputes relating to transfer pricing. While the MAP under the EU Arbitration Convention is similar to that under DTTs, its key feature is the automatic and mandatory referral of the case to an arbitration panel if the competent authorities fail to reach an agree - ment within two years. The arbitration panel’s opinion is binding and ultimately ensures the elimination of double taxation. In contrast, arbitration under a DTT is only available where the respective DTT expressly provides for it. Furthermore, as mentioned under 8.1 Availability and Legal Basis , the EU Tax Dispute Settlement Act provides for a MAP that can result in a binding deci - sion being made in cases of intra-EU cross-border tax disputes that arise from different interpretations or applications of DTTs or the EU Arbitration Convention. Unlike the EU Arbitration Convention, the scope of the EU Tax Dispute Settlement Act is broader, as it does not only apply to transfer pricing disputes.
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