AUSTRIA Law and Practice Contributed by: Clemens Philipp Schindler and Mohamed Hemdan, Schindler Attorneys
9. Dispute Prevention 9.1 Advance Pricing Agreements
9.2 Other Mechanisms The most relevant route to obtain tax certainty in rela - tion to international tax matters in Austria is through advance tax rulings under Section 118 of the Austrian Federal Fiscal Code, since such rulings are legally binding on the tax authority, provided that the facts and legal framework presented by the taxpayer are complete and accurate. These rulings are generally only available for matters expressly listed in the law, which include international tax issues. Taxpayers can also obtain a short opinion through an Express Reply Service on matters of international tax law (EAS) provided by the Austrian MoF, which is made publicly available. However, these opinions are issued on an anonymous and non-legally binding basis. Austrian tax law also allows certain taxpayers (com - panies with a turnover above EUR40 million) to apply for a co-operative compliance programme in the form of a so-called “accompanying control” ( begleitende Kontrolle ), which is intended as an alternative to tax audits. This programme involves regular communica - tion with the tax authorities, thereby enhancing legal certainty and planning security, where more extensive information than rulings may be provided. However, it also requires increased disclosure from participating companies.
Since 2011, taxpayers in Austria have been able to apply for legally binding advance tax rulings under Section 118 of the Austrian Federal Fiscal Code, in order to obtain a unilateral advance pricing agreement (APA) which specifies transfer pricing criteria. To ensure consistent treatment abroad, taxpayers can also seek bilateral or multilateral APAs. Bilateral APAs are based either on the MAP provisions of the DTTs (pursuant to Article 25 of the OECD Model Tax Convention) or on the EU Dispute Resolution Directive (implemented in Austria through the EU Tax Dispute Settlement Act). Bilateral APAs are usually requested by the taxpayer. However, taxpayers have no legal right to a successful MAP. Taxpayers may also obtain informal, unilateral “good faith” rulings in circumstances where the above options are not available.
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