AUSTRIA Law and Practice Contributed by: Philipp Baubin and Stefan Weber, Weber & Co
Austrian documentation commonly includes lim- itation language to address these risks.
to be qualified as loan obligations (eg, obliga- tions under hedging arrangements). Accordingly, it became a market standard to exempt these obligations from Austrian security coverage. Care also has to be taken in relation to abstract guarantees and sureties. While an abstract first demand guarantee (including a waiver of all defences) is not subject to stamp duty, a sure- tyship ( Bürgschaft ) or an assumption of debt as co-debtor ( Schuldübernahme ) triggers stamp duty. Stamp duty may therefore be avoided by not recording transactions in written form (eg, oral contracts, factual acceptance of written offers, etc). As this is impracticable in the context of larger financing transactions, the following risk mitigation measures have been established as a market standard in Austria. • The most important avoidance structure regarding finance transactions is to set up documentation abroad ( Auslandsbeurkund - ung ) to prevent the existence of an Austrian connection. For this reason, the finance documentation should include a respective stamp duty warning on the cover page, a stamp duty clause that allocates the stamp duty risk between the parties and a clause stipulating the place of performance to be outside of Austria. • With regard to guarantees there are two measures to mitigate the risk of triggering Austrian stamp duty: (a) making sure that the guarantee is an abstract, first demand guarantee ( abstrak- ter garantievertrag ) pursuant to Section 880a second case of the Austrian Civil Code; and (b) limiting the guaranteed obligations to obligations and liabilities under the loan
8. Tax Issues 8.1 Stamp Taxes
The Austrian Stamp Duty Act ( Gebührengesetz or GebG) specifies certain legal transactions that are subject to a stamp duty ( Rechtsgeschäftsge - bühr ) of between 0.8% and 1% of the security amount. These legal transactions include certain security agreements that are typically entered into in connection with financing transactions (eg, sureties ( Bürgschaften ), assignments ( Zes- sionen ), assumptions of debt ( Schuldübernah - men, Schuldbeitritte ) and mortgage deeds ( Hypothekarverschreibungen )). An essential precondition for Austrian stamp duty to be applicable is that the relevant legal transaction is evidenced by a written document signed in, or brought into, Austria. The Austrian administration’s understanding of “written con- tract” is very broad and not only covers paper contracts but also contracts concluded by elec- tronic means (eg, electronically signed emails). Stamp duty may also be triggered by references to any finance documents that contain stampa- ble transactions or refer to stampable transac- tions in another written document (so-called substitute documentation or Ersatzbeurkund - ung ). A mere reference in any form (eg, letter, paper, email, fax) may therefore be sufficient to trigger that risk. Since 2011, an exemption from stamp duty applies to a security agreement that is concluded to secure loan obligations. However, this exemp- tion may not apply in the case of obligations set out in the loan documentation but are not
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