AUSTRIA Trends and Developments Contributed by: Markus Fellner, Paul Luiki and Peter Blaschke, Fellner Wratzfeld & Partner
rate affiliation) – can opt for special tax treat - ment. These shares must be transferable only with the employer’s consent (restricted transfer - ability) and may be received either free of charge or for a maximum consideration equal to their nominal value. This special tax treatment means that the shares are only considered as received at the time they are sold or in certain other special cases, such as a transfer back to the employer, termination of the employment relationship or the removal of the transfer restriction. Additionally, 75% of the income from the sale of the shares can be taxed as other compensation at a fixed tax rate of 27.5%, provided that the employment rela - tionship has lasted for at least two years and the receipt occurs at least three years after the initial issuance of the start-up employee participation to the employee. Corporate Digitalisation Act 2023 (GesDigG 2023) The Corporate Digitalisation Act 2023 ( “Digitali- sation Act” ) was enacted in Austria to implement Article 13i of EU Directive 2019/1151 to prevent individuals convicted of certain economic crimes from holding executive positions in capital com - panies. Key features of the Digitalisation Act 2023 are the following: • Disqualification due to criminal convictions: Individuals who have been convicted of specific economic offences (eg, embezzle - ment, tax fraud) and sentenced to more than six months of imprisonment are automatically disqualified from serving as managing direc - tors or board members for three years. • Affected positions: The disqualification applies to managing directors of limited liabil -
ity companies and board members of stock corporations and co-operatives. • Automatic exclusion and resignation obliga- tion: Once a conviction becomes final, dis - qualification takes effect automatically. Exist - ing executives must resign within 14 days. If they fail to do so, they will be removed from the Commercial Register by court order. How - ever, acts of representation carried out by the disqualified authorised representative body remain effective. • EU-Wide information exchange: Austria’s Commercial Register Court can request information through the Business Registers Interconnection System (BRIS) to verify if an individual is disqualified in another EU or EEA country. Similarly, Austria must respond to inquiries from other member states. This law enhances corporate integrity and trans - parency by ensuring that individuals with rele - vant criminal records cannot hold key leadership roles in Austrian capital companies. Grace Period Act The Grace Period Act was introduced in Aus - tria to facilitate the transfer of businesses with - in families while increasing legal and planning security for successors. It allows natural persons to make an “accompanied business transfer” if they intend to transfer their business or com - pany shares to relatives. The transferring person must declare in an application to the tax authori - ties that the business or company shares shall be transferred to one or more beneficiary rela - tives within two years of submitting the respec - tive application. As part of this process, a tax audit will be initi - ated for previously unexamined periods. The aim is to identify and minimise potential tax risks at an early stage.
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