AUSTRIA Law and Practice Contributed by: Raphael Holzinger, Julia Hochreiter, Matthias Jancura and Claudia Synek, Grant Thornton Austria
In the event that the arm’s length values applied in the context of the implementation of a trans - fer pricing method constitute a range, it can be deduced that the adjustment will invariably result in a value that falls within the arm’s length range, as determined on the basis of ex ante knowl - edge.
in accordance with national procedural regula - tions. 4.3 Cost Sharing/Cost Contribution Arrangements In Austria, cost sharing/cost contribution arrangements are a generally recognised con - cept. The ATPG typically adheres to the OECD Guidelines with regard to such arrangements and, consequently, there are no specific regula - tions in place. 5. Adjustments 5.1 Upward Transfer Pricing Adjustments The ATPG permits both “primary adjustments” and “secondary adjustments” , which are pos - sible after the filing of the tax return. However, from a tax perspective, the execution of the adjustments must follow the rules of the FFC. In the event that the profits of a domestic group company belonging to a multinational group are found to have been increased as a result of a violation of the arm’s length principle, as out - lined in Section 6 paragraph 6 of the ITA (in con - junction with Article 9 of the OECD Model Tax Convention on Income and Capital), this consti - tutes the primary adjustment. Typically, “primary adjustment” whether occurring within Austria or internationally – should result in “correspond- ing adjustment” in instances where Austria is involved, with the objective being to prevent the
4. Intangibles 4.1 Notable Rules
The ATPG generally adheres to the OECD Guide - lines with regard to intangibles. Hence, there are no special rules in place. It is important to note that the term “intangible” as used in transfer pricing regulations should not be understood in the traditional legal, tax or accounting sense. Rather, it should be inter - preted independently for the purposes of the ATPG and the OECD Guidelines. Furthermore, it is crucial to consider the legal and economic owner of an intangible separately. That is to say, the DEMPE (development, enhancement, main - tenance, protection, and exploitation) functions The ATPG generally adheres to the OECD Guide - lines concerning hard-to-value intangibles; con - sequently, there are no specific regulations in place. On the basis of this, if the tax authorities can confirm the reliability of the information on which the ex ante price agreement is based, no corrections should be made on the basis of ex post results. Furthermore, it is only possible to make a trans - fer pricing adjustment (primary adjustment) for a hard-to-value intangible transaction in Austria must always be taken into account. 4.2 Hard-to-Value Intangibles
occurrence of double (non-)taxation. 5.2 Secondary Transfer Pricing Adjustments
There are rules on secondary transfer pricing adjustments in the ATPG. Indeed, in the event of a breach of the arm’s length principle in cross- border transactions between associated enter -
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