AUSTRIA Law and Practice Contributed by: Raphael Holzinger, Julia Hochreiter, Matthias Jancura and Claudia Synek, Grant Thornton Austria
However, in addition to bilateral and multilat- eral APAs, “rollback” is possible – provided that comparable facts and circumstances existed in previous periods. For instance, the mutual agreement procedure can be used to address transfer pricing issues that have occurred in the past, and APAs can be initiated to implement a solution for the future; both can be conducted simultaneously. However, Article 25 of the OECD Model Tax Convention on Income and Capital stipulates that the application to initiate a bilater - al and multilateral mutual agreement procedure can be submitted within three years of the threat of double taxation becoming apparent. Further, Article 6 paragraph 1 of the EU Arbitration Con - vention also stipulates that the application for the initiation of a mutual agreement procedure (or any subsequent arbitration proceedings) must be submitted within three years from the date on which the threat of double taxation was consolidated. 8. Penalties and Documentation 8.1 Transfer Pricing Penalties and Defences Failure to comply with the obligation to file a (correct) CbCR, or the submission of a late fil - ing, may result in penalties of up to EUR25,000 for gross negligence and up to EUR50,000 for intent. In the absence of mandatory transfer pricing documentation, no penalty is incurred. However, non-compliance with the obligation to disclose information relevant to the assessment of taxes according to the FFC to the ATA upon request may result in a penalty of up to EUR5,000. Moreover, in instances where adequate transfer pricing documentation is absent, the ATA might
be authorised to estimate the tax basis. These estimates do not bear the characteristics of a penalty; however, they may nevertheless prove disadvantageous for the taxpayer. Additional penalties might arise in case of trans - fer pricing adjustments. 8.2 Transfer Pricing Documentation The TPDA is responsible for the regulation of transfer pricing documentation for Austrian busi - ness units. Within the scope of the TPDA, the preparation of transfer pricing documentation (master file and local file) as well as the prepara - tion and filing of a CbCR or CbCR notification is mandatory. Consequently, the Austrian rules regarding transfer pricing documentation are in accordance with the OECD Guidelines. The obligation to file a CbCR or CbCR-notifica - tion arises in instances where a group has gener - ated revenue in excess of EUR750 million during the previous business year. The threshold for the obligation to prepare a master file and local file is set at revenues exceeding EUR50 million across the two preceding business years. In instances where the ATA request transfer pricing docu - mentation in accordance with the TPDA, the taxpayer is typically granted a deadline of 30 days to provide a response after the request for submission of the documentation. In the event that the thresholds for the TPDA are not fulfilled, the filing of a CbCR/master file and local file is not mandatory – although mas - ter files and local files can be submitted, usually upon request during the course of a tax audit, in order to fulfil the general documentation obliga - tions according to the FFC. The documentation is required to “provide an expert third party with an overview of the business transactions within a reasonable period of time” (as the reasonable
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