AUSTRIA Law and Practice Contributed by: Raphael Holzinger, Julia Hochreiter, Matthias Jancura and Claudia Synek, Grant Thornton Austria
9.4 Impact of BEPS 2.0 The Austrian government has expressed a pref - erence for a multilateral solution to the issues at hand, as evidenced by its active involvement in OECD deliberations concerning the digitalisa - tion of the economy. Consequently, the initia - tives under discussion are expected to exert a substantial influence on both domestic tax leg - islation and national guidelines. The implementation of Pillar Two was adopted by the EU as a directive (EU Directive 2022/2523) in December 2022. The Austrian government has implemented the directive within the jurisdiction of the Minimum Taxation Act ( Mindestbesteu- erungsgesetz , or MinBestG). The regulations of the MinBestG are applicable to financial years beginning on or after 31 December 2023. 9.5 Entities Bearing the Risk of Another Entity’s Operations In Austria, an entity is generally permitted to bear the risk of another entity’s operations and this may take the form of a guarantee, surety, or letter of comfort. However, it is imperative that these are in accordance with the arm’s length principle. That is to say, the transaction must be conducted through a written agreement that leaves no doubt as to its content and a corre - sponding remuneration based on the rationale of the OECD risk framework ( “control over risk” ). Consequently, the transaction must also be car - ried out between third parties under comparable circumstances.
period of time is not defined, the period may depend on the facts, circumstances and com - plexity of each case). In accordance with the provisions stipulated by the TPDA and the FFC, the setting-up of transfer pricing documentation is permitted in both the German and English languages, as outlined in the ATPG. However, it should be noted that – for documentations derived from the FFC – there may be instances where translation of specific components of the documentation into German is required, contingent upon the request of the relevant parties. 9. Alignment With OECD Transfer Pricing Guidelines 9.1 Alignment and Differences It is evident that the ATPG generally adheres to the OECD Guidelines. Although minor discrep - ancies may be observed, these are deemed to be insignificant. 9.2 Arm’s Length Principle The arm’s length principle under Austrian tax law is, in general, based on the arm’s length principle as per Article 9 of the OECD Model Tax Conven - tion on Income and Capital – ie, they follow the OECD Guidelines. 9.3 Impact of the Base Erosion and Profit Shifting (BEPS) Project The OECD’s BEPS project exerts a considerable influence on domestic transfer pricing regula - tions – a fact that is evidenced by Austria’s gen - eral reliance on the OECD’s initiatives. In par - ticular, the ATPG makes continuous reference to the OECD Guidelines and the OECD’s transfer pricing initiatives.
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