The Austrian tax climate has felt the impact of both international and domestic changes this year. As in many other countries, the Austrian tax authorities have taken a more aggressive stance as a result of the OECD's BEPS Project. "The implementation of BEPS is the biggest challenge and it [has a] wide scope," said Michael Sedlaczek, head of tax at Freshfields Bruckhaus Deringer.
Implementation of BEPS has been high on the agenda, as in many other jurisdictions, and Austria has brought in the most significant points. The country already has specific provisions to counter hybrid mismatch arrangements as well as measures aimed at limiting the deductibility of interest. It is also one of several jurisdictions committed to binding arbitration, a provision which was largely ignored by Action 14.
On January 27 2016, Austria – along with 30 other countries – signed a tax cooperation agreement to enable automatic sharing of country-by-country reporting (CbCR) information, in line with BEPS Action 13.
Overall, in the past year the Austrian tax market has seen a number of changes which have caused more uncertainty among taxpayers, with more changes to come through the EU. The EU Economic and Financial Affairs Council (ECOFIN Council) reached an agreement on the proposed Anti-Tax Avoidance Directive on June 21 2016. "It's still very early days to comment on implementation in Austria, and some things were already implemented," said Sedlaczek. "Austria already has general anti-avoidance rules, CFC legislation and non-deductibility of certain interest and royalty payments in place."
Although Austria has no statutory CFC rules in place, the equivalent is contained in the Austrian corporation tax act.
As a result of the international focus on transparency, the Austrian tax authorities have also increased their emphasis on the topic. "Tax transparency criteria are getting stricter and stricter. They [the authorities] arm themselves and many clients face regular tax audits and many problems with tax authorities," said Franz Althuber, head of tax at DLA Piper.
Tax advisers report that the authorities are more experienced than in the past and have increased their resources in an attempt to collect more revenue. As a result, taxpayers face a lot of tax criminal law issues and tax disputes. This has caused increased uncertainty in the market and clients are actively seeking advice on their structures.
Another major change has been the amendments to the country's banking secrecy. Austria has historically had a high degree of banking secrecy, like neighbouring Switzerland. This has changed as a further Act was adopted in July 2015, loosening banking secrecy and giving tax authorities more access to banking data. "New regulations were implemented whereby tax authorities have, more or less, full access to banking data, especially if a firm or an individual is suspected [of] tax criminal procedures. Furthermore, banks have to disclose payments from Austrian bank accounts. In fact, it [banking secrecy] doesn't exist anymore," said Althuber.
The Austrian tax market has also seen major domestic changes, as the new tax reform was introduced this year. The reform, which came into effect on January 1 2016, included:
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A This rate applies to distributed and undistributed profits.
B In general, this withholding tax applies to dividends paid to residents and non-residents.
An Austrian corporation is generally required to withhold tax at a rate of 27.5%. However, if the distributing company has evidence of the corporate status of the investor, it may withhold tax at a rate of 25%. Certain dividends paid to Austrian and European Union (EU) companies are exempt from tax. In addition, a reduction in or relief from dividend withholding tax may be possible under double tax treaties.
C This withholding tax applies to non-residents.
D The offset of loss carryforwards against taxable income is limited to 75% of taxable income in most cases.
Hans-Jörgen Aigner and Herbert Buzanich founded law firm Aigner Buzanich, which works solely with Austrian and international tax law. Both partners are attorneys at law and specialise in tax law. Before founding the firm in 2012, Aigner was a principal associate of Freshfields Bruckhaus Deringer for eight years and Buzanich was co-head of Schönherr's tax department. The two partners combine the experience of major international law firms with a lean, straight-forward structure for a more practical and pragmatic approach.
The firm offers services in all areas of tax including M&A, controversy and litigation, finance, VAT and indirect taxes, restructuring and transfer pricing. Aigner Buzanich is praised by its peers as a very strong boutique firm that should be recognised in the market.
Nikolaus Arnold oversees the tax department at Arnold Rechtsanwälte, one of Austria's leading business law firms offering tailor-made solutions to its domestic and international clients. Arnold specialises in tax law, banking and capital markets, corporate law, real estate and IT. The firm's service offering is extensive and includes controversy and disputes, M&A, financial transactions and compliance.
Christoph Urtz is the key contact for the tax team at Baker & McKenzie in Vienna. He specialises in corporate and international tax law, real estate taxation, tax proceedings and financial criminal law.
Before joining Baker & McKenzie's tax office in 2015, Ultz served as chair for the department of tax law at the University of Salzburg and as a lawyer at a leading Austrian law firm. As part of a large international law firm, the team advises multinationals on all aspects of tax law including tax planning, real estate, supply chain management, dispute resolutions and indirect tax. The firm ensures it is up to date with the changing tax environment, updating clients on compliance issues, and hosting a number of specialist workshops and seminars to educate the public.
Baker & McKenzie has 950 tax practitioners, including lawyers, advisers and economists in more than 40 countries.
BDO Auxilia Treuhand supports clients on all tax developments, both domestic and international. On the consulting side, the services include corporate restructuring, cross-border transactions and tax planning.
The team in Austria is led by managing partner Reinhard Rindler. The firm offers basic services including tax returns, the examination of decisions and representation during negotiation, and litigation with the tax authorities. One of the firm's areas of expertise is financial criminal proceedings and the team also assists with audits. Private clients are one of the most important sectors for BDO Auxilia, and the firm's service offering includes wealth planning, capital asset taxation and real estate support. The Austrian office is part of the BDO network and benefits from the international expertise and insight.
Andreas Hable and Christian Wimpissinger oversee the tax department at Binder Grösswang. The firm's team of dedicated professionals has experience in national and cross-border tax matters and advise both national and international companies.
Hable, who joined the firm as an attorney at law in 2001, specialises in tax law, corporate law, M&A, and private clients and entrepreneurs. Wimpissinger joined Binder Grösswang in 2007, became a partner in 2011, and advises on tax law. He also has experience in cross-border restructuring and accounting law advice.
Some of the firm's key service areas include M&A, reorganisations, financing and capital markets transactions and fund structures and tax analysis. It also offers advice on tax criminal law and represents clients before tax authorities and courts.
Hanns Hügel and Gerald Schachner are joint heads of bpv Hügel Rechtsanwälte's tax team of nine dedicated professionals. Hügel, the founding partner and a professor, specialises in M&A transactions, corporate law and arbitration. Schachner is a trained tax adviser and attorney and specialises in international tax law.
The team operates as a full-service tax practice advising on both contentious and non-contentious tax issues, including tax disputes against the Austrian tax authorities, and estate planning, establishment of private foundations and relocation of tax residency. The tax team focuses on M&A and capital market transactions as well as compliance, and advises across all key sectors with particular strength in energy, finance, retail, professional services and real estate.
The tax team at Cerha Hempel Spiegelfeld Hlawati (CHSH) is headed by Johannes Prinz. Working closely with the head of the corporate transactions department, Clemens Hasenauer, Prinz and his team provide clients expertise on the tax-optimised structuring of transactions and have a dedicated tax litigation team to handle tax disputes.
The firm's key practice areas include tax planning and transaction structuring, taxation of groups and corporate reorganisations, international tax law, taxation of financial instruments, transfer pricing and disputes.
Peter Knobl is another important tax partner. He has expertise in banking and finance, capital markets, tax law and banking and insurance supervision law.
CMS Reich-Rohrwig Hainz's tax team advises clients on domestic and international transactions and tax planning. The head of tax, Sibylle Novak, has more than 20 years of experience in national and international taxation and focuses on optimising transactions, M&A, restructurings, private foundations, and private equity and venture capital deals.
Other key members of the tax team include Wolfgang Auf, with expertise in tax matters in relation to Croatia and Slovenia, Daniel Kocab, whose main practice area is corporate law and tax law, and Johannes Reich-Rohrwig, who specialises in litigation and corporate law.
The Deloitte tax team in Austria is headed by Erwin Holzer, who works closely with Michael Weisman, head of international tax and M&A. The department, with 34 partners and 425 other professionals, is one of the biggest tax departments in Austria. Recognised as one of the market leaders, the majority of its clients are large Austrian corporations within the financial services, energy and resources, media and telecommunications, manufacturing, life sciences, consumer goods and public sectors.
The Austrian accounting firm has its own thinktank, called the product development group, which provides tailored solutions and develops scalable tax products.
Deloitte offers a full range of tax services, with a particular focus on specialisation according to its clients' needs. The team recently worked on a distressed debt restructuring coupled with the company's exit from Austria. This included complicated planning to tackle several legal issues and three major tax areas; corporate income tax, capital gains tax, and stamp duty.
Franz Althuber, who has senior experience in international tax law, trust and estate planning, and corporate law, is the head of the DLA Piper Weiss-Tessbach in Austria. The team consists of five tax lawyers and one tax and business criminal law expert, dealing exclusively with tax criminal law matters, and covers a wide range of tax services with one professional working in indirect tax, two in corporate tax, three in disputes and one in tax compliance and accounting.
Althuber advises large domestic and international clients as well as high net worth individuals across all tax areas, including corporate reorganisation, spin-offs and cross-border mergers. He comes recommended by clients, one saying he is pro-active, has profound knowledge and "great fun to work with". The same client said: "DLA Piper for sure ranks among the top tax law firms in Austria."
This year the tax team expanded with the addition of associate Christoph Schimmer, who joined the firm March 1 2016.
Paul Doralt is the head of tax at Dorda Brugger Jordis and joined the firm more than 10 years ago. His key areas of practice are taxation, M&A, structured finance, and trust and estates. The team of three professionals also provides advice in the fields of international tax planning and tax litigation.
Apart from Doralt, the team consists of Martina Znidaric, a senior associate with a CPA and tax adviser qualification, and Katharina Binder, a senior associate with a New York Bar qualification.
Andreas Stefaner leads EY's tax team of accountants, economists and tax specialists. The firm offers a wide range of integrated tax services including tax accounting, international tax, tax controversy, transactions tax, private client services and compliance and reporting. The practice is praised by clients for its all-encompassing approach, offering solutions both domestically and abroad for multinational corporations, medium-sized businesses and private individuals.
"They have very good knowledge and did a really good job," a client said. "The support was brilliant."
Michael Sedlaczek leads the tax team of eight at Freshfields Bruckhaus Deringer. The team offers a full range of services on domestic and cross-border M&A transactions, restructuring and refinancing issues, tax issues under the European law, VAT, transfer pricing, tax disputes and energy tax law issues.
Sedlaczek specialises in financial institutions, family businesses and private clients, which are key areas for the tax department. He works closely with principal consultant Claus Staringer, who primarily deals with transfer pricing and complex tax issues. The team primarily work in corporate and indirect tax, group reorganisations, M&A, compliance with tax disputes, and energy tax law. Its members work in specific industries including gaming and automotive as well as financial institutions.
The firm is praised by clients. One said: "Freshfields Austria is an excellent firm to work with. Advice is clear, consistent and delivered on a timely basis. The tax partner, Michael Sedlaczek, is excellent and the first lawyer I would call for Austrian advice."
KPMG's Austrian tax practice is headed by Hans Zoechling and is one of the leading tax practices in Austria, offering a wide range of tax services. Zoechling specialises in corporate tax, international tax and M&A and works closely with deputy head of tax Thomas Walter, who specialises in corporate tax and reorganisations. Another significant partner at KPMG is Barbara Polster, who is the head of the M&A tax practice and has been with the firm for more than 10 years. She has extensive expertise in international and corporate tax, M&A tax structuring, transfer pricing issues and litigation.
LeitnerLeitner is a tax consulting firm in Central and Eastern Europe offering a wide range of tax services. The Austrian practice is led by a large team of tax professionals, including founding partners Reinhard Leitner and Roman Leitner.
Reinhard is a qualitied auditor and tax adviser with focus on international and corporate tax, estate planning and EU law. Roman, also an auditor and tax adviser, has expertise in criminal tax law, litigation and succession planning. The team works closely with entrepreneurs, corporate groups, public bodies and non-profit organisations.
The services offered include financial reporting and accounting, VAT, real estate, transfer pricing and M&A.
Herbert Greinecker, head of tax at PwC, has more than 25 years of experience as a tax adviser and auditor. He specialises in international and corporate tax advice and planning and is a member of the International Fiscal Association and chamber of auditors.
Tax is a main focus of the global PwC network and the Austrian tax department offers all tax services including basic compliance, bookkeeping and payroll advice.
Twelve-year-old boutique firm SchneideR'S offers integrated tax services such as customs regulations and has clients within the energy, consumer products, manufacturing, and telecommunications industries. Managing director Robert Schneider leads the tax team and advises clients in commercial, energy and customs law and in tax.
Schönherr Attorneys at Law advise domestic and international clients on a range of tax matters, particularly corporate, M&A, and banking and capital market groups. The tax team also offer stand alone tax planning advice and tailor-made tax solutions to fit clients' particular needs.
The main contacts for the tax department are Peter Feyl and Michaela Petritz-Klar. Feyl has been with the firm for 30 years and specialises banking, finance and capital markets, corporate and M&A, and tax law. Petritz-Klar joined Schönherr in 2013 and has wide expertise in tax and corporate and economic issues.
Andreas Baumann is the head of the TJP tax team which comes highly recommended by its clients for its professionalism and knowledge. "I would totally recommend them," said one client, adding that the team was "professional and highly skilled, with great know-how on all topics that we needed".
The tax team consists of three partners, who have been with the firm for more than five years, and 12 other dedicated partners working across the board on a wide range of tax matters. TJP is a tax boutique firm with special expertise on cross-border transactions, M&A, private equity and restructuring. As a spin-off of Wolf Theiss, Schoenherr, KPMG and EY, the team combines knowledge of the leading law firms and Big 4 accounting firms, providing clients with an interdisciplinary approach. Other key partners include Thomas Jungreithmeir, who has more than 25 years of experience and is the head of M&A, restructuring and turnaround, and Hubert Cussigh, head of audits. Another significant team member is Karin Spindler-Simader, who is the authorised signatory. In June 2016, the team expanded with the addition of a new tax manager, Christian Fichtinger.
Niklas Schmidt and Benjamin Twardosz co-head the tax practice at Wolf Theiss. The team consists of eight dedicated professionals and offers a wide range of services including corporate tax advice and restricting, M&A, tax planning for private clients, tax litigation and fiscal criminal law.
Both partners are specialised within their practice area. Schmidt's key focus is corporate tax law including retail, investment funds, stocks and bonds. Another key area of his is financial transactions and private sector work; he often advises private clients. Twardosz works in corporate and international tax law, M&A and litigation, and advises private clients on criminal fiscal law.
With more than 130 lawyers, Wolf Theiss is one of the biggest law firms in Austria and has a solid corporate and banking finance base. The tax practice was launched around 15 years ago and has two main focus areas: companies and private clients. The tax team consists of lawyers and tax advisers to help give clients a deeper insight.
|Tier 1- Austria|
|Tier 2- Austria|
|BPV Hügel Rechtsanwälte|
|Freshfields Bruckhaus Deringer|
|Tier 3- Austria|
|DLA Piper Weiss-Tessbach|
|Dorda Brugger Jordis|
|Tier 4- Austria|
|Baker & McKenzie|
|Cerha Hempel Spiegelfeld Hlawati|
|Schönherr Attorneys at Law|
|Tier 5- Austria|
|CMS Reich-Rohrwig Hainz|