A revised draft bill 2014 amending Tax Acts was forwarded to the Austrian Parliament

A revised draft bill 2014 amending Tax Acts was forwarded to the Austrian Parliament

On 29 January 2014, a revised draft bill of the 2014 Tax Amendment Act (Abgabenänderungsgesetz 2014) was forwarded to the Austrian Parliament. The revised draft bill modifies the initial draft law with amendments to certain Austrian Tax Acts that was published on 9 January 2014.

The following changes and additions to the first draft bill were made:

  • As of 1 March 2014, pursuant to the OECD Base Erosion and Profit Shifting (BEPS) Action Plan to fight against the intra-group transfer of profits via interest and royalty payments to low-tax jurisdictions or jurisdictions with a special tax regime, interest and royalty payments to domestic and foreign affiliated corporations shall no longer be tax deductible if the income of the recipient corporation (beneficial owner) is completely or predominantly not subject to taxation or taxed at a rate of less than 10% (in contrast to the initial draft bill, the minimum tax rate was reduced from 15% to 10%).
  • As of 1 March 2014 minimum share capital for limited liability companies (GmbHs) increases again from €10,000 to €35,000. Since the annual minimum corporate income tax amounts to 5% of the statutory minimum share capital, the minimum corporate income tax increases again to €1,750 per year.For limited liability companies set up after 30 June 2013, during the following 10 years the minimum corporate income tax shall be increasing gradually with raise to €500 per year for the first 5 years, and to €1,000 per year in the subsequent 5 years. After 10 years the minimum corporate income tax shall be €1,750 per year.

The following provisions of the first draft bill stay unchanged:

  • Limitations to the group taxation regime: As of 1 March 2014, in addition to corporations resident in the EU, foreign entities resident in countries with which Austria has agreed on comprehensive administrative assistance may be included into a tax group. Starting with the 2015 tax assessment, the utilization of losses of foreign group members shall be limited to 75% of the domestic group income. 
  • Abolishment of the existing 1% capital duty on equity contributions from 1 January 2016
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