Austria: Claw-back, foreign tax losses | KPMG | GLOBAL

Austria: Claw-back, foreign tax losses when tax group is dissolved

Austria: Claw-back, foreign tax losses

The Austrian Federal Finance Court addressed the timing of a claw-back of foreign losses when the Austrian tax group is dissolved, and held the claw-back is made in the financial year of dissolution.

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Under Austrian tax law, foreign companies in countries having mutual assistance agreements with Austria may join the Austrian tax group. As a result, tax losses derived by a foreign group member can be used by the Austrian tax group. 

The allocation of foreign losses is, however, limited with 75% of the positive tax result of Austrian group members. Furthermore, in order to avoid double-loss utilization, previously allocated tax losses are clawed back if used in the country of origin of the foreign group member. Also, all previously used foreign tax losses need to be clawed back if the respective group member leaves the group or the group is dissolved. 

The court’s judgment, thus addresses the timing of the claw-back of the foreign tax losses when the tax group is dissolved.

 

Read a December 2016 report [PDF 347 KB] prepared by the KPMG member firm in Austria

 

The KPMG report also includes discussions about:

  • Accruals for warranties not correctly established, and missing documentation of the reasons for creation of the accounts may result in allegations of tax fraud
  • Information from the Ministry of Finance on combinations of restrictions on the deductibility of capital losses of participations
  • Court decision that withholding tax on worker assignments from EU / EEA countries to Austria must not be greater than the income tax that would apply for a national personnel lease provider
  • Clarifications regarding the obligation to disclose “donations” including cash, capital claims, shares in a corporation, interests in a partnership, businesses and parts of a business, movable tangible assets or intangible assets

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