Training costs of a son employed in the father's practice

Contracts between next of kin have always been at the center of many audits. Through relationships of dependency between close relatives, this can lead to „Steuer splitting“ tax savings can be made easily by shifting income from higher-earners to lower-earners who are close relatives, and thus by the different tax rates applied to different groups of taxpayers. Tax progression in Overall assessment one Tax benefit is being created.

To overcome this Design freedom To counteract this, the VwGH developed general principles, which Requirements for such contracts regulations. Accordingly, Agreements Between close relatives in tax law only to be acknowledged, when she

• be sufficiently expressed externally (Publicity),
• a clear and unambiguous, clear and excluding any doubt Contents have, and
• Also between family members under the same conditions would have been completed.

The Supreme Administrative Court had to decide on a case at the beginning of this summer (24.5.2012, GZ 2009/15/0130), in which a doctor had admitted to having sexually abused a patient. Son part-time employment had and for this purpose Training costs for a three-year term Physiotherapy training took over and as Business expense in his ordination claimed. The apprenticeship agreement between father and son stipulated Repayment obligation of the son, in case he should terminate the employment in his father’s practice within five years of the training. The Finance Recognized Although that's true Employment relationship in itself, refused but because of a lack of foreignness, the Deduction of training costs as a business expense for the father.

The VwGH once again confirmed the above-mentioned requirements, whereby in the present case it was particularly important to examine whether one of these Cost recovery It would also have been agreed between unrelated family members. Supreme Administrative Court saw the Contract Ultimately as not foreign to us because, on the one hand, one of the usual provisions in training agreements No prohibition of competition and also the Cost recovery from about 45,000 € for a part-time assistant with a monthly salary of 400 € due to lack of amortization This would not have been completed by strangers. Disproportionate This could have been compensated for by the fact that the son had already made an advance commitment to Full-time employment after the training had been obligated to. However, this was not provided for in the training agreement in question. The VwGH prohibited So the Training costs as an operating expense for the father, since in economic terms the private considerations of the father overweighed.

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