MFB Decree on the provision of cross-border labor services

After the Supreme Administrative Court In May 2013, a significant decision was made regarding cross-border placement of labor has arrived, has now arrived BMF in one Decree (BMF-010221/0362-VI/8/2014 from June 12, 2014) this Case law implemented and concretized. The VwGH decision states that the contractual legal term „Employer“Pursuant to Art. 15, Para. 2 of the OECD Model Convention to be interpreted in terms of economic understanding It is. So it comes from an Austrian perspective for the Tax law to the self-employed income of the employee assigned to not focus on who the formal employer is or who pays the employee remuneration, but on who pays the employee bear economic costs must.

While the Austrian financial administration previously In principle, the view was that in the case of cross-border labor assignment, the determination of the employer under the DBA would be based on civil law or. labor law characteristics to continue, the discontinuation leads to the economic employer now to add that to Employees (the person who receives the goods) and not the assigner anymore Employer characteristic will follow. Subsequently, the 183-day rule only in Exceptional cases Effect – it happens regularly Home state (Employer State) the Tax law It is significant that the decree exclusively onto the Intergovernmental tax law refers to and also only refers to Pure passive services (i.e., the classic labor leasing) must be applied. Consequently, the economic employer concept Not for Active services authoritative – such an active performance is, for example, to be assumed when an employee is sent to a foreign subsidiary for several weeks in order to implement a global marketing strategy there. monitor.

In „Outbound cases“ (Posting of an Austrian employee abroad) displays Austria the income from the employee's performance of services that is subject to taxation in the country of activity free (under Reservation of progression), provided that the other state also follows the economic interpretation of the term "employer" and bases its tax law on it. For the tax exemption in Austria, it should be based on For documentation purposes one Proof of taxation in the employee's country of residence to be submitted. Alternative Following the issuance of the ruling, a tax exemption can also be achieved in Austria if it is proven that the application of foreign national law has resulted in: no taxation concludes. In the case of labor transfers to Austria (“Inbound cases“) plays the actual duration now also equally no role. The Tax law of Austria the corresponding salary for the dispatched employee can be either determined by the Option to make voluntary salary tax deduction or by withholding and rejecting an 20%-year withdrawal tax the placement fee is fulfilled (i.e., the Austrian employer transfers only 80% to the foreign assignor). The Excise tax applies in principle equally for die commercial assignment from personnel (between external third parties) as well as for Outsourcing of labor in the group. At least, the decree stipulates that when labor is outsourced within the group, certain parts of the placement remuneration, such as fringe benefits, common costs, and profit-sharing, are deducted from the calculation base for the deduction.The end of the worldThey are identical.

Finally, the decree also deals with cross-border labor relocation in proportion to Germany. The now diametrically changed view of Austria leads to Concordance with Germany in mind, that the 183-day rule only for the professional labor assignment shall apply. For other forms of personnel assignment, such as within a group, the employing companies also Employer is to be considered under the DBA and therefore the duration of the transfer for tax law is not relevant.

Positive It is that, due to the changed view of the Austrian financial administration towards being an economic employer, it is likely to less qualification conflicts It will come with other countries. However is achieved by the restriction of the 183-day rule as a tolerance for short-term labor transfers, as well as by Additional proof requirements one increased administrative effort to be expected from the taxpayer.

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