Tax changes of the Budget Accompanying Law 2003

Adaptation to the higher retirement age

:: Tax-free future security § 3, paragraph 1, item 15 a of the EStG
The rigid limit of 62 years of age regarding contributions for a life insurance policy, which was criticized in the July 2003 client information, is now extended to the age at which statutory retirement benefits become payable.

:: Premium-eligible future savings § 108 g EStG
Here too, the rigid limit with the age of 62 is waived and is extended until the age at which statutory retirement benefits are paid.

Capital gains tax on foreign investments

Regarding the question raised in the client information July 2003 regarding the crediting of foreign source taxes, reference is made to an extension of the regulation in the Foreign Interest Tax Ordinance BGBl II 1998/43, because no crediting provision was included in the law. Upon becoming known of this new regulation, this will be reported. The start of withholding of capital gains tax on foreign dividends will be extended; the regulation will only apply from April 1, 2004.

Special issues on broadband technology

The deductibility for the initial connection is at the rate of
€ 50,- and the monthly fee of € 40,- require that the physical download bandwidth is at least 256 kbit/second (e.g. Chello or ADSL connection, but not UMTS technology)

Taxation of purchase price annuities from 2004

In principle, valuation according to actuarial principles replaces capitalization under the Act on Value-Added Tax. However, there is the option that the new taxation can only be implemented with the consent of the pension payer and pension beneficiary, and the deadline is extended to December 31, 2006.

Taxation of index products / enjoyment rights

The regulation that value changes in these securities are not capital gains if there is a capital guarantee of no more than 20% is extended until March 1, 2004.

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