Supreme Administrative Court on the relocation of the centre of vital interests during foreign employment

For the taxation of natural persons is regularly in the international context Residence authoritative, as most states establish residency and associated Unlimited tax liability the existence of a Place of residence or to the ordinary residence to a person. If two states, on account of their respective domiciles, Taxing worldwide income wool, threatens Double taxation. As a solution, the Double taxation agreement (DBA) foresees that further criteria must be assessed to definitively determine the state of residence. Any potential double taxation is then avoided, as only the Country of residence the World income taxable by and to the other state as Country of origin just one Limited tax liability happens.

According to the criterion of residence, the criterion of Centre of life interests for determining the state of residence. Simply put, it is intended Natural person residing in the state – provided residency is established as a first step – to which they closer personal and economic relations hat. The Supreme Administrative Court had to deal with the case (GZ Ra 2016/15/0008 of 17.10.2017) in which a Employee in Austria had mutually terminated his employment relationship in order to then join the corporate company USA for 18 months to work (as an employee of the US company). He kept Seine Flat in Austria however, she did not rent it out during his absence, as a rental over the period of his absence would not have been compatible with the provisions of the MRG (a restricted Tenancy agreement following MRG must go at least three years to be completed).

The Austrian tax office saw due to the actual power of disposal about the Flat die Residency further in Austria given (with the consequence of unlimited tax liability in Austria). Despite concurrent residence in the USA you are the Centre of life interests further in Austria to be assumed, which must fundamentally be viewed over a longer period. Regularly, for short-term stays abroad (less than two years ago) from no shift in the centre of vital interests to proceed. The Supreme Administrative Court shared this view, emphasising that for the determination of the centre of vital interests, reference Overall picture The personal and economic circumstances arrives over a period (exceeding 1 year). While the family ties as well as activities of a social, religious and cultural nature Personal circumstances determine, provide the locally bound activities and the assets in the form of Revenue Information about the Economic conditions. With reference to previous case law, a Temporary overseas assignment den Centre the interests of life even then in Austria exist when the family moves abroad with the employee, the Flat I'm Inland but Retain Furthermore, the economic relations as a rule, one Less significance as personal relationships to In the present case, these had only been very limited with regard to membership in clubs and other social engagements in the USA.

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