Reporting obligation for cross-border tax arrangements (DAC 6) - Implementation in Austria

Although the Reporting obligation for cross-border tax planning arrangements has been causing unease for some time among affected companies and intermediaries such as tax advisors, this topic will in the year 2020 only really become virulent. After in June 2018 the amended EU Directive on Administrative Cooperation On coming into force, the Implementation in Austria with the "EU Reporting Obligation Act".

From Time horizon considered, exists Reporting requirement from 1 July 2020, where the messages are retrospectively all relevant tax planning between 25 June 2018 and 1 July 2020 must be grasped. Therefore, it is advisable that already previously relevant Facts corresponding documented The primary objective of this reporting obligation lies in Tax avoidance containment and aggressive tax planning, whereby more than one EU Member State or an EU Member State and a third country must be affected. Legal, but "unwanted" Designs should therefore be reported. Specifically related to tax types, all Direct taxes such as income tax, corporation tax, and withholding tax, Not but indirect Taxes (US taxes), customs duties, social security contributions and fees.

While the EU Directive disclosable arrangements into so-called "Hallmarks" divides, distinguishes the EU Reporting Obligation Act between mandatory reporting arrangements and Disguised remunerations subject to reporting requirements. Mandatory to report Designs include e.g. multiple depreciations of the same asset, transfer of assets for the use of varying valuation regulations, the use unilateral safe harbour rules and the transfer of intangible assets that are difficult to value or – also in the context of transfer pricing – Functional migration, provided that the expected EBIT over a three-year period, as a result of the transfer of functions, amounts to less than 50% of the EBIT that would have been expected had the transfer not taken place.

At the subject to reporting requirements Design is authoritative for a duty to inform that the Main advantage or one of the main advantages of design in the Obtaining a tax advantage is located (so-called "Main benefit test"). If this is the case, the following mustselected) Designs that are to be reported:

• Tax advantage-dependent fee,
• Standardised design,
• Shell company acquisition (acquisition of a company for the purpose of loss utilisation),
• Deductible payments to recipients who are subject to no or virtually no corporation tax (not exceeding 1%) or who are subject to a preferential tax regime.

As concrete arrangements and activities from daily business life cannot always be unequivocally distinguished between notification and non-notification obligations, future guidance will be provided by the Austrian BMF in the form of a decree, such as a "Allow List" from disclosable arrangements, long await. At least administrative Problems can also arise in this respect, in that the EU directive has not been implemented in exactly the same way in the various states and some states have extended the scope for potentially reportable tax arrangements (Poland includes VAT in the reportable taxes).

If Notification requirement Given a specific cross-border tax model, it is usually necessary to "Intermediary" - certain information will be disclosed to the tax authorities. This includes, for example, Description The reportable cross-border Design, the Worth The reportable Tax planning, an overview of the Member States affected by the specific tax model and the Date of execution the first implementation steps of the design. Caution is advised, as the report to the tax authorities within 30 days must be undertaken. The Reporting deadline doesn't just start by running the model, but already even if the elaborated Model has been provided or the first step of the model implemented Austria is to report regularly via FinanzOnline Such disclosures are then automatically shared between Member States via a central register.

Occurs No message (or only an incomplete one), notification deadlines are missed, incorrect information is reported, etc., then (in Austria) a Financial offence in existence. The associated Fines amount to Intention up to €50,000 and at gross negligence up to €25,000. An exemption through Voluntary disclosure is Not possible. The penalties abroad can also be considerably more draconian and in Poland amount to several million euros.