Further BMF information on tax relief for the current flood disaster

On June 14, 2024, the BMF published an information regarding tax relief in connection with the current flood disaster (GZ 2024-0.445.738). This is almost an identical information, as it was already published by the BMF in August 2023 (See the article from September 2023 for more details.).

The overview of the measures intended to provide tax relief for those affected by, in particular, flooding and landslides includes the following thematic areas:

• Extension of deadlines;
• Relief for tax (prepaid) payments;
• Tax exemption for payments from the disaster fund and voluntary contributions from third parties;
• Subsidies and donations for the removal of disaster damage;
• General tax benefits;
• Consumer assessment - Floods as an impossibility;
• Exceptional burdens in terms of flood damage;
• Statement of fees;
• Elimination of fees and federal administrative charges;
• Retraction from the determination of the land acquisition tax.

Two subject areas are described in more detail below, as there have been (minor) changes compared to the previous year here, or this subject area has only been discussed very briefly in the past.

The BMF Info notes in its assessment of hobbyists that natural disasters such as floods are unpredictable events and do not lead to a hobbyist assessment of an activity if, before the event occurred, it was possible to foresee an intention to gain profit or exceed profit. Therefore, circumstances such as unforeseen expenses or income losses caused by uncertainties that result in the failure of the overall outcome cannot alone lead to the activity being classified as a hobby.

If an operation is terminated due to unforeseeable circumstances, there is an income source present in the closed period, provided that the intention to achieve a total profit or total surplus remained discernible until the time of termination. Since forecast calculations for the hobbyist assessment are decisive, tax effects on the revenue and expenses must be neutralised here, provided that they are attributable to unforeseen events in the actual results of previous years.

As an advantage for taxpayers affected by the flood disaster (which also applies to landslip, subsidence and avalanche damage), the BMF Info also allows the determination of the land acquisition tax to be waived, provided that a land acquisition tax-related fact, such as the purchase of a replacement property, has been established for the purpose of relocation. In order for no land acquisition tax to be levied on the replacement acquisition, certain prerequisites must be met. These include the relocation and, consequently, the replacement acquisition having been caused by an emergency triggered by a force majeure event. The replacement property must be essentially comparable to the original property - in any case, when determining the land acquisition tax, the generally accepted value of the original property can be deducted from the assessment base of the replacement property. Moreover, the relocation of the place of residence (or Seat) within 4 years from the replacement procurement. Finally, the entry of the damage caused by the natural disaster must also be duly proven (e.g. confirmation from the municipality or from public institutions such as the fire department).

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