Corporate Tax
WTS Austria advises companies of all legal forms. Our Full Service offer in the field of corporate tax ranges from top-quality advice in national and international tax law, to the preparation of tax returns, to the handling of all auditing issues. We also assist our clients with transaction and restructuring projects from a tax perspective. With our forward-looking tax planning, we help companies reduce their effective tax rate.
We are experts in the world of international companies and corporations. At WTS we represent a large number of Austrian parent companies, holding companies and Austrian subsidiaries of large (partly listed) corporate groups. In doing so, we prepare and implement opinions, reports and concepts on all topics of corporate tax law. These include:
- Interest deduction bans
- Controlled foreign company taxation
- Financing issues
- Group taxation
- Loss utilisation
- Corporate restructuring
- Optimal legal form for a corporate group
- Applicability of the Parent-Subsidiary Directive
In addition, WTS shows internationally active Austrian companies the different configuration options for the taxation of profits and losses from investments. Our experts actively point out risk areas in group structuring and planning (keyword: fraud as defined in Sec. 22 of the Austrian Fiscal Code (BAO)) and incorporate their ideas for optimisation. In addition, we support our clients in obtaining binding tax rulings/information notices within the meaning of Sec. 118 BAO (advanced rulings).
We are also specialists at advising small and medium-sized companies, where the following issues often arise:
- Profit distributions vs. capital repayment,
- Foreign service relationships between the company and shareholders,
- Hidden profit distributions and hidden funds,
- Claims waiver,
- Phase-congruent profit distribution.
At WTS Austria we also provide full support to our clients when it comes to cross-border issues or foreign tax law. We conduct negotiations with the financial administration and financial courts and assist with company audits. Our specialists also work closely with our colleagues in the WTS Global network. Our international network has a presence in over 100 countries and includes top-class consulting firms in the world's major business metropolises.
At WTS, we rely on interdisciplinary teams to develop the best individual solutions for every challenge. This enables us to always look at tax issues from different perspectives.
Group taxation
One of the core issues of corporate tax law is Austrian group taxation. In principle, the attributing subject of income is the corporation that has earned this income (individual taxation principle). However, Austrian corporation tax law allows for a compensation of profits and losses between financially related entities (Sec. 9 of the Austrian Corporate Tax Act (KStG) - "group taxation"). Accordingly, corporate profits and losses can be offset by forming a group of companies, thereby reducing (at least temporarily) the tax burden. The key features of group taxation are:
- One (or, under certain conditions, several) group parents (parent company),
- One or more group members (subsidiary),
- A financial connection,
- Profit attribution,
- A group contract (tax compensation in the group),
- A group application.
Group parents are primarily considered to be unlimited taxable corporations (AG and GmbH). Likewise, EU companies with limited tax liability and comparable companies which have their management and registered office in the EEA may, under certain conditions, act as group parents. Group members are companies with unlimited tax liability.
A special feature of Austrian group taxation is the inclusion of foreign group members under certain conditions, in which case only losses (pro rata and after conversion) can be attributed to the Austrian group parent.
As a material prerequisite, only a financial connection of over 50% of the share capital and voting rights applies. A financial connection of over 50% can be established through direct participation, but also through indirect equity interests (through a partnership or through other group members).
In the case of domestic group members, group taxation results in a 100% attribution of the taxable (positive or negative) result, i.e. both the taxation of the entire group profit and the utilisation of the overall group loss are ultimately borne by the group parent.
WTS Austria looks after a large number of Austrian groups and handles all compliance issues.
Public bodies
At WTS Austria we advise public bodies (especially municipalities) on tax planning and tax configuration. Our areas of expertise include:
- The tax optimisation of companies spun off from public bodies,
- Advising on issues relating to real estate income tax and commercial real estate trading,
- Assessing whether an establishment of a commercial nature exists.
In addition, we have special expertise on non-profit law (association law).
Our specialists (Gottfried Schellmann in Renner/Strimitzer/Vock, Corporation Tax [Comment, LexisNexis], Dr Jürgen Reinold in Tax Law for Municipalities [Comment, WEKA-Verlag]) have already written extensive commentaries on these topics.
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