Austria: Establishment of a PE through home office activity

In a legal opinion, the “BMF” has explained under which circumstances a permanent establishment is triggered by home office activities.

If the private residence of the employee is used externally e.g. as a base for the perfor­mance of the contract (e.g. for physical meetings) or as a domestic address for service and repair work, then this triggers a permanent establishment for the employer irrespective of the time spent there (= external use case). The only exception would be that in this case, only preparatory or auxiliary work are carried out in the private residence.

If there is no such external use case, the home office activity triggers a permanent establish­ment if:

• this activity is carried out in agreement with the employer AND
• takes place over a sufficient period (a period of at least 6 months) AND
• the work is not only occasionally carried out in the home office. The tax authorities assume that if the work is carried out to the extent of less than 25% of the total working hours (e.g. one day per week) it is to be regarded as merely occasional; an exercise of more than 50%, on the other hand, is no longer merely occasional, AND
• the activity carried out in the home office is not merely preparatory or of ancillary nature.
   

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