A double tax treaty is elaborated in order to avoid taxation of incomes and profits in both signatory countries.
In order to benefit from its advantages, the requesters must meet certain conditions, such as a certification that the taxes are already paid in the country of provenience. When the taxes are not paid at all, the process is called relief at source.
For beneficiating of this procedure, the recipients of the payments and the payer agents must fill certain documents. The documents consists in: a request for not applying the withholding taxes fully certified by the foreign country’s tax administration and other relevant documents which may be requested by the Austrian tax administration.
However, certain entities cannot beneficiate from the relief at source:
- the pure holding companies,
- the foundations,
- the trusts,
- the investments funds,
- letterbox companies,
- others specified in the double tax treaties.
Other method to beneficiate from the provisions of a double tax treaty is the refund of tax when the paying agent has deducted the tax at source. An application must be send to the authorized tax office along with other requested documents (usually a certificate of taxation from the country of origin).
So far, Austria has signed agreements of double taxation avoidance with: Albania, Algeria, Armenia, Azerbaijan, Australia, Barbados, Bahrain, Belarus, Belgium, Belize, Bosnia and Herzegovina, Brazil, Bulgaria, Canada, Chile, China, Croatia, Cuba, Cyprus, Czech Republic, Denmark, Egypt, Estonia, Finland, France, Germany, Georgia, Greece, Hong Kong, Hungary, India, Indonesia, Iran, Ireland, Italy, Japan, Kazakhstan, Kyrgyzstan, Korea, Kuwait, Latvia, Libya, Liechtenstein, Lithuania, Luxembourg, Malaysia, Malta, Macedonia, Mexico, Morocco, Moldova, Mongolia, New Zealand, Nepal, Netherlands, Norway, Qatar, Pakistan, Philippines, Portugal, Romania, Russia, San Martino, Saudi Arabia, Serbia, Singapore, Slovakia, Slovenia, Spain, South Africa, Sweden, Switzerland, Syria, Tajikistan, Thailand, Tunisia, turkey, Turkmenistan, United Kingdom, Russian Federation, Ukraine, United Arab Emirates, United States of America, Uzbekistan, Venezuela, Vietnam and double tax treaties on inheritance and gift taxes were signed with Czech Republic, France, Germany, Hungary, Liechtenstein, Netherlands, Sweden, Switzerland, United States of America.
In order to avoid the tax frauds caused by the entrepreneurs who are not paying taxes in the country of origin and also in Austria, claiming the provisions of the double tax treaties, Austria has signed Tax Information Exchange Arrangements with: Andorra, Gibraltar, Monaco and ST Vincent and Grenadine. Also, every double tax treaty elaborated after the OECD model has a provision regarding the tax exchange between the signatory states.
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