Double Taxation Treaties in Austria
Double Taxation Treaties in AustriaUpdated on Wednesday 24th April 2019
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A double tax treaty is an agreement between two countries for the purpose of resolving any issues that may arise with the taxation of the passive and active income in both jurisdictions. Double taxation relief is useful both for companies and for individuals, allowing them to pay the same tax only once.
Our team of lawyers in Austria can help interested investors by providing personalized answers.
In order to benefit from the advantages of a double tax treaty (DTA), companies and individuals 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. The ones receiving the payments and the ones making the payments must fill in certain documents, such as 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.
Who can benefit from the provisions of a DTA?
Foreign companies and individuals who derive income both from Austria and a country with which Austria has signed an agreement for the avoidance of double taxation.
Who cannot benefit from the provisions of a DTA?
Certain entities cannot fully benefit from the provisions of a double tax agreement. For example:
- the pure holding companies,
- the foundations,
- the trusts,
- the investments funds,
- letterbox companies,
- others specified in the double tax treaties.
Our team of lawyers in Austria can give you more details on the exemptions.
Another 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 sent to the authorized tax office along with other requested documents (usually a certificate of taxation from the country of origin).
What are the taxes for which a DTA applies in Austria?
The taxes covered by a DTA in case of Austria include the income tax, the corporate tax and any other taxes as defined in the treaty (the taxes can differ from one treaty to the other).
What are the taxes for which a DTA applies in other countries?
For the other signatory state, the general taxes for which the treaty will apply are the income taxes for companies and individuals, as they are levied by the local authorities in each state.
How many DTAs has Austria signed?
Austria has signed more than 90 tax treaties with countries around the world. Examples of countries with which Austria has signed double tax agreements include 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, Iceland, 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.
Austria has also signed a number of Tax Information Exchange Agreements. These allow the signatory states to exchange information on specific tax investigations. Examples of such agreements include Andorra, Gibraltar, Monaco and St Vincent and Grenadine. Also, every double tax treaty elaborated according to the OECD model has a provision regarding the tax exchange between the signatory states.
Apart from the corporate income tax, other taxes for companies in Austria include the withholding taxes on dividends, income and royalties (which can be reduced or abolished under an applicable DTA), payroll tax, social security tax, real property tax, stamp duty and transfer tax.