As reported in Issue 2/2018 of our International Tax
Newsletter, Austria introduced CFC legislation in line with the
EU's Anti Tax Avoidance Directive, with effect for business
years starting as of 1 January 2019. Recently, an ordinance by the
Austrian Minister of Finance has been issued in this
context.
CFC Rules
As reported, non-distributed passive income of a low taxed
controlled foreign company
("CFC") shall be included in
the tax base of the controlling corporation if the following
prerequisites are fulfilled:
- the passive income of the CFC exceeds
a third of its total income;
- the direct participations held in the
CFC by the controlling corporation and its associated enterprises
result in an entitlement to more than 50% of the voting rights or
the capital or the profits of the CFC; and the CFC does not carry
out a substantive economic activity supported by staff, equipment,
assets and premises.
