Tightening Of Exit Taxation

The draft for the Tax Amendment Act 2015 published today [19 October 2015] proposes an amendment of existing exit taxation rules that would significantly tighten these rules, which eventually lead to the taxation of hidden reserves in assets transferred.

Current law

Currently, Austrian tax law provides for the exit taxation of hidden reserves embedded in assets in case Austria's taxation right with respect to these assets is restricted or lost, eg on the occasion of the taxpayer's moving outside of Austria, a transfer of an entire business or specific assets outside of Austria, or any other circumstances leading to the loss of such domestic taxation right. Nevertheless, in case Austria's taxation right is lost or restricted vis-à-vis an EC or EEA member state with comprehensive administrative and enforcement assistance, the taxpayer is entitled to opt for a tax deferral. If such option is exercised, the amount of hidden reserves in the assets transferred will be