The Resource Aktuelle BEPS-konforme VwGH-Judikatur zu hybriden Personengesellschaften = Recent ruling of the Supreme Administrative Court on hybrid partnerships in line with the BEPS approach

Aktuelle BEPS-konforme VwGH-Judikatur zu hybriden Personengesellschaften = Recent ruling of the Supreme Administrative Court on hybrid partnerships in line with the BEPS approach

Label
Aktuelle BEPS-konforme VwGH-Judikatur zu hybriden Personengesellschaften = Recent ruling of the Supreme Administrative Court on hybrid partnerships in line with the BEPS approach
Title
Aktuelle BEPS-konforme VwGH-Judikatur zu hybriden Personengesellschaften = Recent ruling of the Supreme Administrative Court on hybrid partnerships in line with the BEPS approach
Creator
Subject
Language
eng
Summary
On 15 October 2020, Ro 2019/13/0007, the Austrian Supreme Administrative Court rendered a decision with respect to the attribution of dividends paid by an Austrian limited liability company (LLC) to its legal Slovakian shareholder, which was a hybrid Slovakian partnership (S-KG) founded in 2007. The entire capital of the commercially active S-KG was held by an Austrian taxpayer who had transferred his LLC participation to the S-KG shortly after its foundation in 2007. Under Slovakian tax law, the partnership was treated as an opaque company and thus was granted tax exemption under the EU Parent-Subsidiary Directive for the LLC dividends. Onward distributions of the partnership to the Austrian taxpayer stayed tax exempt under domestic Slovakian tax law. However, due to the transparency approach applied by Austria, the LLC dividends could not be allocated to the Slovakian partnership, as this has been done under Slovakian law but had to be attributed to the Austrian taxpayer. The key issue that had to be decided by the Court and which forms the subject matter of this article is related to the question of whether the interest in the LLC was "effectively connected" with the trading business of the S-KG. In the affirmative, the taxpayer would have been exempted from tax under the Austro-Slovakian tax treaty. However, the Court decided to the contrary and held that the treaty's "effectively connected requirement" cannot be interpreted in a way that it is fulfilled when an asset is part of the "mandatory business property" as defined under Austrian domestic law. Although there are arguments that may support the taxpayer's view, the decision of the Court is in any case fully compatible with the global BEPS approach according to which tax treaties shall be interpreted in a way as to not create opportunities for non-taxation
Citation source
In: Steuer und Wirtschaft International. - Wien. - Vol. 31 (2021), no. 4 ; p. 181-191
http://library.link/vocab/creatorName
Loukota, H
Geographic coverage
  • European Union
  • Europe
Language note
German
http://library.link/vocab/subjectName
  • case law
  • hybrid entity
  • transparency
  • allocation of income
  • effectively connected income
  • tax treaty
  • double non-taxation
  • BEPS
Label
Aktuelle BEPS-konforme VwGH-Judikatur zu hybriden Personengesellschaften = Recent ruling of the Supreme Administrative Court on hybrid partnerships in line with the BEPS approach
Instantiates
Publication
Label
Aktuelle BEPS-konforme VwGH-Judikatur zu hybriden Personengesellschaften = Recent ruling of the Supreme Administrative Court on hybrid partnerships in line with the BEPS approach
Publication

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