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CJEU - Recent Developments in Value Added Tax 2015 Schriftenreihe IStR Band 99

  • Erscheinungsdatum: 10.08.2016
  • Verlag: Linde Verlag Wien Gesellschaft m.b.H.
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CJEU - Recent Developments in Value Added Tax 2015

Considering the ever increasing importance of indirect taxation as a source of revenue for governments, the intensifying complexity of legal framework, and the proliferating number of countries adopting indirect taxation, it is essential to scrutinize how the law is actually applied in practice. The primary driving force in this area is, undoubtedly, the Court of Justice of the European Union. This book analyzes selected topics (e.g., abuse and anti-avoidance measures, taxable base and rates, treatment of Public Bodies, exemptions, and deductions) by examining the most prominent and recent judgments of the Court of Justice of the European Union. Experts from all over the world, not just from academia but also government representatives and tax practitioners, have provided their input and helped us compile what is an informative and worthy read for anyone dealing with indirect taxation on a professional basis.


    Format: ePUB
    Kopierschutz: AdobeDRM
    Seitenzahl: 376
    Erscheinungsdatum: 10.08.2016
    Sprache: Englisch
    ISBN: 9783709408186
    Verlag: Linde Verlag Wien Gesellschaft m.b.H.
    Größe: 1297 kBytes
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CJEU - Recent Developments in Value Added Tax 2015

1 Austria: CJEU Recent Cases - F.E. Familienprivatstiftung Eisenstadt and Finanzamt Linz

Claus Staringer

I. Overview

II. Familienprivatstiftung Eisenstadt (C-589/13)

III. Finanzamt Linz (C-66/14)
I. 2 Overview

There are two reportable cases from Austria on direct taxes, both already decided by the CJEU. The two cases are (C-589/13) 1 and (C-66/14) 2 . The "Court's schedule has been such that both of these cases were reported as pending at last year's conference (and in the subsequent book). 3 In the intervening period, the rulings have now been published in both cases so that they can now be reported as recent cases.

In last year's contribution, a detailed description of the facts of both cases was given, and an analysis of their legal issues is already available there. Therefore, for the avoidance of unnecessary duplication, the following contribution will limit itself to a description of the facts and the legal issues of the cases only to the extent necessary for the reader to get a simple overview of the cases by reading the present contribution. The main focus, however, will be on key aspects of the judgments of the CJEU now available for and .
II. Familienprivatstiftung Eisenstadt (C-589/13)

As described in detail last year, this case is about the "interim tax" regime for Austrian private foundations (). In a nutshell, this regime works as follows: In terms of the initial underlying intention of the legislator, private foundations were exempt from corporate tax on their investment income and capital gains. Conceptually, such income was therefore not to be taxed at the level of the foundation, however it was prescribed that a tax would be levied upon distribution by the foundation to its beneficiaries (this tax was levied by way of a withholding tax in the amount of, then 25 %, now 27.5 %). The result of this initial concept was a deferral effect for the tax burden on the foundation's income, as this burden was deferred until the point when distributions to beneficiaries were actually made (the effect of which could be rather significant if no or only small distributions were made by the foundation). Over the years, however, this regime was amended with the purpose of, firstly, mitigating, and secondly, abolishing the deferral effect by levying corporate income tax on the foundation's investment income and capital gains (the rate of such corporate income tax being 12.5 % in the years in dispute, today it is 25 %). This corporate income tax on foundations is colloquially known as an "interim tax", because there is a refund of the tax to the 3 foundation if and to the extent it makes subsequent distributions to its beneficiaries. If the foundation did not distribute its full income to beneficiaries, the residual (i.e. not yet refunded) interim tax was ultimately refunded in full to the foundation upon its dissolution. In other words, the foundation's corporate income tax was, in the long run, of an "interim" nature only as the foundation was guaranteed to get a refund of the tax at the latest upon its dissolution.

The issue in the case was, however, that there no such refund of interim tax was granted at the time of distribution to beneficiaries, if the beneficiaries were resident in a foreign country that had concluded a tax treaty with Austria limiting (or eliminating in full) Austria's right to tax the distributions. In such a case of non-resident and treaty protected beneficiaries, the foundation's interim tax was refunded (although still in full) no earlier than upon dissolution of the foundation. Obviously, this could have a significant effect on the foundation's tax and liquidity position if there was no plan to dissolve the foundation in the near future. The issue arose frequently. Looking a

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