New regulations for reorganizations

Restriction of Austria's taxation right

The new regulations in the Reorganization Tax Law provide for changes in the event of a restriction of Austria's right to tax, such as in the case of cross-border mergers and demergers, if Austria's right to tax the shares of the transferring company is restricted as a result of these reorganizations. This applies, for example, in the case of a merger of a domestic company with 100% domestic shareholders into a company with foreign shareholders.
In the event of a resale/separation of the shares in the acquiring corporation by foreign shareholders, taxation will occur in Austria, but only if there is a temporal connection between the merger or demerger and the sale/separation of the shares.

Simplification and Modernization of the Reorganization Tax Act (UmgrStG)

Furthermore, measures to simplify and modernize the Reorganization Tax Act (UmgrStG) were adopted. In principle, in the case of contributions, the transferor must be granted corporate rights in the acquiring corporation as consideration for the transfer of its contribution assets. However, the granting of corporate rights can be waived under certain conditions.
Such a waiver is now also possible if several persons have the same shareholding in the assets to be contributed and in the acquiring corporation. In the future, the granting of shares in the acquiring corporation can thus be waived if all parties involved in the acquiring corporation contribute beneficiary assets to the corporation in which they have a substantial interest in relation to each other to the same extent as in the acquiring corporation.

Example: A and B each hold 50% in the domestic X-GmbH and in the domestic Y-GmbH. As of 31.12.X1, A and B contribute their shares in X-GmbH to Y-GmbH. Since A and B contribute beneficiary assets in which they have a substantial interest in total in relation to each other to the same extent as in the acquiring Y-GmbH, the granting of shares in Y-GmbH can be waived.

General obligation to notify

The existing general notification requirement for reorganizations must in future be made by means of a standardized form as well as electronically via FinanzOnline. Overall, this is intended to make an initial contribution to the standardized, uniform and electronic recording of reorganization transactions. The structure and content of these reports are to be defined in more detail by a regulation.

Tip: If you are considering a (cross-border) reorganization, we recommend early planning and comprehensive advice, since in addition to civil law issues, there are always tax law problems to be solved in such legal forms.