The Double Taxation Relief and International Tax Enforcement (Austria) Order 2019

• Citation: S.I. 2019/255
• Sections: 9

Section 1 Citation

This Order may be cited as the Double Taxation Relief and International Tax Enforcement (Austria) Order 2019.

Section 2 Double taxation and international enforcement arrangements to have effect

It is declared that—

(a) the arrangements specified in the Schedule have been made with the Republic of Austria—

(i) with a view to affording relief from double taxation in relation to capital gains tax, corporation tax, income tax and taxes of a similar character imposed by the laws of the Republic of Austria, and

(ii) for the purpose of assisting international tax enforcement; and

(b) it is expedient that those arrangements should have effect.

Section 1

With reference to paragraph 2 of Article 11 (Interest)

It is understood that the term “interest” does not include any item which is treated as a dividend under the provisions of Article 10.

Section 2

With reference to Article 11 (Interest)

Notwithstanding the provisions of Article 11 of the Convention, interest may be taxed in the Contracting States in which it arises, and according to the law of that State,

(a) if it is derived from debt-claims carrying a right to participate in profits, including income derived by a silent partner (“stiller Gesellschafter”) from his participation as such, or from a loan with an interest rate linked to borrower’s profit (“partiarisches Darlehen”) or from profit sharing bonds (“Gewinnobligationen”) within the meaning of the tax law of Austria; and

(b) under the condition that it is deductible in the determination of profits of the debtor.

Section 3

With reference to paragraph 3 of Article 16 (Artistes and Sportsmen)

It is understood that paragraph 3 shall also apply to legal entities which are, or operate, orchestras, theatres, ballet groups as well as to members of such cultural entities if such legal entities are generally non-profit entities and if this is certified by the Competent Authority of the State of which the entity is a resident.

Section 4

With reference to paragraph 4 of Article 20 (Other Income)

(a) For the purposes of paragraph 4 such income shall also include payment for damage resulting from crimes, vaccinations or similar reasons.

(b) The income mentioned in this paragraph shall not be taken into consideration when applying the exemption with progression method.

Section 5

With reference to Articles 23 (Mutual Agreement Procedure) and 25 (Assistance in the Collection of Taxes)

It is understood that the provisions of Articles 23 and 25 shall have effect from the date of entry into force of the Convention without regard to the taxable or chargeable period to which the matter refers.

Section 6

With reference to Article 24 (Exchange of Information)

(a) The competent authority of the applicant State shall provide the following information to the competent authority of the requested State when making a request for information under the Convention to demonstrate the foreseeable relevance of the information to the request:

(i) the identity of the person under examination or investigation;

(ii) a statement of the information sought including its nature and the form in which the applicant State wishes to receive the information from the requested State;

(iii) the tax purpose for which the information is sought;

(iv) grounds for believing that the information requested is held in the requested State or is in the possession or control of a person within the jurisdiction of the requested State;

(v) to the extent known, the name and address of any person believed to be in possession of the requested information;

(vi) a statement that the applicant State has pursued all means available in its own territory to obtain the information, except those that would give rise to disproportionate difficulties.

(b) It is understood that the standard of ‘foreseeable relevance’ is intended to provide for exchange of information in tax matters to the widest possible extent and, at the same time, to clarify that Contracting States are not at liberty to engage in ‘fishing expeditions’ or to request information that is unlikely to be relevant to the tax affairs of a given taxpayer.

Section 7

Interpretation of the Convention

(a) It is understood that provisions of the Convention which are drafted according to the corresponding provisions of the OECD Model Convention on Income and on Capital shall generally be expected to have the same meaning as expressed in the OECD Commentaries thereon as they may be revised from time to time. The understanding in the preceding sentence will not apply with respect to the following:

(i) observations to the OECD Commentaries maintained by either Contracting State other than observations made after the signature of this Convention on Commentaries that existed before its signature;

(ii) any contrary interpretations in this Protocol;

(iii) any contrary interpretation in a published explanation by one of the Contracting States that has been provided to the competent authority of the other Contracting State before the signature of the Convention;

(iv) any contrary interpretation agreed by the competent authorities after signature of the Convention.

The OECD Commentaries – as they may be revised from time to time – constitute a means of interpretation in the sense of the Vienna Convention of 23 May 1969 on the Law of Treaties.

(b) Improper use of this Convention

Having regard to the Commentary to Article 1 of the OECD Model Convention on Income and on Capital on “Improper use of the Convention” (as it may be revised from time to time), it is understood that this Convention shall not be interpreted to mean that a Contracting State is prevented from applying its domestic legal provisions on the prevention of tax evasion or tax avoidance where those provisions are used to challenge arrangements which constitute an abuse of the Convention.

IN WITNESS WHEREOF the undersigned, duly authorised thereto, have signed this Protocol.

DONE in duplicate at Vienna this 23rd day of October 2018 in the English and German languages, each text being equally authoritative.