date | theme

26. October 2020 | Overview of the OECD Model Agreement – OECD-MA as the basis for DTA

02. January 2021 | Double Taxation Agreement Austria (this contribution)

08. January 2021 | Double Taxation and Double Taxation Agreement

08. January 2021 | Overview of the most important articles of the OECD-MA

08. January 2021 | Double taxation without DTA: Business relations with countries without DTA

Many states strive to avoid double taxation with other states. For this purpose, double taxation agreements (DTAs) are concluded. In this article, we take up the DTA Austria to look at the most important regulations and differences to the OECD Model Agreement (OECD-MA). In particular, the regulations of the DTA Austria are important, which are tailored to the many commuters and cross-border commuters. But also the inclusion of the liberal professions and the independent work in the DBA Austria are part of the regulations.

Since Austrian tax law is very similar to German tax law, the double taxation agreement between the Republic of Austria and Germany is also written relatively uniformly. In the process, the DTA was recast in 2000 and thus adapted to globalization, since the previous DTA dated back to 1954 (it was last amended in 1992).

The main focus of the DTA Austria is essentially on avoiding double taxation of cross-border commuters, commuters and other persons living near the national borders.

2. The articles of the DTA Austria in detail

First of all, let’s look at the articles that differ from the OECD-MA. Although the articles of the DTA Austria correspond in principle to the OECD-MA. However, within the framework of the DTA negotiations, many things are changed in order to meet the individual requirements.

2.1. Articles 1 to 5 DTA Austria

Articles 1 to 5 DTA Austria are almost identical to the OECD-MA. Individual changes only affect specific situations, such as the residency of persons or companies, or permanent establishments.

2.2. Article 14 DTA Austria – Self-employment

While Article 14 in the OECD-MA is vacant, a regulation has been made for the DTA Austria. This concerns the taxation of income from self-employment. Self-employment includes the so-called liberal professions. This includes, in particular, lawyers, doctors, tax consultants, architects, engineers and other scientific, literary, artistic, educational or teaching professions. But other professions can also fall under this.

For this purpose, the residency principle applies: Thus, taxation is the responsibility of the State in which a taxable person who receives income from self-employment is resident. Therefore, the residence of such a taxable person is decisive. However, if such a person maintains a “fixed establishment” in the other state, there would be a reservation on the profits made in that state – similar to the reservation of a permanent establishment.

Article 15 DTA Austria regulates the assignment of taxation law to employees. This is especially important for cross-border workers and commuters, as well as for all people who work in one state but the employer is in the other state. In principle, the principle of activity applies here: wages and salaries are taxed by the state in which the activity takes place.

The activity of employees can be distinguished into three case groups.