The standard tax assessment period in Austria is the calendar year. However, a company's financial year may deviate. When the tax and financial years deviate, the tax assessments for a year are based on the profits derived in the financial year(s) ending in the respective calendar year (e.g. if tax year is 1 June 2021 to 31 May 2022, then the assessment is financial year 2022).
Generally, the CIT return has to be submitted electronically by 30 June of the calendar year following the year in which the fiscal year of the company ends. However, if the company is represented by an Austrian certified tax advisor, the tax return can be submitted by 31 March of the second following year at the latest (if the company will not be formally requested by the tax office to file it earlier). If the end of a tax year is 31 May 2022 for example, the filing deadline is 30 June 2023 (without tax advisor) or 31 March 2024 (with tax advisor).
Electronic filing of annual CIT returns
The annual CIT return (as well as the annual VAT return) has to be filed by electronic means. In case of a company that cannot reasonably be expected to file tax returns electronically due to the lack of technical prerequisites, tax returns can be filed using pre-printed forms.
Payment of tax
CIT is prepaid in quarterly instalments during the calendar year, with a final settlement subsequent to the annual assessment (payment falls due one month after assessment). Prepayments of CIT generally are based on the most recently assessed tax year's tax burden (unless the taxpayer can show that its tax charge for the current year will be lower).
The difference between CIT as per the final assessment and the prepayments made is interest bearing from 1 October of the year subsequent to the year when the tax claim arose up to the date when the assessment is released (late payment interest). Interest at a rate of currently 2.63% is applied to underpayments (as well as overpayments) of tax.
Tax audit process
Tax audits usually cover CIT, VAT, and WHT. Separate audits are carried out in connection with payroll taxes and social security contributions.
In general, companies are audited every three to four years. The audit period usually covers three to four fiscal years, so, generally, each fiscal year is audited.
The duration of a tax audit depends on the number of years covered and on the complexity of topics (usually between 0.5 and 1.5 years). These topics usually cover ongoing compliance, such as tax returns. Specific topics vary from company to company and can involve, for instance:
- Business restructurings (applicability of Austrian Reorganisation Tax Act, transfer of intangibles, etc.).
- Tax groups (all group members are audited together).
- WHT on dividends, licences, etc.
- Compliance with the arm's-length principle in case of group transactions (tax auditors recently tend to focus on transfer pricing issues).
According to the Annual Tax Act 2018, horizontal monitoring was established as an alternative to tax audits for larger companies (i.e. turnover greater than EUR 40 million) that satisfy certain procedural requirements (e.g. comprehensive internal control system).
Under the concept of horizontal monitoring, companies are in regular contact and cooperate with the tax authorities. It is based on mutual trust and transparency between the taxpayers and the tax authorities.
The Austrian tax offices can issue binding rulings in respect of a planned transaction. A binding advance ruling can be obtained on issues of business restructurings, group taxation, and transfer pricing.
According to the Annual Tax Act 2018, applicable as of 1 January 2020, the scope of binding rulings was expanded and applies to questions of international tax law (DTT qualifications), VAT issues, and the application of anti-abuse regulations.
The fee claimed by the Austrian tax offices for the ruling varies between EUR 1,500 and EUR 20,000, depending on the turnover of the company.
Statute of limitations
The right to assess CIT is subject to a general limitation period of five years after the end of the calendar year in which the fiscal year ends. Additionally, the limitation period can be extended in cases where certain interruptive events (e.g. tax audit, tax assessment) take place within the general limitation period. The maximum limitation period is generally ten years.
In case of tax evasion, the limitation period is also ten years.
In certain cases, the maximum limitation period can be extended to 15 years.
Regarding the limitation period for collecting CIT, generally the same rules apply.