An Austrian holding company claimed interest deductions on a €12.4 million intra-group loan used to acquire shares in a subsidiary, plus interest on grants to Spanish and Italian subsidiaries. The tax authority disallowed the deductions, alleging abuse and lack of beneficial ownership. The Austrian Federal Finance Court ruled in 2025 that the loan was arm's length, properly documented, and not abusive, deciding mostly in favour of the taxpayer ... Read more

An Austrian company acquired a majority stake in a Turkish subsidiary from a related party for EUR 116.6 million. The Austrian tax authority alleged the price was inflated and constituted a hidden profit distribution. The Bundesfinanzgericht ruled in favour of the taxpayer in 2024, finding that independent DCF valuations by KPMG Turkey and Deloitte Turkey confirmed the purchase price was arm's length and no taxable hidden distribution had occurred ... Read more

An Austrian company held non-interest-bearing trade receivables from a sister company. The tax authority assessed additional corporate income tax for 2002–2004, arguing the absence of interest constituted a hidden profit distribution. The Federal Tax Court overturned the lower court's decision, ruling in favour of the taxpayer and finding the authority had not met the burden of proof required to establish a hidden distribution under applicable standards ... Read more

An Austrian company had outstanding interest-free trade receivables from a sister company, adjusted product pricing, and guarantee commissions paid to its parent. The tax authority assessed hidden profit distributions for 2002–2004. Austria's Bundesfinanzgericht overturned adjustments on product pricing and guarantee fees but upheld the interest-free receivables finding, concluding the absence of interest resulted from common control rather than arm's length dealing ... Read more

An Austrian parent company in the construction sector received two shareholder loans totalling over €658 million under a joint venture framework. The tax authority reclassified the loans as debt capital and assessed interest income, arguing a prior binding ruling no longer applied due to changed facts. The Bundesfinanzgericht upheld the first instance decision in favour of the taxpayer, finding both loans constituted hidden equity capital ... Read more

An Austrian group acquired foreign subsidiaries using intra-group loans and claimed goodwill amortisations for tax purposes. The tax authority reduced the loan interest rate and denied financing costs and goodwill deductions. The taxpayer withdrew its appeal on the interest rate, conceding an arm's length violation, but the Federal Tax Court partially upheld the appeal in 2022, allowing goodwill amortisation and related financing cost deductions ... Read more

A food distributor in the Yogo Group, selling spices and canned goods across Austria and Germany, was assessed additional taxable income following an audit using a benchmark study. The company challenged the study's compliance with OECD comparability standards. Austria's Bundesfinanzgericht annulled the corporate income tax assessments for 2010–2012 and remanded the case, requiring the tax authority to conduct a proper functional and risk analysis before reapplying the TNMM ... Read more

An Austrian trading company deducted licence fees for trademark rights transferred to a Maltese permanent establishment during a 2007 group restructuring. The tax authority reattributed beneficial ownership of the trademarks to the Austrian operating company, disallowing the licence payments. The Verwaltungsgerichtshof upheld this position in 2020, finding that key decisions over trademark use, creation, and licensing remained with the Austrian entity throughout the relevant period ... Read more

A taxpayer holding 98% of a Swiss joint stock company provided a EUR 30 million interest-free shareholder loan with no written agreement. The Austrian tax authority imputed a 2% interest rate based on rates charged by the Swiss company to its Austrian and German affiliates. The Bundesfinanzgericht ruled in favour of the taxpayer in July 2019, rejecting the fictitious interest adjustment ... Read more

A Luxembourg company holding a 30% stake in an Austrian airport operator claimed a refund of withheld dividend tax. Austrian tax authorities denied the refund, treating the structure as abusive due to links to a Cayman Islands fund. The Federal Fiscal Court upheld the denial, but Austria's Administrative High Court reversed this in 2019, finding the Luxembourg parent had genuine economic substance and a valid business reason existed ... Read more

An Austrian GmbH developed and supported software exclusively for its Swiss sister company under a cost-plus arrangement with a 5% markup. The Austrian tax authority challenged the margin as too low for high-value, intangible-driven services, arguing the profit split method should apply. The Bundesfinanzgericht largely agreed with the authority in 2018, ruling the cost-plus method applicable but requiring a higher margin than originally applied ... Read more

An Austrian company providing marketing services transferred a valuable customer contract to a newly established Liechtenstein related party, paying purported goodwill and key account expenses in return. The Austrian tax authority disallowed the deductions, arguing the arrangement lacked substance and improperly shifted value offshore. The Verwaltungsgerichtshof upheld the tax authority's position in April 2018, confirming the transfer lacked arm's length justification ... Read more

An Austrian subsidiary distributing household appliances recorded cumulative losses from 2001 to 2005 under intra-group pricing arrangements with European group entities. Following a tax audit, authorities recalculated transfer prices using a benchmark study showing a median EBIT margin of 1.53%, treating the resulting adjustments as hidden profit distributions. The Unabhängiger Finanzsenat upheld the adjustments in 2012, confirming that a limited risk distributor must achieve a positive cumulative operating result over a foreseeable period ... Read more

A German company, A & W AG, operated a permanent establishment in Austria providing software distribution and support services. The Austrian tax authority applied a cost-plus mark-up of 7.5–9.5% to attribute profits to the PE, citing industry averages. The Unabhängiger Finanzsenat ruled predominantly in favour of the taxpayer in 2010, finding the authority's empirical references insufficiently specific and accepting the taxpayer's proposed 2% mark-up as appropriate ... Read more

A German company operating a software distribution and support permanent establishment in Austria contested tax authority assessments applying cost-plus mark-ups of 7.5–9.5% for FY 1998–2002. The Austrian Administrative Court found the mark-ups incomprehensible and insufficiently supported by comparable company data, remanding the case for re-examination. On remand, a 2% cost mark-up was ultimately accepted as appropriate ... Read more

A Vienna subsidiary of a German parent in weighing technology was remunerated on a cost-plus basis for sales agent and service activities. The Austrian tax authority challenged whether the 5% mark-up was arm's length. The Unabhängiger Finanzsenat in 2007 ruled mostly in favour of the tax authority, finding the applied mark-ups did not consistently meet the arm's length standard under a comparable cost-plus analysis ... Read more