Tax Treaty Case Law around the Globe 2022

S. 305Chapter 26: Austria: Employment Income vs. Directors’ Fees and the Role of Authentic Languages in Treaty Interpretation: Austrian Supreme Administrative Court, 10 May 2021, Ra 2019/15/0095

Daniel W. Blum

26.1. Introduction

In its decision from 10 May 2021, the Austrian Supreme Administrative Court had to decide whether Austria – pursuant to the Austria-Russia Income and Capital Tax Treaty (2000) – was entitled to tax the employment income received by three managing directors of an Austrian limited liability company who, while having their home in Austria, performed at least major parts of their management activities in Russia. Based on the assumption that all directors were in fact residents of Austria for both domestic and tax treaty purposes, the court of first instance (Federal Fiscal Court) had held that – from a domestic income tax perspective – the Austrian limited liability company was required to deduct wage taxes from the remuneration paid to the directors. It had, however, failed to address the question of how the applicable double tax treaty would affect Austria’s material right to tax the employment income. In its decision, the Austrian Supreme Administrative Court, thu...