On 1 August 2016 the Austrian Transfer Pricing Documentation Act was officially published in Federal Law Gazette (Bundesgesetzblatt) I No. 77/2016. Therewith it became official that the three-tiered standardized approach to transfer pricing documentation, as proposed by the OECD, including Master File, Local File and Country-by-Country Reporting, is obligatory in Austria.
Who is affected?
For Austrian resident entities, there are two relevant thresholds to be obeyed:
- In case the total consolidated group revenue equals at least EUR 750 Mio, a Country-by-Country Reporting shall be generated.
- In case the total revenue of the Austrian group entity exceeds EUR 50 Mio, a Master File and a Local File shall be generated.
Furthermore, an Austrian entity is also obliged to provide the Master File if a related foreign entity has to create a Master File under the applicable regulations of another state. In other words, if a Master File has been prepared for the MNE group, the Austrian Tax Authorities will be entitled to receive it. Furthermore, the general documentation requirements derived from the Federal Fiscal Code are still in place for Austrian entities with revenues below the EUR 50 Mio threshold.
When should the documentation be prepared?
The documentation duty refers to fiscal years beginning on 1 January 2016 or later. While the Country-by-Country Reporting shall be provided to the tax authorities no later than twelve months after the last day of the specific fiscal year, the tax authorities may request the Master File and Local File within 30 days after the filing of the CIT return was made.
Are there any penalties?
According to the new Section 49b Fiscal Penal Act, intentional or grossly negligent misstatement in the CbCR may trigger a penalty of up to EUR 50,000. The same applies, in case the Country-by-Country Report is not transmitted on time. It should be noted that the penalty can be imposed per perpetrator and the total amount of the penalties in an individual case may therefore be substantially higher than EUR 50.000.
As the final regulation corresponds to the government bill, please refer to the related articles already published in our Tax News:
- Article of 17.6.2016 about the Government bill of the VPGD
- Article of 18.5.2016 about the draft of the VGPD
The specific content of the Master File and of the Local File will be determined by way of a Directive by the Austrian Ministry of Finance.
For the first time in Austria, there are specific regulations for a mandatory transfer pricing documentation in place. Since the first half of the reporting year 2016 has already passed, preparations for the documentation and the coordination within the group should be commenced without delay.
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