Austria MOF Clarifies Capital Gains Taxation of Hidden Profit Distributions

The Austrian Federal Ministry of Finance April 17 posted online Federal Finance Court Decision No. RV/5101102/2020, clarifying the capital gains taxation of hidden profit distributions. The taxpayer, an individual shareholder and managing director of a limited liability company, was held liable for unpaid capital gains tax for 2010 and claimed the amount paid as deductible business expenses in her 2018 income tax return. The taxpayer argued that managing director liability payments are generally deductible as advertising expenses. On appeal, the Federal Finance Court dismissed the taxpayer’s appeal, finding that: 1) the capital gains tax stemmed from a hidden distribution; 2) ...