Austria MOF Clarifies Capital Gains Taxation of Hidden Profit Distributions

The Austrian Federal Ministry of Finance April 23 posted online Federal Finance Court Decision No. RV/7100039/2020, clarifying the capital gains taxation of hidden profit distributions. The taxpayer, a foundation, was sole shareholder of a limited liability company (LLC) which wholly owned another LLC. Upon audit, withdrawals were determined to be hidden distributions to the taxpayer’s beneficiary, who was also the LLCs’ managing director. The taxpayer was assessed capital gains tax as debtor of the investment-related income. On appeal, the Federal Finance Court found that: 1) the payments were made available to the beneficiary for their private life, who didn’t receive ...