Austria MOF Clarifies Corporate Income Tax, VAT Treatment of Housing Provided as Hidden Profit Distribution

The Austrian Federal Ministry of Finance Sept. 23 posted Federal Finance Court Decision No. RV/3100894/2017, clarifying the VAT and corporate income tax treatment of housing provided as a hidden profit distribution. The taxpayer, a company, made improvements to a company-owned apartment that it rented to its sole shareholder and managing director. Following an audit, the Tax Office assessed additional corporate income tax and VAT liability and denied input VAT deductions on the grounds that the improvements were hidden profit distributions. On appeal, the Federal Finance Court found that: 1) the taxpayer wasn’t entitled to an input VAT deduction because the ...