Austria MOF Clarifies Tax Treatment of Residential Property Constructed, Leased to Sole Shareholder

The Austrian Federal Ministry of Finance Aug. 14 posted Federal Finance Court Decision No. RV/2101128/2018, clarifying the tax treatment of residential property constructed and leased by a company to its sole shareholder. The taxpayer, a company, built a home on land owned by its sole shareholder and leased it to him. The Tax Office assessed the taxpayer VAT and corporate tax. The taxpayer argued that the lease was legitimate and that the property was used partly for business purposes. On appeal, the Federal Finance Court held that: 1) the lease arrangement didn’t reflect a market-based transaction and lacked sufficient documentation; ...