Austria MOF Clarifies Taxation of Rental Income From Luxury Apartments

The Austrian Federal Ministry of Finance Feb. 16 posted online Federal Finance Court Decision No. GZ. RV/4100278/2022, clarifying the tax treatment of rental income. The taxpayer purchased two luxury apartments in a resort complex. He contracted for a hotel operator to rent them out for exclusive tourist use. The tax office refused to recognize either property as a source of income under the hobby ordinance. It also denied an input VAT deduction because it deemed the properties to be exempt “small rentals.” The tax office issued a preliminary decision dismissing the taxpayer’s appeal, finding no overall surplus could be expected ...