Austria MOF Clarifies Capital Gains Taxation of Hidden Profit Distributions

The Austrian Federal Ministry of Finance Sept. 23 posted Federal Finance Court Decision No. RV/2100705/2016, clarifying the capital gains taxation of hidden profit distributions. The taxpayer, the managing director and sole shareholder of a company, withdrew funds from the company before it declared bankruptcy. The Tax Office assessed capital gains tax directly on the taxpayer after concluding that the withdrawals were hidden profit distributions. The taxpayer appealed, arguing that the tax should have been assessed on the company. On appeal, the Federal Finance Court found that: 1) the withdrawals constituted hidden profit distributions because the taxpayer, as the managing director, ...