Austria updates

Corporate Finance/M&A

Supreme Court rules on exclusion of liability for acquisitions via asset deals
  • Austria
  • 19 August 2015

The Supreme Court recently ruled on the requirements for exclusion of liability clauses during an asset deal. In its decision, the court rejected a new theory supported by the appeal court and classified supplementary capital in the form of bank bonds as a business-related legal relationship. The court's decision affirmed the legitimacy of exclusion of liability clauses under the Commercial Code.

Potential implications for M&A community following FMA's moratorium on HETA
  • Austria
  • 29 April 2015

The M&A community is awaiting buying opportunities to arise from the dissolution of Austria's bad bank, HETA Asset Resolution AG. However, if the Recovery and Resolution of Banks Act is found to be in breach of the EU Bank Recovery and Resolution Directive, not only will the FMA's decision be on shaky grounds, but also potentially any M&A transaction or sale processes initiated by the FMA on the basis of its decision.

Supreme Court rules on non-codified competence of shareholders
  • Austria
  • 11 February 2015

The Supreme Court recently clarified and commented on the Holzmüller doctrine with regard to the unwritten competences of shareholders. While the ruling explicitly carved out the issue of whether the doctrine applies in Austria, it also clarified the legal fate of transactions (in this case, an acquisition of hotels) entered into by a management board without first obtaining shareholder approval.

Legal fate of power of attorney in corporate restructuring
  • Austria
  • 10 December 2014

A recent Supreme Court case focused on the legal fate of a power of attorney issued by a particular company and a waiver served under this power of attorney after corporate restructurings took place. The main question before the court was whether the power of attorney was validly transferred in the course of a spin-off and merger.

Enhanced disclosure for stake building in public M&A transactions
  • Austria
  • 16 October 2013

As a result of implementing the EU Transparency Directive, the Austrian legislature introduced enhanced disclosure rules for significant shareholdings in stock exchange-listed companies. One main purpose of the enhanced disclosure rules is to reduce the possibilities for hidden stake building in public M&A transactions. However, the new rules leave significant room for interpretation.


Corporate Tax

Interim tax in connection with non-resident beneficiaries
  • Austria
  • 20 November 2015

The Supreme Administrative Court recently sought the European Court of Justice's (ECJ) guidance on whether a private foundation's right to deduct gifts from its taxable income is contingent on the beneficiary being subject to Austrian withholding tax. The ECJ held that the interim taxation system for Austrian private foundations does not comply with EU law. This judgment should make private foundations with non-resident beneficiaries more attractive.

Tax Reform 2005 Provides Tax-Planning Opportunities
  • Austria
  • 30 April 2004

The Ministry of Finance has published a draft of the Tax Reform Act which outlines significant changes to the domestic corporate tax law system. The new group taxation rules may yet be subject to some amendments. In any case, the new rules will give rise to substantial tax-planning opportunities and existing groups will have to adapt to the new requirements in order to take advantage of the regime.

Legislature Implements Interest and Royalties Directive
  • Austria
  • 13 February 2004

The Tax Amending Law 2003 integrates the EU Interest and Royalties Directive into national law. By implementing the directive, Austria follows Luxembourg, the Netherlands and Denmark, all of which have amended their respective income tax laws in compliance with the directive.

Tax Authorities Remain Free to Interpret Investment Fund Guidelines
  • Austria
  • 07 November 2003

The Ministry of Finance recently published the new Investment Fund Guidelines 2003. The guidelines represent an interpretation manual that shall be used by tax authorities and taxpayers, and already apply to tax assessments for 2003. In the ministry’s opinion, the guidelines may also be relevant in pending tax cases unless they contradict earlier statements published by it.

Parliament Approves Changes to International Participation Regime
  • Austria
  • 27 June 2003

The National Council of the Austrian Parliament has adopted a draft law that provides for significant changes to the international participation exemption. The law is likely to enter into force this year and should therefore be considered within the framework of possible (re)structuring.


Derivatives

New disclosure requirements create challenges for investors
  • Austria
  • 16 January 2013

The Stock Exchange Act has recently been amended to extend significantly disclosure obligations for shareholdings in listed companies. The main objective is to capture arrangements, in particular derivatives, which previously escaped major shareholding disclosure rules, even though they could be (and were) used for stake-building purposes in Austrian listed companies.

Application of long disclosure rules on derivatives
  • Austria
  • 17 August 2011

Under the Stock Exchange Act, persons that directly or indirectly acquire or sell shares of an issuer whose shares are admitted to trading on a regulated European Economic Area market must declare when the proportion of voting rights changes in accordance with stipulated thresholds. Failure to comply with the share disclosure regime is an administrative offence and may result in a fine of up to €30,000.


E-commerce

Prohibiting Domain Names Based on Another Person's Name Rights
  • Austria
  • 06 August 2009

In a conflict between a domain name and another person's trademark the content of the domain is key. In a recent decision the Supreme Court had to decide whether to apply the same principle if the conflict is between a domain name and another person's name.

Is Austria Losing its Domain Identity?
  • Austria
  • 03 February 2005

The Hamburg Landgericht has issued a surprising ruling that the country-code top-level domain (ccTLD) '.at' has no direct reference to Austria. The court reached a general conclusion that ccTLDs do not possess sufficient distinction to impose residency requirements on the registrant of such a domain name.

Supreme Court Rules on WIPO Procedure Costs
  • Austria
  • 28 October 2004

For the first time, the Supreme Court has ruled on the issue of whether the costs of a World Intellectual Property Organization (WIPO) procedure for a domain name dispute can be claimed as damages from the defeated party.

Can Pornographic Websites be Classed as Information Services?
  • Austria
  • 29 April 2004

The Supreme Court has clarified two aspects of the E-commerce Act, defining the main features of the term 'information services' and specifying contact details that ought to appear on websites. The defendant in question advertised websites where the price of goods and services was not displayed, as well as free access to live webcam transmissions when in fact access was not free.

Does ISP Web Hosting Constitute Data Processing?
  • Austria
  • 11 March 2004

The Austrian Data Protection Commission recently decided that an internet service provider which offers website hosting services is a data processor under the EU Data Protection Act. The commission ruled that a person who processes personal data merely by storing it is considered to be a processor if he acts in accordance with the instructions of the controller.


Employment & Immigration

Applying for a Vander-Elst Visa From Within the Country
  • Austria
  • 03 November 2006

Austrian law generally requires applicants for a Vander-Elst visa to apply from outside the country, as applications submitted from within Austria are automatically denied. However, the European Court of Justice has now ruled that such automatic refusal is disproportionate and is thus in violation of EU law.

Can a Share Deal Constitute a Transfer of Business?
  • Austria
  • 12 January 2005

A recent Supreme Court decision has confirmed the opinion that a share deal in regard to an entity is not a transfer of business as the employer does not change. A change of all or parts of an entity's shareholders does not qualify as a transfer of business.

Domestic Legislation Catches Up with EU Policies
  • Austria
  • 06 October 2004

The Act on Equal Treatment has been amended in light of the EU directives which implement the principle of equal treatment between persons, irrespective of racial or ethnic origin, and establish a general framework for equal treatment in employment and occupation.

Supreme Court Throws Termination of Employment Contracts into Spin
  • Austria
  • 28 July 2004

A recent Supreme Court ruling indicates that a termination of employment by mutual agreement which coincides with a transfer of business is null and void unless concluded solely in the employee's interests (ie, to allow him or her to find another job).

Supreme Court Rules on Employer Liability in Business Transfers
  • Austria
  • 23 June 2004

The Supreme Court recently considered the issue of whether an employer that takes over a company is entitled to indemnification from the former employer in relation to employees' severance pay, holiday pay and compensation for leave not taken.