Recently, the Austrian Ministry of Finance published guidance on the automatic and spontaneous exchange of information on advance cross-border rulings and advance pricing arrangements.
The guidance note (20 October 2016, BMF-010221/0708-VI/8/2016) first explains the terms "advance cross-border ruling" and "advance pricing arrangement". In particular, it clarifies that information exchange obligations not only apply in connection with formal rulings pursuant to sec. 118 of the Federal Fiscal Procedures Act (Bundes abga- benordn ung) and bi- or multilateral advance pricing arrangements concluded pursuant to income tax treaties, but also in connection with informal rulings on which a taxpayer may rely under certain circumstances based on the general principle of equity and good faith (Grunds atz von Treu und Glauben).
Secondly, the guidance note deals with cases in which automatic or spontaneous exchanges of information have to take place:
With respect to other EU Member States, information generally has to be exchanged automatically as follows: (i) within three months of the end of the half of the calendar year of issuance, amendment or renewal in case of rulings and arrangements which were issued, amended or renewed after 31 December 2016; and (ii) before 1 January 2018 regarding rulings and arrangements which were issued, amended or renewed after 31 December 2011 and before 1 January 2017 (regarding rulings and arrangements which were issued, amended or renewed before 1 January 2014, this only applies if they were still valid on 1 January 2014).
With respect to third countries, information is to be exchanged spontaneously. The legal basis for this is (i) art. 7 of the Convention on Mutual Administrative Assistance in Tax Matters; or (ii) provisions contained in income tax treaties concluded by Austria corresponding to art. 26 of the OECD Model Convention. The guidance note refers to the following cases covered by BEPS Action 5: (i) rulings related to preferential regimes with low or no taxation; (ii) cross-border unilateral advance pricing arrangements or transfer pricing rulings; (iii) cross-border advance rulings giving a downward adjustment to profits; (iv) cross-border advance rulings on the (non-) existence of permanent establishments and/or the attribution of profits to permanent establishments; and (v) conduit rulings. The exchange of information has to take place:
(i) within three months from issuance, amendment or renewal in case of rulings and arrangements which were issued, amended or renewed after 31 March 2016; and (ii) before 1 January 2017 regarding rulings and arrangements which were issued, amended or renewed after 31 December 2009 and before 1 April 2016 (regarding rulings and arrangements which were issued, amended or renewed before 1 January 2014, this only applies if they were still valid on 1 January 2014).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
