Austrian Court Rules on Tax Treatment of Company-Leased Property to Sole Shareholder

• The Austrian Federal Ministry of Finance posted a Federal Finance Court Decision on August 14.
• The decision clarifies the tax treatment of residential property constructed and leased by a company to its sole shareholder.
• The company built a home on land owned by its sole shareholder and leased it to him.
• The Tax Office assessed VAT and corporate tax on the company.
• The company argued the lease was legitimate and partly for business purposes.
• The Federal Finance Court found the lease arrangement was not market-based and lacked documentation.
• Property-related expenses could not be deducted for corporate tax purposes.
• The lease was classified as a hidden or root-level distribution.
• The company’s activities did not constitute a taxable business use under VAT law.
• The property was considered part of the shareholder’s private sphere.

Source: news.bloombergtax.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

---

---