Double Tax Convention Austria-Germany

The present double tax convention between Austria and Germany was concluded in 1954 and has become the oldest tax treaty in force. For many years the tax administrations of the two countries have been negotiating a new treaty. In May 1998 the delegations succeeded in concluding the draft of a new double tax convention. The new convention is expected to become effective in 2000 and will then replace the present treaty. As Germany is Austria`s most important trading partner, the provisions of the treaty are of greatest practical importance for cross-border transactions. The Department of Austrian and International Tax Law at the University of Economics and Business Administration in Vienna aims to examine all articles of the new convention in detail. In addition, a comparison between the old and the new treaty provisions and also between the new treaty and the Model Tax Convention of the Organisation for Economic Co-operation and Development will be made. In this way, the present research project is designed to improve legal certainty for Austrian enterprises, private persons and the administrative authorities.

The aim of the project was the fundamental analysis of the new DBA A-G. Questions of interpretation causing legal uncertainty for practitioners involved in this area of law should be discussed. During the first year of our studies a seminar was held at the Vienna University of economics and business administration together with the Austrian Group of the International Fiscal Association. About 500 practitioners and scientists from Austria, Germany and Switzerland participated in the event. The lectures were published in the anthology "Das neue Doppelbesteuerungsabkommen Österreich - Deutschland". During the following year the project was continued with single publications. oUniv.-Prof. Dr. Wolfgang Gassner specialised on the change of methods and the reservation of abuse in accordance with the DBA draft. Moreover he dealt with the future of the Austrian treaty policy and, together with Univ.-Ass. Mag. Gerd Konezny, the asset-administering partnerships. oUniv.-Prof. Dr. Michael Lang dealt with problems of partnerships within the DBA-law. He concentrated on special remuneration being of enormous interest between Austria and Germany because of their historically comparable legal bases. Furthermore, he was concerned with problems of classification in connection with the taxation of partnerships, again particulary in the view of the new draft and the solutions proposed. Univ.-Ass. Mag. Gerd Konezny worked at the new special provision of the DBA that deals with the treatment of losses and is regarded as the first sign for a solution for the missing compensation of losses, which leads to double taxation. MMag. Dr. Josef Schuch dealt with the reservation of activation clause, laid down in Art 23 of the new DBA A - G. Mag. Gerald Toifl was concerned with earnings of artistes and sportsmen under the new DBA. MMag. Christoph Urtz concentrated on directors` fees to be subsumed under Art 16 par 2 of the new DBA. Mag. Ulf Zehetner was busy with the special provision for visiting professors, visiting teachers, students and trainees in compliance with Art 20 of the draft. Within another publication he dealt with the employers` quality of partnerships under Art 15 par 2 OECD - MC in view of the provisions of the DBA draft. Mag. Mario Züger was obsorbed in the arbitration proceedings and discussed the new arbitration clause of the draft between Austria and Germany. Moreover he dealt with the competence of the ECJ as it is provided in the DBA and he examined the influence of that ECJ arbitration proceeding on the revenue law.