AUSTRIA: Requirements for a tax-neutral repayment of contributions from foreign non-charitable private foundations in Austria—first decision of the Supreme Administrative Court

Austrian tax law provides that distributions made by non-charitable private foundations may qualify as tax-neutral repayments of contributions (‘Substanzauszahlung’). This requires the documentation of both the so-called ‘relevant value’ based on Austrian Generally Accepted Accounting Principles ‘GAAP’ (‘maßgeblicher Wert’) and the ‘contribution values’ (‘Stiftungseingangswerte’). In a recent case of a distribution in 2018 from a non-charitable Liechtenstein foundation to an Austrian tax resident, tax-neutral treatment was denied due to inadequate documentation of these values. Although the Supreme Administrative Court dismissed the appeal on formal grounds, the Court, however, generally confirmed that distributions from foreign non-charitable private foundations may qualify as tax-neutral repayments of contributions.