Group taxation regime : a landmark model

The new Austrian group taxation regime was introduced by the Tax Reform Act 2005 which became effective on 1 January 2005, in anticipation of the decision of the European Court of Justice in the Marks & Spencer case. It has been acknowledged as one of the most competitive regimes in the world due to its flexibility and cross-border tax relief granted for losses incurred by foreign subsidiaries. This article highlights the details of the new system, taking into account the official interpretation by the Ministry of Finance as laid down in the guidelines for the taxation of groups.