Tax Treaty Case Law around the Globe 2015
1. Aufl. 2016
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S. 95Austria: Constitutional Review of Tax Treaties
Alexander Rust
I. S. 96Facts of the case
The taxpayer is an individual resident in Austria. He earned part of his income in Liechtenstein. He had an office in Liechtenstein and worked there as a journalist, as a writer and as a scriptwriter and was involved in the production of books, flyers and magazines.
In Austria, he was taxed on his world-wide income including the income from his activities in Liechtenstein. The taxpayer appealed against the tax assessment arguing that the income attributable to his fixed base in Liechtenstein was exempt in accordance with Articles 14 and 23(1) of the Austria – Liechtenstein DTC (1969). The tax administration argued that his income was not covered by Article 14 but rather by Article 7 of that treaty and, as a result, Austria was not obliged to grant an exemption but only had to grant a credit for the taxes levied in Liechtenstein in accordance with Article 23(2) of the DTC. Austria applied the exemption method to income from independent personal services attributable to a fixed base and the credit method to business income attributable to a permanent establishment in Liechtenstein. As the effective tax rat...