By a conversion of an Austrian corporation into a permanent establishment of its shareholder or into a partnership of the former shareholders existing tax loss carry-forwards of the Austrian corporation will generally be transferred to the shareholder or to the partners of the partnership. If the shareholder is not resident in Austria, the tax loss carry-forwards may be charged against future profits of the
Austrian permanent establishment only under the restriction of section 102 paragraph 2 sub-paragraph 2 of the Austrian Income Tax Act. Due to both the new Double Taxation Treaty between Germany and Austria and an administrative order, this restriction is not more applicable for losses suffered by an Austrian permanent establishment of a German resident.

Tax loss carry-forwards transferred to a German resident shareholder in course of a conversion may be charged against future profits the German resident will gain in Austria independently from the restriction of the last sentence of section 102 paragraph 2 subparagraph 2 of the Austrian Income Tax Act.