In June 2005 the Minister of Finance released an ordinance setting out the conditions under which relief at source can be granted by Austrian paying agents under Double Taxation Conventions. According to the basic concept of the ordinance the debtor of remuneration payable to non-residents may decide on his own whether or not he wishes to grant relief at source when the payments are made or whether he prefers withholding of the Austrian source tax in full and leaving it to the recipient of the income to claim tax refund at the Revenue Office of Eisenstadt. Only in specified cases the refund system is mandatory.

Should the paying agent choose the relief at source system is he responsible to keep all the necessary documentation enabling him to justify that the relief from tax has been granted under treaty obligations. In order to assist taxpayers in obtaining the necessary documentation two forms have been developed in a download version (www.bmf.gv.at) which require certification of the foreign tax administration if the annual payments exceed 10,000 Euro. The article reveals some background information with regard to this ordinance.