The Austrian tax authority has once again released a statement on home office as a permanent establishment of a foreign company in Austria (EAS 3432 from 1.6.2021). We have already informed you about this topic in previous newsletters.
In this statement - EAS 3432 - the tax authority confirms that the Austrian private home of an employee can be a permanent establishment for the foreign employer, both under Austrian tax law and under the law of double taxation agreements.
If the employee only performs preparatory or auxiliary activities in his home, this activity does not constitute a permanent establishment of the employer. However, this activity must be performed for the own company (= the employer's company) and not for e.g. another company in the group.
Please note that the assessment of whether it is a preparatory or auxiliary activity can only be done in each individual case.
The permanent establishment problem affects not only the employment by an Austrian employer with an employee abroad who performs his work in this foreign home office but also the reverse case. Please have in mind that a subsequent determination of the tax liability of a home office as a permanent establishment will cause a double taxation.
Wien, September 2021