Customs Code Amendment Act and Reform of self-incrimination passed by Federal Council

Against the recommendation of its Finance Committee, the Federal Council on 19.12.2014 passed the Customs Code Amendment Act. The rejection of the bill by the Federal Council and reference to the Mediation Committee was thereby avoided at the last minute.

A promise of the Federal Government to implement in 2015 tax changes demanded by the Federal Council’s Finance Committee’s preceded the decision. Specifically, in 2015, in a new legislative process the following points, inter alia, are to be implemented:

• limitation of consideration for contributions according to §§ 20,21 and 24 VAT Act to 10% of the contributed assets, 
• introduction of the correspondence principle in deduction of business expenses to avoid “untaxed income” and “double-dip structures” in § 4 ss. 5a Income Tax Act.

On the other hand, the following, inter alia, were implemented by the Customs Code Amendment Act: 

• the application of the principle of partial deduction in the case of shareholder loans to companies to be attributed to business assets (Sec. 3c ss. 2 Income Tax Act).
• the changes for employers with regard to the employer’s contribution to the solvency margin (Sec. 19 ss. 1 sentence 1 Income Tax Act).
• the tax exemption for employer payments for short-period childcare and services in connection with the care (Sec. 3 No. 34a Income Tax Act).
• the tax exemption for investment supplements for venture capital in the case of business angels (Sec. 3 No. 71 Income Tax Act).
• the introduction of a 5,000 euro limit above which a reversal of the tax liability occurs in respect of
• the supply of precious metals, non-precious metals, selen and cermets.
• the authorisation of the BMF (Federal Ministry of Finance) to extend the tax liability for limited periods in cases of abuse (Sec. 13b ss. 10 VAT Act).
• the monthly obligation to make VAT returns for shelf and shell companies (Sec. 18 ss. 2 VAT Act).
• the extension of the identification numbers (e.g. to permanent establishments).

Agreement on reform of self-incrimination

The Federal Council also passed reforms of self-incrimination on 19.12.2014. From 1.1.2015, therefore, inter alia, the rules will be tightened as follows:

• penalties increased from the present 5% to at least 10% and maximum 20% depending on the amount evaded,
• extension of the blocking grounds for self-incrimination to agents and accessories and to VAT or Wages Tax revision,
• introduction of revised declarations for 10 years as a condition for self-incrimination with release from criminal proceedings,
• interest payments are now included in the amount payable for self-incrimination with release from criminal proceedings
• deferral for capital yields from third countries without automatic exchange of information (§ 170 ss. 6 Tax Coe-E)

There are reliefs for businesses concerning the reintroduction of partial self-incrimination with regard to the making of corrected VAT returns and wage tax returns and the limitation of blocking grounds for self-incrimination with release from criminal proceedings to the auditing period and the audited taxes.