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CONVINUS Global Mobility Insights NEWSLETTER Frühling / Spring 2023

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Global Mobility Insights - Frühling / Spring 2023 with the tax office and registration of employees Registration An Austrian branch of a foreign company is liable to tax with regard to corporate income tax and turnover tax. It must therefore apply for a tax number. Registration of employees with the competent social insurance institution prior to commencement of work. In principle, the legal employer is the parent company, especially since branches do not have their own legal personality. Through a permanent establishment: A permanent establishment is a fixed place of business through which the activities of an enterprise are wholly or partly carried on. The difference to a branch office is that it is not entered in the commercial register. In the case of a permanent establishment, analogous to a branch office, turnover and corporate income tax aspects must also be taken into account. Below all the bullet points should be as shown or an arrow like the rest because to my understanding the points are all related to the main heading above. Only registration with the tax authorities required (no entry in the AT commercial register!). Limited tax liability in respect of results attributable to the permanent establishment. Registration of employees working at the permanent establishment with the competent health insurance institution prior to commencement of work. Business registration, if applicable. Through a sole proprietorship: The operator of a sole proprietorship is always a natural person who has unlimited liability with his or her private assets. The enterprise has no legal personality. The income is subject to the standard tax rate (progressive up to 50%). The sole proprietorship is founded by starting business. As a rule, a business registration must first be made. If a regulated trade is exercised, a certificate of competence is required. Registration in the commercial register is voluntary up to a turnover of EUR 700,000; after exceeding EUR 1,000,000 twice or once, registration 30

Global Mobility Insights - Frühling / Spring 2023 is mandatory. The addition of the legal form "registered entrepreneur" or "eU" is then mandatory. Profits are determined by means of income-expenditure accounting or, if the turnover limits are exceeded, by means of double-entry bookkeeping. In addition, sole proprietors are subject to commercial social insurance. Tax registration with the tax office must be carried out if the taxpayer is not already registered. An income tax return and, if applicable, a turnover tax return must be submitted. A sole proprietorship is the most popular form due to its lowcost administration. This is quick and easy to set up. By a legal entity (e.g., limited liability company) The advantage of founding a GmbH as opposed to a sole proprietorship is primarily the economic risk of the shareholders, which is limited to the respective capital contribution. On the other hand, however, there is the obligation to keep doubleentry accounts, the duty to disclose information to the commercial register and the obligation to make declarations (turnover and corporate income tax). Depending on the size, an audit of the annual financial statements may also be mandatory. Necessary steps: Conclusion of a partnership agreement in notarial form (simplified formation possible for single-member companies without notarial deed). Minimum content: - Name and registered office of the company - Object of the company - Amount of the share capital - Capital contribution of the individual shareholders Minimum share capital for a GmbH: EUR 35,000 (AG: EUR 70,000), of which EUR 17,500 must be paid in cash at the time of formation (possibility of applying for privileged formation: EUR 10,000, of which EUR 5,000 must be paid in cash at the time of formation, it must be increased to the regular cash contribution of EUR 17,500 within 10 years). 31

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