Tax planning and transfer of permanent residence to Austria.
If you are going to move permanent residence in Austria, you will have to think about tax planning. For those who possess the citizenship of one of the member states of the European Community, moving to Austria is not subject to immigration restrictions on obtaining a residence permit, business and work permit, and the purchase of real estate in Austria. It should be noted here that the acquisition of real estate in Austria does not formally have a positive effect on obtaining a permanent residence permit in Austria for those who do not have EU citizenship.
The transfer of permanent residence in Austria only for reasons of a tax nature hardly makes sense. However, the change of the country of permanent residence has a direct impact on taxation and planning in this area will help optimize costs.
In a somewhat simplified form, we can say that if you spend more than three months a year in Austria, even without working, you can think about the issue of the place of tax jurisdiction. In case the residence in Austria exceeds the period of six months in a year, as a rule, one can proceed from the fact that Austria becomes the place of taxation.
When transferring permanent residence to Austria, it is also necessary to pay attention to the provisions of the tax code of the original country. In some cases, the national tax rules provide for a tax for the transfer of permanent residence abroad.
It can be said that in those cases when interstate agreements provide for the avoidance of double taxation, the place where taxes can be calculated and paid can be considered the state in which a permanent place of residence is located. In more detail, the so-called tie-breaker rules are used. For example, in the case where a permanent place of residence is in two states, it is necessary to determine in which of the states the center of vital interests is located. If this paragraph does not clarify, the decision is made on the basis of citizenship. In practice, it can be assumed that if a residence permit is obtained in Austria on the basis of doing business, Austria is chosen as the permanent place of residence and, accordingly, general taxation takes place in Austria.
Austria has concluded an agreement on avoidance of double taxation with a large number of countries. Unlike Switzerland, agreements on avoidance of double taxation with Austria do not contain significant restrictions. Tax planning for the transfer of permanent residence to Austria can often bring tax benefits.