In its decision of March 13th, 2024, RV/7100082/2022, the Austrian Federal Tax Court dismissed as unfounded an appeal against a decision by the Ministry of Finance denying the elimination of double taxation for the years 2000 to 2019 requested on the basis of Sec 48 para 5 Federal Tax Code. It concerned the exemption of income taxed in Liechtenstein or, alternatively, the crediting of tax paid in Liechtenstein. The proceedings for the elimination of double taxation pursuant to Sec 48 para 5 Federal Tax Code were preceded by another legal dispute concerning income tax for the years 2000 to 2007, which the Federal Tax Court ruled on in its decision of March 7th, 2016, RV/1100089/2012. The Austrian Supreme Administrative Court rejected the appeal lodged against this decision in its ruling of May 29th, 2018, Ra 2016/15/0062. The cause of the double taxation was, on the one hand, an allocation conflict. On the other hand, there was also a conflict of residence: The Liechtenstein tax administration assumed that the taxpayer was resident in Liechtenstein under the existing tax treaty between the two countries, while the Austrian tax administration assumed that the taxpayer was resident in Austria. A mutual agreement procedure carried out in accordance with Art 25 of the tax treaty between Austria and Liechtenstein for the years 2000 to 2013 failed in 2018. In both countries, the tax authorities therefore continued to assume that their own country had the right to tax as the country of residence under the tax treaty. Thus, in addition to double taxation due to the aforementioned allocation conflicts, there was also double taxation of income of the same taxpayer.
