In two recent replies of the Express Answer Services (EAS), the Austrian tax authorities have, for the first time, commented on the Tax Treaty Relief Regulation. The main outcome of these replies is that due to the strict requirements of the Tax Treaty Relief Regulation, withholding tax relief at source may be inadmissible even if there is no doubt about the applicability of the tax treaty. Against the background of this unsatisfactory result for the income recipient, a consultation agreement was recently concluded between Austria and the United Kingdom, which intends to allow withholding tax relief at source in certain cases, even though the Tax Treaty Relief Regulation compulsorily provides for the refund procedure. The question arises as to whether, and if so in what form, withholding tax relief at source may also be possible in relation to other countries without undermining the purpose of the Tax Treaty Relief Regulation.
