The Austrian Federal Fiscal Court recently decided on the interpretation of the method article of the Austrian tax treaty with Malta and stated that – contrary to its German but following its English wording – the exemption method can also be applied when income is taxable both in Austria and Malta. It hereby rejected the position of the Austrian tax administration according to which the exemption method can exclusively be applied when “only" the source state, in the present case Malta, has the right to tax a certain type of income, and followed an interpretation of the method article that was suggested in literature instead.Gustavo Weiss de Resende, Benjamin Beer and Stefan Pregesbauer analyze the decision by the Austrian Federal Fiscal Court.
