Austria’s interim tax on private foundations continues to raise EU law concerns, particularly where distributions are made to non-resident beneficiaries. Although the 2015 reform linked interim tax relief to the principle of single taxation, foundations remain disadvantaged whenever withholding tax is reduced under a tax treaty. While the Federal Fiscal Court sees this as a clear violation of the free movement of capital, the Supreme Administrative Court questions comparability and relies on parallels to dividend taxation. The pending CJEU decision will likely depend on whether it follows its earlier ruling on F.E Familienprivatstiftung Eisenstadt or its dividend case law. Under the current regime, the risk of EU law violation remains substantial. This contribution examines the relevant case law, focusing on the CJEU’s reasoning on comparability and possible justifications.
