Category: Austria

PHH Rechtsanwalte has advised Banijay Germany on its acquisition of a stake in Influence.Vision. Dorda advised the sellers.

Founded in 2018, Banijay Germany is a collection of independent producers and entrepreneurs, part of the Banijay Group. The group has over 120 production companies in 22 territories.

Founded in 2017, Influence.Vision is an Austrian start-up providing solutions for influencer marketing, connecting brands and content creators on a common platform.

“The exciting thing about this partnership is that we have a common vision with Banijay that is very unique in the current influencer market,” Influence.Vision Co-Founder & Co-CEO Florian Boesenkopf commented. “Influencers and content creators are more than just pure reach, they are digital story makers in their own right. The group and its creatives have been helping to shape the zeitgeist of our society for many years and, as a tech player, we can use it to connect the best content creators and artists under one brand and develop the most creative concepts for advertisers.”

The PHH Rechtsanwalte team was led by Counsel Philip Rosenauer and included Partners Rainer Kaspar, Nicolaus Mels-Colloredo, Annika Wolf, and Julia Fritz, Senior Associate Wolfgang Guggenberger, and Associates Johannes Hubert Metzler, Ramona Maurer, and Dominic Zehetgruber.

The Dorda team included Partners Jurgen Kittel and Heinrich Kuhnert and Attorney-at-Law Lukas Herrmann.

The pioneering Austrian legislator is breaking new ground in the area of crypto taxation. Income from cryptocurrencies will no longer be taxed progressively, at up to 55% for individuals, but at a flat rate of 27.5% withholding tax. With these rules, the Austrian legislator has brought clarity to the taxation of crypto assets for the first time and has responded to the increased practical relevance of cryptocurrencies and the need to tax them in line with securities. The previous taxation of crypto assets was mainly based on non-binding information from the homepage of the Austrian Ministry of Finance.

How Crypto Assets Used to Be Taxed

Income from the sale of cryptocurrencies acquired prior to March 1, 2021, is subject to a one-year speculation period. It is therefore tax-exempt if the cryptocurrencies are sold after the expiry of this period. If, on the other hand, the cryptocurrencies are sold prior to the expiry of the speculation period, the income thus generated is subject to a progressive income tax of up to 55% for individuals or 25% for corporations.

Transitional Rules on Crypto Asset Taxation

Cryptocurrencies acquired after February 28, 2021, but sold by February 28, 2022 (inclusive), are still subject to the above-mentioned provisions. Crypto gains deriving from transactions before December 31, 2022, have to be declared in an income tax statement, while from January 1, 2023, crypto gains will be taxed via a withholding tax – if the crypto trading provider has an adequate Austrian nexus (e.g., through a registered office).

The New Way Crypto Assets Are Taxed

Income from cryptocurrencies can be either (1) ongoing income or (2) income from realized appreciation (e.g., sale).

As of March 1, 2022, gains from the sale of cryptocurrencies are subject to the special income tax rate of 27.5% for individuals or 25% for corporations. The prerequisite for this flat tax rate is the existence of a public offering of these cryptocurrencies – as swaps between cryptocurrencies do not constitute a taxable event. In such cases, the acquisition costs are continued by the swap, and the taxation of the hidden reserves is delayed until actual disposal takes place.

If the cryptocurrency services only consist of the use of existing cryptocurrencies (staking), or cryptocurrencies are transferred without consideration (airdrops), or for only insignificant other services (bounties), the acquired cryptocurrencies do not constitute ongoing income. The profits thus generated are not taxed until they are finally realized.

Furthermore, as of March 1, 2022, it is also possible to offset losses with other income from capital assets that are subject to the special tax rate of 27.5%. These are, for example, gains or losses from the sale of securities or bonds, interest from bonds, dividends, etc. The loss compensation is to be exercised within the annual tax return.

The classification of cryptocurrencies as income from capital assets also means that the provisions on exit taxation will apply. If Austria’s right to tax these cryptocurrencies is restricted during a departure, the hidden reserves accrued until the departure must be taxed in Austria. In the case of a physical departure of individuals to EU/EEA states, taxation may be deferred (but not entirely avoided) upon application.

It is essential to document crypto holdings in the tax treatment of cryptocurrencies, especially as there are economic consequences for failing to do so. The person required to deduct must assume that the acquisition costs amount to half the fair market value – if the acquisition date is not known or documented. The special tax rate of 27.5% is applied to these fictitious acquisition costs, which corresponds to an effective taxation of 13.75%.

Conclusion

The new rules on crypto taxation at least guarantee legal security in connection with the taxation of cryptocurrencies in Austria. In any case, Austria is a trailblazer internationally in this regard since, to be able to assess taxable income, Austrian crypto platforms will be required to withhold and pay withholding tax for the respective taxpayers. This exchange of data with the Austrian tax authorities may also lead to a new wave of voluntary self-disclosures in Austria.

By Roman Perner, Partner, and Marco Thorbauer, Counsel, Schoenherr

This article was written before the advent of the war in Ukraine and was originally published in Issue 9.2 of the CEE Legal Matters Magazine on March 1, 2022. More current articles on developments in Ukraine can be found in our #StandWithUkraine section. If you would like to receive a hard copy of the magazine, you can subscribe here.

The pioneering Austrian legislator is breaking new ground in the area of crypto taxation. Income from cryptocurrencies will no longer be taxed progressively, at up to 55% for individuals, but at a flat rate of 27.5% withholding tax. With these rules, the Austrian legislator has brought clarity to the taxation of crypto assets for the first time and has responded to the increased practical relevance of cryptocurrencies and the need to tax them in line with securities. The previous taxation of crypto assets was mainly based on non-binding information from the homepage of the Austrian Ministry of Finance.

How Crypto Assets Used to Be Taxed

Income from the sale of cryptocurrencies acquired prior to March 1, 2021, is subject to a one-year speculation period. It is therefore tax-exempt if the cryptocurrencies are sold after the expiry of this period. If, on the other hand, the cryptocurrencies are sold prior to the expiry of the speculation period, the income thus generated is subject to a progressive income tax of up to 55% for individuals or 25% for corporations.

Transitional Rules on Crypto Asset Taxation

Cryptocurrencies acquired after February 28, 2021, but sold by February 28, 2022 (inclusive), are still subject to the above-mentioned provisions. Crypto gains deriving from transactions before December 31, 2022, have to be declared in an income tax statement, while from January 1, 2023, crypto gains will be taxed via a withholding tax – if the crypto trading provider has an adequate Austrian nexus (e.g., through a registered office).

The New Way Crypto Assets Are Taxed

Income from cryptocurrencies can be either (1) ongoing income or (2) income from realized appreciation (e.g., sale).

As of March 1, 2022, gains from the sale of cryptocurrencies are subject to the special income tax rate of 27.5% for individuals or 25% for corporations. The prerequisite for this flat tax rate is the existence of a public offering of these cryptocurrencies – as swaps between cryptocurrencies do not constitute a taxable event. In such cases, the acquisition costs are continued by the swap, and the taxation of the hidden reserves is delayed until actual disposal takes place.

If the cryptocurrency services only consist of the use of existing cryptocurrencies (staking), or cryptocurrencies are transferred without consideration (airdrops), or for only insignificant other services (bounties), the acquired cryptocurrencies do not constitute ongoing income. The profits thus generated are not taxed until they are finally realized.

Furthermore, as of March 1, 2022, it is also possible to offset losses with other income from capital assets that are subject to the special tax rate of 27.5%. These are, for example, gains or losses from the sale of securities or bonds, interest from bonds, dividends, etc. The loss compensation is to be exercised within the annual tax return.

The classification of cryptocurrencies as income from capital assets also means that the provisions on exit taxation will apply. If Austria’s right to tax these cryptocurrencies is restricted during a departure, the hidden reserves accrued until the departure must be taxed in Austria. In the case of a physical departure of individuals to EU/EEA states, taxation may be deferred (but not entirely avoided) upon application.

It is essential to document crypto holdings in the tax treatment of cryptocurrencies, especially as there are economic consequences for failing to do so. The person required to deduct must assume that the acquisition costs amount to half the fair market value – if the acquisition date is not known or documented. The special tax rate of 27.5% is applied to these fictitious acquisition costs, which corresponds to an effective taxation of 13.75%.

Conclusion

The new rules on crypto taxation at least guarantee legal security in connection with the taxation of cryptocurrencies in Austria. In any case, Austria is a trailblazer internationally in this regard since, to be able to assess taxable income, Austrian crypto platforms will be required to withhold and pay withholding tax for the respective taxpayers. This exchange of data with the Austrian tax authorities may also lead to a new wave of voluntary self-disclosures in Austria.

By Roman Perner, Partner, and Marco Thorbauer, Counsel, Schoenherr

This article was written before the advent of the war in Ukraine and was originally published in Issue 9.2 of the CEE Legal Matters Magazine on March 1, 2022. More current articles on developments in Ukraine can be found in our #StandWithUkraine section. If you would like to receive a hard copy of the magazine, you can subscribe here.

Schoenherr, working with Hogan Lovells in Germany, has advised S&T on a voluntary partial public takeover offer by Grosso Tec. EY Law advised Grosso Tec.

“On March 21, 2021, the bidder Grosso Tec published a voluntary public partial takeover offer to the shareholders of S&T to acquire up to 5.5 million bearer shares at a price of EUR 15.30 (cum dividend) in cash per S&T share, which could be accepted until April 5, 2022,” Schoenherr informed. “The acquisition of the tendered shares by Grosso Tec was settled on April 13, 2022. As the partial offer was not subject to the application of the Austrian Takeover Act or the German Securities Acquisition and Takeover Act, the Executive Board of S&T published a voluntary statement regarding the partial takeover offer on March 24, 2022.”

S&T is an Austrian technology group and hardware and software products provider listed on the Frankfurt Stock Exchange. The group is present in 32 countries with over 6,000 employees.

Grosso Tec is a German company investing in European tech companies in all stages of their lifecycle.

The Schoenherr team included Partner Christoph Moser, Counsel Sascha Schulz, Associate Angelika Fischer, and Paralegal Clemens Stockhammer.

The EY Law team consisted of Partner Mario Gall, Senior Associate Georg Harer, Attorney-at-Law Zurab Simonishvili, and Associates Alexander Glaser and Christina Tober.

The Hogan Lovells team included Frankfurt-based Partner Michael Schlitt and Associate Leon Lindermann and Munich-based Partner Lutz Angerer and Counsel Thomas Weber.

Baker McKenzie has advised Datwyler on its acquisition of the QSR Group from Q Holding and 3i. Kirkland & Ellis reportedly advised the sellers.

Closing is expected in the second quarter of 2022, pending regulatory approval.

Datwyler is a Switzerland-headquartered elastomer components provider, with 20 companies and sales in over 100 countries. The company has been listed on the Swiss Exchange since 1986.

QSR is a US company developing and producing seals and components for electrical connectors for safeguarding connectivity in harsh environments. The company has five plants and supporting operations in the US, Mexico, and China.

“With this strategically important acquisition, we will become the leading global supplier of system-critical sealing solutions for electrical connectors for a diverse range of industries, which will open up new exciting niche markets for us,” Datwyler CEO Dirk Lambrecht commented. “QSR is an ideal fit with Datwyler in terms of strategy, core competencies, and culture and will further accelerate our profitable growth. With our significantly strengthened market positions in North America and Asia, we will be able to reduce our dependency on the European market.”

The Baker McKenzie team was led by Partners Alexander Fischer and Alexander Blaeser and Counsel Matthias Trautmann and included Austria-based Counsel Anita Lukaschek; Switzerland-based Partner Boris Wenger, Associates Nadine Bosshard, Zarina Fuglister, Eva Kriechbaumer, Sandra Marmy-Brandli, Meera Rolaz, and Vinzenz Sutter, and Paralegal Eric Schreiner; UK-based Partner Phelim O’Doherty and Associate Elliot Ryan; Germany-based Partner Nicolas Kredel and Associate Florian Kotman; China-based Partners Howard Wu, Alexander Gong, Grace Tso, and Zheng Zhou, Senior Counsels Frank Pan and Laura Liu, and Associate Di Wu; US-based Partners Michael Fieweger, Thomas Hughes, Kimberly Franko, Alison Stafford Powell, Geoff Martin, John Fedele, Christopher Guldberg, Patricia McDonald, Douglas Sanders, Brian Zurawski, Elizabeth Ebersole, William Rowe, and Adam Aft and Associates Meghan Hamilton, Brian Lee, Matthew McCarthy, Taylor Parker, Rachel Gray, Tariq Akeel, Stephanie Onyekwere, Jonathan Susko, William Shields, Danielle Lawrence, Sarah Swain, and Daniel Graulich; and Latin America-based Partners Luis Amado-Cordova, Carlos Vela-Trevino, and Lorenzo Ruiz de Velasco-Beam and Associates Alejandra Muriel-Vizcaino, Daniel Villanueva-Plasencia, Herman Gutierrez-Penuelas, and Eugenia Barrutia.

Schoenherr has advised the Vermehrt Group on its sale of the former Tlapa department store to LLB Semper Real Estate.

Founded in 2014, Vermehrt GmbH is a real estate developer, part of the Vermehrt AG group, based in Vienna. 

According to Schoenherr, “the famous Tlapa was a widely known clothing department store in Vienna’s 10th district. Vermehrt is remodeling the structure into a mixed-use office and commercial building that will contain retail and office space as well as serviced apartments and underground parking.”

Schoenherr’s team included Partner Arabella Eichinger and Associate Tabea Moser.

Schoenherr did not reply to our inquiry on the matter.

With the effects of the war in Ukraine remaining difficult to predict, there is ample work generated by the sanctions alone, according to Schoenherr Partner Martin Ebner.

“The mid-to-long-term effects of the war in Ukraine on the market remain yet to be seen. What is certain, though, is that in the short term, aside from pro bono work, the sanctions have certainly generated a lot of immediate need for legal work,” Ebner begins. He anticipates that, in addition to regulatory advice that will be sorely needed, especially with the “potential supply chain issues, energy supply disruptions, and sky-rocketing energy prices,” financial restructurings will likely occur.

“So far, the economy has been handling things reasonably well, but I think that the second quarter ought to be telling of what could happen by the end of the year,” Ebner continues. “The expectation is that corporations will have to approach lenders more and that financial restructurings will be on an uptick. The Russian aggression in Ukraine and, also, the recent spike in restrictions in China, following the enforcement of its zero-COVID policies, are likely to disrupt businesses more as the year progresses,” he explains.

Still, Ebner reports that “large energy companies that have secured long term contracts have been doing well. Real estate is booming even now, and there is ample banking & finance work and M&A activity in the market,” he reports. In particular, Ebner points to financial institutions (distressed) M&A, including around Austrian-based Sberbank Europe and some others, which “could generate a lot of associated legal work.”

Speaking about legislative updates, Ebner highlights a few items of note. “After the COVID-19 support scheme comes to an end, we will see just how the economy manages to get along without it. This also means changes to the way of doing corporate work – for example, holding virtual shareholder meetings – it will be interesting to see how this moves along.”

Furthermore, Ebner reports that the Ministry of the Economy has been “pretty active” when it comes to FDI controls. “There have been some deals which were blocked, so investors should be on the lookout.” Ebner also believes that “regulation will continue to be a major driver for businesses, especially so in terms of the energy, financial services, healthcare, medical, and tech sectors.” Finally, he reports that there are “ongoing discussions about certain corporate law nuances, such as new start-up organizational forms, although nothing has materialized yet.”

In a recently published decision (OGH 4 Ob 145/21h) the Austrian Supreme Court ruled that an auditor who neglects due diligence and therefore issues an incorrect audit opinion shall be liable for damages to a third party who relies on the correctness of such an audit opinion and suffers damages resulting from such reliance.

In the case at hand the defendant served as an auditor for a bank for the financial years 1999 to 2005 and issued unqualified audit opinions for each of the annual financial statements during that period. The claimant was seeking EUR 2 million in (partial) damages, essentially claiming that he entrusted the bank a term deposit of EUR 13 million in August 2019. Later on insolvency proceedings were opened against the bank and the claimant did therefore not get back the deposit. Had the plaintiff known that the annual financial statements had been massively falsified at least since 1999, he would not have invested money in 2019. Applying a diligent audit the auditor should have been able to recognize the balance sheet malversations and should have issued negative audit opinions. A negative audit opinion would have resulted in the authorities prohibiting the bank from doing any further business, insolvency proceedings would have been opened against the bank.

The Supreme Court at first held that the claim was not time-barred. The limitation period for damages merely negligently caused by an auditor commences upon occurrence of the primary damage. For claims submitted by third parties this is the disposition of assets caused by the audit opinion. A claim for damages asserted by way of action in the year 2020 is based on the loss of an investment made in 2019. Accordingly, the statute of limitations could commence to expire at the earliest with such disposition of assets in 2019, irrespective of the time at which the audit opinion had been issued.

Furthermore, the Supreme Court pointed out that the auditor’s agreement with the bank is a contract with a protective effect in favour of third parties since such an audit has to comply with mandatory legal requirements. Due to these requirements the information of third parties that is intended with the publication of the audit opinion becomes part of the agreement. This protective effect covers (potential) creditors of the audited bank who are to be addressed by the publication of the auditor’s report and who then may assume in their economic dispositions that the accounting, annual financial statements and management report of their (potential) debtor comply with statutory provisions in the auditor’s professional opinion. The group of persons addressed by such an audit opinion and the associated potential liability of the auditor are thus limited.

An auditor neglecting to exercise due care and therefore issuing an incorrect audit opinion becomes liable to third parties who rely on the steadiness of such an audit opinion and suffer damages resulting from such reliance. Such a reliance may not only be created by knowing the particular audit opinion, but is also conceivable in the case of advice if the advice, which had a positive effect on the investment decision, was influenced by the issued audit opinion. However, this presupposes that the advisor was aware of the audit opinions or otherwise learned of their issuance. The claimant may also rely on such indirect knowledge of an audit opinion on which he relied in his disposition.

By Bernd Taucher, Partner, PONTES 

Brandl Talos has advised Austrian fintech start-up Coinpanion on a EUR 3.7 million expansion of its 2021 seed round.

According to Brandl Talos, “following the previously completed seed financing round in August 2021, Coinpanion secured additional funds of EUR 3.7 million from, inter alia, Wicklow Capital, Bernhard Niesner (Busuu), Johannes Braith (Storebox), Michael Hurnaus, Wolfgang Reisinger (Tractive), and Johann Hansmann, bringing the total volume of the seed financing round to EUR 5.5 million.”

Coinpanion first obtained its pre-seed financing back in 2020 (as reported by CEE Legal Matters on September 21, 2020).

Coinpanion enables its users to securely invest in cryptocurrencies. According to Brandl Talos, “Coinpanion intends to use the capital raised to accelerate their market expansion and expand Coinpanion’s offering to include new products.”

The Brandl Talos team included Partner Roman Rericha and Attorney Adrian Zuschmann.

Brandl Talos did not respond to our inquiry on the matter.

Cerha Hempel has advised Caljan on the acquisition of all the shares in PHS Logistiktechnik GmbH from Austrian Post and two founders. Reidlinger Schatzmann reportedly advised the sellers on the deal.

Caljan is a wholly-owned subsidiary of Investment AB Latour.

According to Cerha Hempel, “PHS has developed the Rapid Unloader system, an automatic parcel unloader used by parcel carriers. The Rapid Unloader system reduces unloading times, increases throughput, and improves the working environment in logistics centers. The company, founded in 2017, is headquartered in Graz, Austria.”

Since 1963, Caljan has specialized in loose cargo handling for parcel carriers, retailers, and manufacturers.

Cerha Hempel’s team included Partner Volker Glas, Attorneys Christian Aichinger and Christopher Peitsch, and Associate Alina Kia.