Austrian-Tax-News-2018According to the WiEReG, the Austrian Beneficial Owners Register Act, data about the beneficial owners of all Austrian legal entities have to be transmitted electronically via the Austrian Government’s Business Service Portal. Newly established companies have to fulfil this obligation within four weeks of incorporation.

As we have written in an earlier article, since 15 January 2018, all Austrian legal entities have to report their beneficial owners to a central register according to the Austrian Beneficial Owners Register Act (Wirtschaftliche Eigentümer Registergesetz, WiEReG). The purpose of the Beneficial Owners Register Act is to prevent money laundering and terrorist financing in accordance with EU Directive 2015/849.

Who is subject to the Austrian Beneficial Owners Register Act?

The Beneficial Owners Register Act addresses all relevant company structures in Austria, e.g. unlimited liability partnerships (OG), limited liability partnerships (KG), limited liability companies (GmbH), public limited companies (AG), Societas Europaea (SE), (European) cooperatives, insurance companies, private foundations, as well as trusts and trust-like agreements that are administered in Austria.

The addressed entities have to verify their beneficial owners and their identity. In general, all natural persons who own or control a legal entity are considered to be its beneficial owners and must be registered. With regard to companies, the law provides for three different approaches:

  • A natural person directly holds more than 25% of the shares or has a participating interest of more than 25%.
  • A natural person exercises control over the management of the company or partnership, meaning that more than 25% of the shares in an Austrian company are held by another legal entity that is controlled directly or indirectly by a natural person; control in this respect is indicated by directly or indirectly holding more than 50% of shares.
  • A natural person has sufficient voting rights in the company or partnership, directly or indirectly.
Exemptions and special provisions

In the case that no beneficial owner according to the above-mentioned parameters can be identified, the top-level management of the company shall be seen as the beneficial owner. There are a few exemptions from the reporting obligation. For example, limited liability companies are exempted from the obligation to transfer information to the registry if all shareholders are natural persons.

Specific provisions exist for foundations (e.g. private foundations according to the Austrian Private Foundations Act or foundations and funds according to the Federal Foundation and Fund Act 2015) and trusts (or agreements similar to a trust) that are domiciled in Austria or are managed from Austria. About the details of these special provisions you can read in our earlier article.

Which data have to be reported and when?

According to the Beneficial Owners Register Act, in principle, for every beneficial owner the following data have to be reported: first name and surname; place of residence (where there is no place of residence in Austria, the number and nature of an official photo identification); date and place of birth; nationality and nature and scope of the economic interest. The required data concerning the beneficial owners have to be transmitted electronically via the Austrian Government’s Business Service Portal. It must be mentioned that also legal advisers (tax consultant, lawyer and notary) are entitled to undertake the notification. The initial registration in Austria was due no later than 16 August 2018. Newly established companies are obliged to register their ultimate beneficial owners within four weeks of incorporation. Moreover, if changes occur regarding registered data, entities are obliged to amend their registration accordingly within four weeks of the first notice. Furthermore, a verification of the data shall be undertaken once a year. The documentation and information required for these obligations must be stored for five years.

Penalties and access

In case of non-compliance with registration duties the Austrian tax authorities automatically impose administrative penalties of up to  EUR 5,000 by default. Strong reporting violations carry a financial penalty of up to EUR 200,000 in case of intentional infringement and up to EUR 100,000 in case of gross negligence. These penalties primarily address entity representatives (e.g. the managing director). However, legal entities themselves can also be punished.

According to the Beneficial Owners Register Act, the Federal Ministry of Finance acts as competent authority for the register. It is generally not open to the public (such as the Commercial Register), but it is accessible for several groups of persons and certain authorities. This includes all credit institutions, lawyers, notaries, auditors and tax advisers. Moreover, estate agents, business consultants and insurance intermediaries as necessary also have access in order to comply with their due diligence obligations as regards combatting money laundering and terrorist financing. Please note that an unauthorised access is subject to a fine of up to  EUR 10,000. Finally, tax inspectors, prosecutors of tax offences and supervisory authorities also have the right to inspect the register when carrying out their lawful duties.

If you would like to know more about the WiEReG, the Beneficial Owners Register Act or other taxation issues in Austria, please visit the homepage of WTS Austria!

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