Kapitalertragsteuer und "Matching Credit"

Generally in Austria interest is subject to a withholding tax of only 25%, and is then later settled up. By applying double taxation treaties these advantages can be increased. In some cases double taxation treaties even provide for an imputation of foreign tax (matching credit), so that the Austrian tax burden is lowered once again. Such practices are a thorn in the flesh of tax authorities. For this reason these advantages have been abolished by a regulation which will go into effect on July 1, 1998. Roman Thunshirn describes the new legal basis.