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CHAIRMAN’S INSIGHTS

Think global, act local

From 1/03/2014, the disallowance for the part of wages exceeding €500,000 in Austria has come into force. This includes payments for work and services performed if these exceed €500,000 per person per financial year. With this prohibition the legislator wished to counteract the increasing growth in the wage differential gap in the payment of income.

This regulation was considered questionable in terms of constitutional law and was the subject of complaints by the affected companies. As individual applications had initially been rejected for formal reasons, the Austrian Constitutional Court (VfGH) has now ruled on this subject after the Austrian Federal Fiscal Court (BFG) had requested an examination of the law. The result is that the objections to the contested regulation of the law on income and/or corporation tax are unfounded.

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