International treaty

UK-Austria Double Taxation Convention — Competent Authority Agreement signed in September 2020 — in force

Updated 30 June 2021

Competent authority agreement

Pursuant to Article 23(3) of the Convention between the Republic of Austria and the United Kingdom of Great Britain and Northern Ireland for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital gains, signed on 23 October 2018, (hereinafter ‘the Convention’),

Intending to continue to apply similar administrative rules for the exemption from Austrian dividend withholding tax as under the Parent Subsidiary Directive (Council Directive 2011/96/EU of 30 November 2011) even after the end of the transition period (provided for at Article 126 of the Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community (2019/C 384 I/01)),

the competent authorities of the United Kingdom and Austria have reached the following mutual agreement (‘this Agreement’) regarding the procedure for claiming relief at source of Austrian dividend withholding tax in accordance with the Convention:

1. 1. The following procedure shall be applicable for claiming relief at source from Austrian dividend withholding tax according to Article 10 (2) b) (i) of the Convention by companies resident in the United Kingdom according to Article 4 of the Convention.
2. 2. A company resident in Austria and distributing dividends subject to Austrian withholding tax according to Austrian domestic law (Sec 98 (1) 5a) ITA in connection with Sec 93 (2) 1) ITA) but relieved from this withholding tax under Article 10 (2) b) (i) of the Convention to a company resident in the United Kingdom has to follow the specific procedures provided in Austrian domestic law and administrative guidance for claiming relief at source. For this purpose, the Austrian form provided for the relief at source procedure for legal entities must be used (see form ZS-QU 2 in Annex I). Besides general information about the recipient of the income and the income received, the form includes:
   1. a) a declaration by the recipient of the income that confirms that the recipient carries out business activities going beyond the scope of enjoyment of capital assets, that the recipient employs its own employees and that the recipient has its own business premises to carry out business activities; and
   2. b) confirmation that the recipient of the income is resident in the United Kingdom. For this purpose, Her Majesty’s Revenue and Customs will complete section IV of form ZS-QU 2.
3. 3. If the recipient does not meet all criteria listed under paragraph 2, the company distributing the dividend must deduct dividend withholding tax and pay this amount to the responsible tax office. Nevertheless, if the recipient is entitled to the benefits of the Convention and may therefore prove that all requirements for a treaty benefit are fulfilled, a refund of the withholding tax may be claimed at the responsible tax office.
4. 4. Notwithstanding paragraph 3 of this Agreement, the relief at source procedure can be applied if the recipient of the dividend, not itself meeting all criteria listed under sub-paragraph a) of paragraph 2 of this Agreement, is directly and wholly owned by a company (other than a partnership) resident in the United Kingdom which meets all criteria listed in sub-paragraph a) of paragraph 2 and this is confirmed by Her Majesty’s Revenue and Customs. A draft wording of such confirmation is attached to this Agreement (Annex II). Further, certificates of residence of the recipient of the dividend and of its parent company are required, using the Austrian form provided for the relief at source procedure (form ZS-QU 2).
5. 5. This Agreement applies from the later of the dates of the signing of this Agreement by the competent authorities of the United Kingdom and Austria and remains applicable as long as the Convention is in force. If a competent authority wishes to terminate this Agreement, it may do so by providing written notice to the other competent authority. This Agreement will terminate one calendar month following receipt of that notification.

Agreed to by the undersigned competent authorities:

Date: For the UK Competent Authority: John Stokes Her Majesty’s Revenue & Customs.

Date: For the Austrian Competent Authority: Helmut Beitl Federal Ministry of Finance.

Annex I

Annex II

For the purpose of the relief at source from Austrian dividend withholding tax, it is hereby confirmed that

• [insert taxpayer’s name and legal form, address of the place of effective management, UK tax number or equivalent identification number] is directly and wholly owned by a company (other than a partnership) which is resident in the United Kingdom (‘UK parent company’); and

• the UK parent company carries out business activities going beyond the holding of capital assets, has at least one employee, has business premises at its disposal in the United Kingdom and carries out business activities at those premises.

[Official stamp and signature by the tax administration of the United Kingdom].