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146 T. Antenreiter, National Report Austria Notarius International 3-4/2002 7.2.3 Governing law in relation to formal validity In so far as there are no special connecting factor provisions as regards form, 111 the form of legal acts is governed by the materially applicable law (lex causae) or by the law of the country in which the legal act is performed (lex loci actus). If the law applicable as regards the form of the legal act provides for compliance with a stricter form, in particular the participation of a notary as public authenticator, then this person can also be replaced by the involvement of a public authenticator of a foreign country, if their authentication procedure is equivalent to that demanded by the lex causae 112 . Thus the notarial act required by Austrian law for the transfer of shares in a private limited company can also, for example, be drawn up by a German notary because his activity is categorised as equivalent to that of an Austrian notary. 7.3. Law of property The acquisition and loss of real rights in corporeal items, including possession, are assessed in accordance with the law of the country in which the items are situated (lex rei sitae) 113 . 7.4. Family law 7.4.1. Personal Effects of Marriage The personal effects of marriage depend in accordance with Art. 18 of the Private International Law Statute, subject to the applicability of the doctrine of renvoi, in simple terms, first of all on the joint personal governing law of the spouses (failing which then on the last joint personal governing law of the spouses), or otherwise on the basis of the law of the country of joint habitual residence (failing which on the basis of the last joint residence retained by one of the spouses). Chronologically decisive here is the relevant factual date, so that under Austrian law the governing law is mutable, in that the connecting factor varies depending on the factual situation. 7.4.2. Divorce and Matrimonial Property The law applicable to matrimonial property, however, is determined in accordance with the governing law as regards the effects of marriage at the time the marriage was entered into and is thus a fixed governing law. With regard to matrimonial property law, in addition an express choice of law by the spouses is permissible 114 . The prerequisites for and effects of a divorce depend on the governing law as regards the general effects of marriage at the time of the of divorce 115 . There are separate rules on the law governing the family name of the divorced spouses (art. 13 IPRG) and on the law governing the prerequisites of remarriage (art. 17 IPRG). The law applicable to matrimonial property (art. 19) governs also the consequences of divorce on matrimonial property. This includes the separation of the spouses savings (art. 81 öEhegesetz = Austrian matrimonial law) whereas the assignment of the spouses residential home, of their furniture and of other property used for the spouses’ daily life are governed by art. 20 IPRG 116 . 7.5 Law of succession 7.5.1. Substantive governing law Legal succession in the event of death is determined in accordance with the personal governing law of the deceased at the time of death 117 . A choice of law in not permitted under Austrian law for any inheritance matters. 7.5.2. Governing law in relation to formal validity The form and validity of testamentary dispositions falls to be ascertained in accordance with Art. 30 IPRG and in accordance with the Hague Convention on the Form of Wills, which also applies in Austria, so that testamentary instructions effectively drawn up in accordance with the proper legal form at the place where the testamentary writing is made will be recognised in Austria. 7.5.3. Probate proceedings In respect of Austrian citizens, probate proceedings are carried out in relation to land situated in Austria and all their world-wide movable assets; this occurs irrespective of whether administration proceedings are also taking place in another country (principle of Nachlassspaltung – application of more than one legal system to an estate) 118 . In the case of foreign nationals, probate proceedings are in all cases carried out in respect of land situated in Austria 119 , and under certain circumstances also in respect of movable assets (in particular where the deceased was last domiciled in Austria) 120 . 7.6. Company law The personal governing law of a juristic or artificial person is the law of the country in which the actual place where the main administration of the legal enti- 111 There are special formal requirements, for example, in relation to the form of the marriage ceremony (Art. 16 Private International Law Statute), for contractual obligations falling under the 1980 European Convention on the Law Applicable to Contractual Obligations (Art. 9, which provides unitary assessment of the formal requirements for the whole contract in contrast to the Austrian Private International Law Statute where the governing law is individually established for the separate legal acts) and for the form of wills (Hague Convention on the Form of Wills). 112 Consistent practice of the courts 113 Art. 31 IPRG (Private International Law Statute) 114 Art. 19 IPRG (Private International Law Statute) 115 Art. 20 IPRG (Private International Law Statute) 116 There are different opinions in jurisdiction and jurisprudence on how exactly to define the limits of application of art. 19 IPRG (law applicable to matrimonial property) on the one hand and art. 20 IPRG (law applicable to divorce and to the consequences of divorce) on the other hand, in particular concerning the application of art. 81 öEheG. See Schwimann, Internationales Privatrecht, p. 154, 155. 117 Art. 28 IPRG (Private International Law Statute) 118 Art. 21 General Rules on Civil Procedure in Non-contentious Matters (Außerstreitgesetz) 119 Art. 22 General Rules on Civil Procedure in Non-contentious Matters 120 Art. 23 to 25 General Rules on Civil Procedure in Non-contentious Matters
Notarius International 3-4/2002 T. Antenreiter, National Report Austria 147 ty is carried out 121 . Under Austrian law the domicile theory (Sitztheorie) thus applies in principle (and not the incorporation doctrine – Gründungstheorie). But nevertheless the question arises as in other EU states as to the compatibility of the domicile theory with European law, in particular freedom of establishment (Niederlassungsfreiheit). That is why the Supreme Court of Austria has given up the domicile theory regarding companies incorporated in other EU states 122 . 7.7. Apostille Austria is a signatory to the Hague Convention on Abolishing the Requirement of Legalisation for Foreign Public Documents of 5.10.1961, and for this reason an Apostille is sufficient for the recognition of notarial documents from other contracting states and no additional certification is stipulated. 8. Tax law 8.1. Property transfer tax Property transfer tax (Grunderwerbssteuer) is levied on business transactions involving immovable property (in particular purchase and exchange), but not, however on acquisition by inheritance or on gifts. The property transfer tax amounts in principle to 3.5% of the purchase price (the consideration), but in the area of close family relationships it amounts to only 2% 123 . (The statutory registration fee for the Land Register amounts to 1%.) There are two possible ways of computing the tax: either this is done by way of electronic self-assessment by notaries (and other places set up for this purpose) and then paid to the Tax Office in the name of the contracting parties or the taxable transaction is (as a rule likewise electronically) notified to the Tax Office, which calculates the tax and sends a direct order to the parties. The declaration of self-assessment of the tax or the fiscal clearance certificate issued by the Tax Office in the second case is a necessary precondition for registration in the Land Register. In the notary’s practice today the overwhelming majority of all business transactions are already self-assessed electronically over a separate Internet interface with the Tax Office (FINANZ online) and the tax is forwarded to the Tax Office in the name of the parties. In this situation the notary does not incur any liability for the accuracy of the contents of the tax computation, but does have strict liability for the timely paying of all selfassessed taxes and fees 124 . 8.2. Inheritance tax Acquisition by inheritance and gratuitous donations inter vivos are subject to taxation under the Inheritance Tax Law (Erbschafts- und Schenkungssteuergesetz). The calculation of the tax is structured so as to be doubly progressive in accordance in the first place with the closeness of the familial relationship (tax classes I to V) and in accordance with the value of the donation 125 . For example, the tax in tax class I (spouse and children) amounts in the case of a donation of up to 7.300,– € to 2% and of donations of over 4.380.000,– € to 15 %, and in tax class V (no relationship) in the case of a donation of up to 7.300,– € to 14% and of donations of over 4.380.000,– € to 60 %. In the case of acquisition of real property there is provision in addition for a property transfer tax equivalent amounting to 3.5% (2% in the case of close relatives) 126 . For persons in tax classes I and II there is a tax-free sum amounting to 2.200,– € for tax classes III and IV of 440,– € and for tax class V of 110,– €. Acquisitions by inheritance of assets subject to withholding tax as the final tax (endbesteuerte Vermögen) are totally exempt from tax; this includes, in particular, credit balances at banks subject to withholding tax (accounts, savings deposits, security deposits etc). Up to the end of 2003 gifts inter vivos of cash deposited with an Austrian bank are also totally exempt from tax in tax classes I to IV and in tax class V there is a tax free sum of 100,000,– €. In Austria a tax liability arises if the deceased at the time of death was an Austrian national or resident (Inländer) or, in the case of gifts, the transferee is an Austrian national or resident. Those qualifying as “Inländer” include Austrian citizens, foreigners domiciled or having their habitual residence in Austria and legal entities with their registered offices in Austria 127 . Along with the taxpayer any person who has safe custody of the deceased’s estate or the gifted item or any part thereof incurs personal liability for the payment of the inheritance tax 128 if appropriate security in respect of the tax was not provided. For this reason it is usual for Austrian notaries, who as Court Commissioners frequently hold assets in safe custody for the estate or the heirs, as a rule only to hand over funds to foreign beneficiaries after full payment of any tax due. Austria has concluded are several bilateral treaties (also) concerning double taxation of the estate, such as with Liechtenstein 129 , Switzerland 130 , France 131 , Sweden 132 , Hungary 133 , the U.S.A. 134 and with Germany 135 . These treaties do not regulate what is taxable, but limit the taxation by either state. Thus, these treaties divide the possible taxation among the states concerned which then apply their domestic tax law to regulate the tax applicable to the specific case. 121 Art. 10 IPRG (Private International Law Statute) 122 See in this regard: Hertel, National Report Germany, Notarius International , p. 20, 30 (no. 7.5 - Centros decision of the European Court) 123 Art. 7 Property Transfer Tax Law 124 Arts. 10 to 16 Property Transfer Tax Law 125 Arts. 7 and 8 Inheritance Tax Law 126 Art. 8 para. 4 Inheritance Tax Law 127 Art. 6 Inheritance Tax Law 128 Art. 13 para. 4 Inheritance Tax Law 129 BGBl 1956/214 130 BGBl 1975/63 131 BGBl 1994/614 132 BGBl 1963/212 133 BGBl 1976/51 134 BGBl 1983/269 135 BGBl 1955/220
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