VwGH: Good faith in the case of tax liability

Sept 8, 2021 Benn-Ibler Rechtsanwälte

In this case, the Administrative Court (Verwaltungsgerichtshof, VwGH) decided whether the principle of good faith should be applied in connection with a confirmation by the tax office (Finanzamt, FA) about the cessation of tax liability.

The appellant lived in Austria but earned income in Germany as a pilot for a German airline and was subject to limited taxation there. Since he was striving for unlimited tax liability in Germany, he sent the Austrian FA a printout he had filled out from the German tax authorities with a request for confirmation. In it, he stated that he had not received any income in Austria. The FA certified that it had no knowledge of any facts to the contrary. Consequently, the appellant requested to be treated as having unlimited tax liability in Germany.

In his income tax return, he listed the income taxable in Austria as zero. However, the FA assumed that the income was taxable in Austria.

In proceedings before the Federal Fiscal Court (Bundesfinanzgericht, BFG), the appellant stated that the FA had so far confirmed to him annually that he was not subject to tax in Austria. He had relied on the correctness of this confirmation and had therefore made appropriate arrangements which he would not have made if he had known that it was "incorrect". Therefore, the income tax assessment violated the principle of good faith.

The Administrative Court countered that the principle of good faith only has an impact if the law grants enforcement leeway. However, the origin, content and expiry of tax obligations are exclusively and clearly regulated by law.

The confirmation of the FA concerned a form of the German tax administration, with which the Austrian FA merely certified that at the time it was not aware of any circumstances contradicting the information provided by the appellant, according to the Administrative Court. No legal qualification of income could be derived from this. The responsibility for the correctness of the information would therefore rest with the appellant.

VwGH Ra 2021/15/0001 (10.05.2021)