VwGH: Tax liability and the foreseeability of duties to cooperate

Dec 8, 2021 Benn-Ibler Rechtsanwälte

It must be foreseeable for taxpayers whether and in what manner and to what extent they may be subject to a duty to cooperate in the procurement of supporting documents in tax proceedings conducted years later.

The appellant is the owner of a tax warehouse for mineral oils in an Austrian airport, from which fuel is delivered to air carriers. In her declaration under Section 23 of the Austrian Mineral Oil Tax Act (Mineralölsteuergesetz, MinStG), in 2010, she claimed exemption from mineral oil tax under Sec. 4 para 1 no 1 of the MinStG. In the course of an audit, the customs office requested the appellant to submit evidence of the legality of the tax exemption. The customs office demanded a valid "Air Operator Certificate" (AOC), "unaltered" invoices and extracts from the "Tech-Log" for each flight. The appellant only partially complied with this request.

The Federal Finance Court (Bundesfinanzgericht, BFG) only partially upheld the appeal filed by the appellant against the tax office's assessment and confirmed the assessment of the mineral oil tax including late payment surcharges. The BFG came to the conclusion that the appellant had not fulfilled her duty to cooperate. In addition, it could not be recognised from the documents submitted that they had been subject to an exemption under Sec. 4 para 1 no 1 of the MinStG.

The Administrative Court (Verwaltungsgerichtshof, VwGH) ruled on the appeal by overturning the disputed decision of the BFG on the grounds of illegality due to violation of procedural rules.

The VwGH overturned the disputed decision on the grounds that it must be foreseeable for the taxpayer which obligations to cooperate may still affect him years later. Considered ex ante, it must be possible and reasonable to foresee the cooperation in a submission procedure. Therefore, the appellant could not be charged with a violation of her duty to cooperate in the determination of the factual prerequisites for the tax exemption.

Ra 2021/16/0014-10 (24.06.2021)