1. In your jurisdiction, are taxpayers obliged to maintain transfer pricing documentation? Does this obligation apply to all taxpayers, or only to certain categories (e.g. taxpayers with turnover or assets exceeding a particular threshold)?
Taxpayers are obliged to maintain transfer pricing documentation (cf. Chapter 3 of the Transfer Pricing Guidelines). This obligation applies to all taxpayers without exemption.
2. What is the content of the documentation that must be prepared?
a) Which transactions must be documented (all transactions with associated enterprises, or only those which exceed a particular threshold)?
All transactions with associated enterprises must be documented.
b) What is the definition of “associated enterprises” for the purposes of this requirement?
The definition of “associated enterprises” complies with Art. 9(1) of the OECD Model Convention: (i) an enterprise which participates directly or indirectly in the management, control or capital of another enterprise or (ii) where the same persons participate directly or indirectly in the management, control or capital of two enterprises.
c) For EU countries, is the content of the documentation similar to that described in the EU Code of Conduct on transfer pricing documentation for associated enterprises (“EU TPD”)? If not, are taxpayers entitled to choose between the local requirements and the EU TPD?
Documentation in line with the EUTPD will be accepted as core documentation (cf. Transfer Pricing Guidelines Rz 309). The Austrian tax authority may however request further information and documents during a tax audit (cf. Transfer Pricing Guidelines Rz 309 referring to sec. 3.18 of the EUTPD).
d) Do taxpayers which are not established in your jurisdiction need to undertake to provide any specific information upon request? Can your tax authorities require the taxpayer in your jurisdiction to provide information which is located in another state?
Such a commitment is not requested. In general, the tax authorities may request information from any person even if it does not concern its own tax matters (sec. 143(1) of the Austrian Federal Fiscal Code). Further, according to prevailing case law, there is an increased obligation to cooperate with the tax authorities in cases with international elements, such as transfer pricing issues. In practice therefore, the tax authorities usually request information – including information regarding foreign group companies – from the Austrian taxpayer.
e) If comparable studies are to be provided, do the tax authorities generally accept regional benchmark studies (e.g. pan-European benchmark studies)?
There is no restriction in this respect, i.e. regional benchmark studies are accepted.
f) What language(s) are to be used by taxpayers in submitting the transfer pricing documentation?
In practice, transfer pricing documentation in the German or English language is accepted.
3. What is the deadline or timescale for providing transfer pricing documentation to the tax authorities (is it to be provided for example upon filing of the tax returns, at the beginning of a tax audit, or on the specific request of the tax authorities)?
The transfer pricing documentation must be provided to the tax authority at the beginning of a tax audit or upon specific request from the tax authorities.
4. In the event that the documentation is not provided within the applicable timescale, or is incomplete, do documentation-related penalties apply in your jurisdiction? If so, please detail the penalties and the circumstances in which they do and do not apply.
There are no documentation-related penalties.
5. Does the absence or incompleteness of documentation reverse the burden of the proof as regards the arm’s length character of the transactions?
6. In the event that the tax authorities (i) impose documentation-related penalties and (ii) make a transfer pricing reassessment, does the imposition of documentation-related penalties prevent the taxpayer from initiating any mutual agreement procedure which may be contained in an applicable tax treaty (or, for EU countries, the procedure contained in the EU Arbitration Convention) with a view to eliminating any double taxation resulting from the transfer pricing reassessment?
Not applicable (documentation-related penalties do not apply).