In order to circumvent the capital raising requirements of the Austrian Limited liability company (GmbH), it was common practice for Austrian businesses to establish a Limited Liability Company in the UK. Once the LLC was established for a few Euros, a branch office was set up in Austria. The main business then took place through the branch office. With Brexit, this option has now been put to a stop. In addition, the Austrian Supreme Court (OGH) recently recognized that existing LLCs Austrian branch offices are to be regarded as companies under civil law (Gesellschaften bürgerlichen Rechts). Accordingly, the shareholders are now personally liable for the liabilities of those branch offices. (9Ob74/21d)
An attorney-at-law applied for an VAT exemption for his activity almost exclusively as a legal guardian. In line with the case law of the European Court of Justice, the Supreme Administrative Court stated that the legal guardian activity must be “closely connected with social welfare and social security” and “provided by a body governed by public law or a body recognized by the Member State as having a social character”. Some of these criteria were met. The lower court did not make sufficient findings. Therefore, the Supreme Administrative Court could not assess whether other taxpayers had previously been recognized as institutions of a social character. In order to uphold the principle of fiscal neutrality, the Supreme Administrative Court remanded the contested decision (Ra 2019/13/0025).
In a recent decision, the Austrian Supreme Court dealt with contractual clauses in building savings contracts. As a rule, these contracts were concluded for a term of six years. An account management fee was charged for each calendar year started. If the agreed term was not adhered to or the savings payment was not made in full, an administration fee of 0.5 percent of the contract amount was charged and interest was calculated retroactively to 0.5 percent. However, these clauses are inadmissible. (8 Ob 125/21x)
When cash value life insurance policies are taken out, the insurer has a duty to provide information. In the event of violations, policyholders could still demand a refund years later – usually when the insurance performed poorly. To stop this practice, the law was amended in 2018. Under the new rule, one only got the surrender value after five years from conclusion of the contract. The Supreme Court recently recognized the illegality of the new regulation. This is because the same legal consequences are provided for a withdrawal after five years as for a termination (sec 176 para 1 VersVG). Accordingly, the previous case law remains applicable. The life insurance policy must be rescinded under the law on enrichment. (7Ob185/21p)
Swift (Society for Worldwide Interbank Financial Telecommunication) is a Belgium-based limited liability cooperative. It creates common processes and standards for participating banks worldwide to process payments securely and quickly. As a result of the Russian attack on Ukraine, the Council of the European Union excluded, by regulation, some Russian banks from the SWIFT banking system. Therefore, payments to and from Russia will be significantly restricted. There are no international alternatives, but in recent years Russia has developed its own payment systems, e.g., SPFS and Mir. (ABl 2022 L 063)