法律研究

ZIAG also applicable to pending rent proceedings

On 01.01.2026, the Civil Law Indexation Adjustment Act (ZIAG) entered into force. By amending Section 6 para 2 no 4 of the Austrian Consumer Protection Act, the ZIAG clarified that value adjustment clauses in continuing obligations generally remain permissible. In its decision dated 10.03.2026 (1 Ob 87/25p), the Austrian Supreme Court addressed the question of how the ZIAG affects proceedings already pending before the courts.

In the specific case, former tenants sought repayment of rent from their landlord due to the alleged invalidity of a value adjustment clause. The Austrian Supreme Court dismissed the claim and clarified that the ZIAG also applies to proceedings already pending before the courts.

For practice, this means the following: Claims for repayment based on the previous legal situation regarding Section 6 para 2 no 4 of the Austrian Consumer Protection Act are now significantly more difficult to pursue. Landlords should actively invoke the amended legal situation in any pending proceedings.

Timing of application for a decision for granting citizenship to minors

An Italian woman, still a minor, whose mother was already an Austrian citizen, applied for Austrian citizenship. The applicable provision (Sec 12 para 1 no 3 StbG) requires, inter alia, that the applicant be a minor. During the application process, the applicant came of age. The application was then rejected. The Austrian Constitutional Court ruled that this violated the principle of equality. It must not depend on coincidences or manipulative circumstances whether an application is granted. Therefore, a legal claim must not be made dependent on how long an administrative procedure takes. (Austrian Constitutional Court of 01.07.2022 to case E3398/2021)

Rescission of a foreign currency loan

The borrower took out a foreign currency loan with the defendant bank in 2004. It was not until 2018 that he sued for cancellation and rescission. He based his claim, among other things, on the fact that the exchange rate had not been determined. The Supreme Court has now ruled that the loan agreement cannot be rescinded.. Anyone wishing to invoke the invalidity of an ongoing contract would have to inform his contractual partner of this in a timely manner. However, the borrower had received account statements and annual statements from the bank for 18 years and had not objected to them. (4Ob208/21y)

The End of the Austrian Limited

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)

Exemption from value added tax for the activity of a lawyer as a legal guardian

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).