Why the income tax assessment notice often falls short when determining maintenance.
The tax assessment shows only part of the picture.
Anyone who controls their GmbH (Austrian limited liability company) largely determines the managing director’s remuneration, distributions and their timing.
Profit distributions are subject to final taxation – they do not appear in the income tax assessment notice at all.
Which funds actually flow to the person concerned – and which could flow to them?
In the expert opinion: Distributions can be evidenced through shareholder resolutions and the balance sheet profit.
What counts as income.
What matters is all income actually received in money or benefits in kind:
- Managing director’s remuneration: where the person has control, check for appropriateness by way of an arm’s-length comparison
- Benefits in kind: such as the company car; for an electric car, the taxable value is zero
- Profit distributions: net of 27.5% KESt (Austrian capital gains tax), evidenced by shareholder resolutions
Shareholding above 25%: The managing director’s remuneration is then treated for tax purposes as self-employed income – with its own adjustments.
Retained profits are not off limits.
Under the Anspannungsgrundsatz (principle that a maintenance debtor must make full use of their earning capacity), possible profit withdrawals must not be omitted to the detriment of those entitled to maintenance.
- Reserves need reasons: evidenced by a realistic ex-ante forecast
- Burden of proof: the maintenance debtor must demonstrate the foreseeable negative development
- Only what is justifiable: what is attributed is what could reasonably have been withdrawn
Distribution potential: working capital less risk reserves and project requirements – limited by the balance sheet profit.
Two points that are often overlooked.
Shareholder current account
Ongoing “quasi-withdrawals” without repayment can constitute income under maintenance law.
Three years instead of one
For self-employed persons, the last three completed financial years count – for the future, the trend.
What matters is what actually flows to the person – or could justifiably flow to them.
From the tax assessment to the assessment basis
Fictitious worked example. Sole shareholder and managing director, figures net in euros per month:
- Managing director’s remuneration per assessment: 3,500
- + Private use of company car: 300
- + Profit distribution after KESt: 1,200
- + Quasi-withdrawals from current account: 800
- Assessment basis: 5,800
Around two thirds more than shown in the tax assessment.
Freely chosen figures, not a real engagement. Whether an item is attributable depends on the individual case.
Have income determined in a comprehensible way.
We determine the maintenance assessment basis – as a court-appointed or private expert opinion. Get in touch with us in a free initial consultation.