Provincial Revenue Office for Vienna v Elfriede K

JurisdictionAustria
CourtAdministrative Court (Austria)
Austria, Administrative Court.

(Schimetschek, President; Kaupp, Hofsttter, Heller and Simon, Judges)

Provincial Revenue Office for Vienna
and
Elfriede K1

Diplomatic and consular intercourse and privileges Permanent diplomatic envoys Privileges and immunities of Diplomatic envoys and their staff Entitlement to immunity from taxation Whether PAYE provisions under municipal law applicable to salary paid to national of receiving State as embassy employee The law of Austria

Summary: The facts:Elfriede K, an Austrian national employed by the Canadian Embassy in Vienna, filed an application to be granted a tax-free allowance under the Austrian Income Tax Law of 1967, in connection with her setting up home. Her application was refused but on appeal she was held to be entitled to the allowance. The Provincial Revenue Office appealed to the Administrative Court. Her entitlement to the allowance depended on whether her employment at the embassy was subject to the deduction of PAYE tax by her employer under municipal law.

Held:The appeal was allowed and the decision being challenged was quashed.

As a general rule income from dependent work was subject, under Austrian tax law, to the deduction of tax under PAYE arrangements. This rule was, however, inapplicable where it could not be enforced owing to the territorial limitation of the Austrian power of taxation where the salary in question was drawn from a foreign employer. According to the generally

recognized rules of international law neither the sending State nor the diplomats representing that State in the receiving State could be subjected to Austrian taxation with respect to the diplomatic mission's activities. Tax liability regarding the payment of the taxes of other persons employed by the sending State was likewise excluded

The following is a summary of the formal opening paragraph of the judgment:

The President of the Provincial Revenue Office (Finanzlandesdirektion) for Vienna, Lower Austria and Burgenland brought a complaint against the decision of the Appeals Tribunal (Berufungssenat) of the same Office of 6 March 1969 concerning the income tax assessment for 1965 of Elfriede K, of Vienna.

The following is the text of the relevant part of the judgment of the Court:

[The Administrative Court] holds as follows:

The decision being challenged is quashed on account of the unlawfulness of its contents.

Grounds of the judgment

The party concerned declared, in her income tax return for 1965, income drawn from...

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