Intra-group financing in Austria, alongside the interest rate, a particular strong focus is placed by the tax authorities on whether the debt instrument might be re-qualified into “hidden equity”. Thus, there should be documentation on the capital structure of the borrower, transparency of the loan agreement as well as the arm's length character of the terms and conditions.

In a recent decision, the Federal Fiscal Court (Bundesfinanzgericht, BFG) made important statements for M&A practice regarding a dividend reservation in favour of the seller in the course of a share deal. The reserved dividend was considered a tax-exempt profit distribution, and the criteria for this classification were elaborated on in more detail by the BFG.