English »Legal Updates
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)
7. September 2022
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 The Supreme Court has now ruled that the loan agreement cannot be rescinded..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)
21. July 2022
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)
20. April 2022
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).
13. April 2022
Inadmissible contract clauses in building savings contracts
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)
30. March 2022