These types of gifts fall under the non-deductibility provisions of § 20 of the Austrian Income Tax Act (EStG 1988) in conjunction with § 12 of the VAT Act (UStG 1994). Reference is also made to the applicable income tax and VAT guidelines as well as to the case law of the Austrian Supreme Administrative Court (VwGH).
If such expenses are recorded in the accounts in a way that reduces taxable income, this constitutes intentional tax evasion under the Austrian Financial Criminal Act (FinStrG), with maximum penalties of up to twice the evaded amount.
