Pursuant to section 303 of the Federal Fiscal Code (BAO) , proceedings concluded by means of a final and binding decision may be reopened by the tax authority, inter alia, if facts or evidence in the concluded proceedings have "newly emerged" (section 303 para 1 lit b BAO). In certain cases and before the expiry of the statute of limitations, this provision is intended to give legal correctness priority over legal certainty and to enable the comprehensive amendment of notices. In practice, it is important, for example, if a tax audit is carried out after a decision has been issued and new circumstances come to light in the course of the audit. However, it can be disputed which facts or evidence have "newly emerged" in an audit. If the authority was already aware of them, they are not "new" and the possibilities to change an assessment are very limited. In the case at hand, it was also disputed whether the circumstances were new. The Supreme Administrative Court (VwGH) relates the term "new" to the respective year. Therefore, the same fact can theoretically be "new" every year. The Federal Fiscal Court (BFG 28.06.2022, RV/7101157/2011) nevertheless ruled in the specific case in favor of the taxpayer that the facts were not new because they had already been disclosed in a previous year. The decisive factor was that it was recognisable that the facts have an impact on the following years.
Shares in a limited partnership including the attributable "special business assets" (Sonderbetriebsvermögen) were contributed to a GmbH and this was reported to the tax office in 2004 and the relating documents were submitted. A distribution was made in the financial year 2005/2006. The authority initially assessed the tax with an assessment notice in accordance with the tax return. Thereafter, a tax audit took place. With reference to the audit findings, the tax authority reopened the corporate income tax proceedings and reassessed the corporate income tax for 2006 and 2007. The special business assets had not been known to the tax office in 2006 and 2007, it argued. The taxpayer filed an appeal against the reopening of the proceedings.
For the Federal Fiscal Court (BFG), no new facts or evidence were recognisable on the basis of the specific facts of the case and it granted the appeal.
Case law of the VwGH
According to the case law of the VwGH, whether or not facts are “new” is to be assessed only from the perspective of the respective proceeding. The "new occurrence of facts and evidence" thus refers to the state of knowledge of the respective year of assessment (cf. VwGH 13 November 2019, Ra 2019/13/0102; VwGH 27 February 2014, 2011/15/0106).
Cross-procedural / cross-periodical knowledge of facts
A reopening of the proceedings by the tax authority cannot be based on such facts that were already known to the authority but were not further considered in the preliminary proceedings or considered as being immaterial (VwGH 8.11.1973, 1428/72).
A contribution filing is undoubtedly also relevant for subsequent years and cannot be disregarded or even negated in subsequent years, in which the special business assets continue to be shown in the balance sheet, because the tax authority in question filed these documents in the taxpayers' corporate income tax file (cf. also BFG 29 March 2017, RV/6100881/2014).
Newly emerged facts and evidence were therefore not recognisable for the BFG.
Result and comment
In the case of a fact pattern that crosses multiple periods, it should be sufficient to disclose it once in full and to refer in this disclosure to the effects in subsequent years. In the following years, it should then be sufficient to refer to the disclosure that has already been made (in this specific case by showing the special business assets in the balance sheet of the following years) in order to be protected against a reopening of proceedings of the following years. According to this case law, a complete annual disclosure of all documents of one fact pattern would not be necessary. Since the tax office has not appealed this decision to the VwGH, it is questionable whether the VwGH shares this view. It remains to be seen whether the VwGH will clarify its case law and follow the BFG.