Domestic residence in the case of multi-year assignments abroad

An employee was registered at their parents’ address from 2009 to 2017. In 2011, they were assigned abroad, initially for a period of three years. Shortly before its expiry, the assignment was extended until 2017, but was terminated early in July 2015. Just over a year later, a further assignment abroad took place.

During their stays abroad, the employee was able to use their sister’s room in the parental home when visiting home. The issue under dispute was whether the employee was subject to unlimited tax liability as early as January 2015, i.e. prior to their return to Austria, or only from July 2015 onwards.

Decision of the Federal Fiscal Court (BFG)

The decisive factor for the existence of unlimited tax liability for the entire year is whether the taxpayer already had a domestic residence as of January. A habitual abode was only to be assumed after the end of the assignment and the return to Austria in July 2015.

Although the employee could stay overnight temporarily in the parental home during visits, their former room had been used by their sister since the beginning of the assignment. Accordingly, this room was only available to them when needed. In addition, the bathroom, toilet, kitchen and living room were available for shared use by all family members.

Case law of the Federal Fiscal Court (BFG)

According to the case law of the BFG, the mere possibility of occasionally using a room in the parental home is not sufficient to qualify as having one’s own residence. A residence requires that the dwelling enables an autonomous way of life. Moreover, there was a lack of possession of the dwelling. The mere provision of a room for occasional overnight stays does not confer legal and actual disposal power.

In this case, it was also relevant that, due to an activity abroad exceeding three years, it was unlikely that the employee maintained their residence in their father’s apartment during that time. During the period of the assignment abroad, the individual therefore had neither a residence nor a habitual abode in Austria. Consequently, the requirements for unlimited tax liability in Austria were not met. There were also no indications of limited tax liability, as the activity was carried out exclusively abroad. The income derived from this activity was therefore neither subject to unlimited nor limited tax liability in Austria and was not to be considered in the income tax return. Only the income from activities performed in Austria after the return became subject to income tax in Austria.