The Budget Supplementary Act 2011, passed by the end of 2010, foresees the introduction of a withholding tax on capital gains that are realized regarding securities as of October 1, 2011. On June 16, 2011 (published June 24, 2011) the Austrian Constitutional Court (Verfassungsgerichtshof - VfGH) ruled that the introduction of the new withholding tax on capital gains must not be introduced before January 1, 2012 due to the preparation time needed by the banks to implement the new law (VfGH 16. Juni 2011, G 18/11).
In detail the Constitutional Court abolished the provisions providing for the withholding tax on capital gains (§93(2)(2) Income Tax Act und §95(2)(2) Income Tax Act), held that the introduction as of January 1, 2012 would not violate the Constitution and noted that he did not share the other concerns of the banks regarding the new law. In particular, the Constitutional Court ruled that the taxation of capital gains of securities is generally not a violation of the Constitution; also, the costs incurred by the banks as a consequence of the new withholding tax are not an infringement of the Constitution.
A Governmental legislative proposal included in the Tax Amendment Act 2011 from May 31, 2011 already set April 1, 2012 as the new date of introducing the withholding tax on capital gains, since the introduction of the new system of how to tax capital investment income would generally be postponed to April 2012. This date might change in light of the ruling of the Constitutional Court from June 16, 2011.
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