Austria: Slightly Lower Fees, A Little More Liberalisation - The 2017 Amendments To The Austrian Trade Act

Following a year of intense political discussion, the Austrian Parliament adopted numerous amendments to the Austrian Trade Act 1994 (Gewerbeordnung 1994, "GewO") at the end of June. While the reform falls significantly short of the outgoing government's original announcements last July with the aim to liberalise market access and to cut red tape for businesses, it nevertheless introduces several material changes to business activity in Austria.

The GewO provides the central regulatory framework for the uptake and performance of commercial activities in Austria. However, above all agriculture, certain healthcare or financial services or specific transport activities are not covered. Besides prerequisites for market access and the operation of a business, including requirements for the marketing of certain products, the GewO governs the construction and operation of plants (installations/facilities) used to carry out activities falling under its scope (gewerbliche Betriebsanlagen).

Before lawfully commencing an activity falling under the GewO, a trade (Gewerbe) has to be registered with the competent Trade Authority (Gewerbebehörde). Through such registration a business licence (Gewerbeberechtigung) is obtained. For several activities, registration in the trade register or even prior authorisation must be sought before commencing the commercial activity. For some, professional qualification has to be proven when registering ("regulated trades", regelmentierte Gewerbe). Exceptions from the latter requirement apply, in the majority of cases, to businesses manufacturing goods on industrial scale (in Form eines Industriebetriebs). On the other hand, there are reduced qualification requirements for certain sub-activities falling under the scope of a regulated trade, such as ice cream manufacturing, which is deemed part of the regulated pastry business (so-called "partial trades", Teilgewerbe). Nevertheless, the GewO also explicitly allows holders of a business licence to provide certain activities of other trades for which no business licence was obtained ("ancillary rights", Nebenrechte).

The most significant changes of the current reform, which enter into force gradually (some following publication in the Federal Law Gazette, some three months later and others in May 2018), are: 

Reduction and extension of regulated trades

Instead of 80, only 75 trades will be regulated. In fact, only cosmetics manufacturing, employment agency services and the currently defined partial trades, except earthworks, were liberalised, meaning that professional qualification is no longer required for these businesses. Otherwise, certain activities were only "combined" under the same heading in Art 94 of the GewO for one regulated trade (eg shoemakers, orthopaedic shoemakers and saddlers, which until now were separate trades), but without any material changes with respect to the access prerequisites.

In addition, the scope of several existing regulated trades has been extended or clarified to enable the provision of activities falling under regulated trades. For instance, every hotel operator may now offer massage services or certain combined travel services (deemed to be part of a package tour), such as sports equipment rental.

To combat illegal work, certain currently non-regulated, construction-related activities, such as the separation of building waste on building sites or the sealing of building joints, are now part of the regulated trade "builders" or other related trades.

Extension of ancillary rights

In the future, every holder of at least one registered trade is, in addition to the existing ancillary rights, explicitly entitled to provide activities falling under the scope of another unregistered trade, up to 30 % of the annual turnover, provided that the activity under the registered trade is supplied in a "useful matter" (sinnvoll ergänzt). Regarding regulated trades, this can only be done up to 15 % of the value of the single order. The regulated activities also must be ordered in a certain temporal connection with the main order that is being supplemented.

Introduction of a "single licence" – "advising before punishing"

Under the amended GewO, registered trade(s) and ancillary rights are referred to as a "trade licence" (Gewerbelizenz). Additional non-regulated trades now only require a notification instead of a registration. It is too early to judge the practical consequences of that envisaged simplification.

If a market participant offers non-regulated trades beyond the scope of its trade licence, the Trade Authority must issue an order to notify the necessary non-regulated trade(s) within three weeks and must advise the recipient accordingly. If the market participant complies with the order, the Authority shall waive any administrative penalty. Non-repeated violations of the duty to notify one or more additional non-regulated trades will be punished less severely.

Termination or reduction of governmental fees and Chamber of Commerce levies  

Stamp duties or administrative charges will no longer apply to any governmental activity regarding market access and business operation.

In addition, in particular the extension of ancillary rights should reduce annual basic fees (Grundumlagen) for mandatory membership to one or more professional organisations (Fachorganisation) in the Austrian Chamber of Commerce (Wirtschaftskammer Österreich). This is because fewer additional business licences are required.

A recently adopted amendment to the Chamber of Commerce Act (Wirtschaftskammergesetz) has already established that, beginning in 2019, only one basic fee has to be paid for every membership in a single professional association. In the past, several branches (Betriebsstätten) registered beside the main location to operate a trade triggered "multiple membership" ("Mehrfachmitgliedschaft") in the same professional association and, thus, the obligation to pay the basic fee several times. Moreoever, no basic fee has to be paid by start-ups in the year following the year the business licence is obtained.

Simplifications for the construction, change and operation of plants

The 2017 amendments of the Trade Act have also simplified the law with respect to the construction, change and operation of plants. In particular, the "simplified procedure" for certain – usually smaller – plants (vereinfachtes Genehmigungsverfahren), with reduced standing rights for neighbours and the resulting acceleration effect, was extended. In such cases, the Trade Authority has, in the future, to decide on the plant permit application within two months, and in all other plant-related procedures within four months.

In addition, the Trade Authority's one-stop-shop function was extended. A plant construction and operation permit may now include approval for the clearing of forests (Rodung) and other activities related to waters subject to a permit requirement under the water regulations (eg for certain bridges in flood zones).

Changes made to plants which are "neutral" in terms of additional emissions or in which machinery is replaced with similar machinery no longer require prior notification to the Trade Authority. The principle of "advising before punishment" was also implemented for violations of plant-related requirements, subject to certain conditions.

Finally, the 2017 GewO amendments bring some alterations for operators of plants falling under the scope of EU Directive 2010/75/EU (IPPC installations), inter alia, a reduction of costs of promulgations (Kundmachungen), to which the operator has to contribute.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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