Liebhaberei im Einkommensteuergesetz

Abstract

The bachelor thesis addresses the issue of "Liebhaberei" (hobby activity) in Austrian tax law. Since the term "Liebhaberei" is not explicitly defined in the Income Tax Act, it leads to legal uncertainties, making it one of the most challenging topics in Austrian tax law. The thesis aims to examine the legal framework, tax implications, and legal consequences of "Liebhaberei." It extensively analyzes this issue through case law analysis and provides affected taxpayers with a clear and concise guideline. Legal foundations for assessing „Liebhaberei” include the Income Tax Act, the VAT Act, the Hobbyism Regulation, and the Hobbyism Guidelines. Clear criteria and distinctions are employed in the assessment, considering factors such as the extent and development of losses, the ratio of losses to profits, and market behaviour, to determine if an activity qualifies as "Liebhaberei." The tax authority can issue provisional assessments when tax liability related to “Liebhaberei” is uncertain. Furthermore, the thesis examines regulations concerning rental activities in relation to "Liebhaberei." Tax authorities assess whether "Liebhaberei" exists at the onset of smallscale rentals and only after the emergence of losses in other activities. Various aspects, such as property usage and rental to relatives, are scrutinized. Additionally, a forecast calculation is mandatory for rentals to demonstrate an intent to generate overall surplus. Deviations from this forecast or a negative forecast calculation within the designated observation period lead to "Liebhaberei" classification, rendering the activity non-taxable. Practical examples and a review of recent case law aim to illustrate theory and establish practical relevance. Overall, the thesis provides a comprehensive analysis of hobbyism in the Income Tax Act, aiming to enhance its application in Austrian tax law. It concludes with a summary and outlook on future developments, emphasizing the complexity of the topic, the importance of expertise in practice, and potential legislative changes.

Date of Award	2024
Original language	German (Austria)
Supervisor	Marina Luketina (Supervisor)