The Austrian Supreme Administrative Court had to decide on the question whether a tax-neutral step-up of shares had to be granted when a taxpayer became resident in Austria. A necessary requirement for such a step-up was that Austria did not have any taxation rights on the shares before the taxpayer moved to Austria. Since he had left Austria a couple of years before, the crucial question was whether Austria had ever lost its taxation rights. At the core of the case was a very technical provision of the tax treaty between Austria and the US. However, the judgment is also interesting from a tax treaty interpretation perspective. Michael Lang analyzes whether the Court’s approach is in line with general rules of interpretation of international treaties.
