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TAX & BUSINESS
Lease agreement to be charged at 21 times the annual value
The Administrative Court (VwGH) ruled that the assessment base for the fee of a lease agreement of certain and indefinite duration may exceed the maximum limit of 18 times the annual value.
A GmbH concluded a lease agreement for premises with the City of Vienna. The contract was concluded for an indefinite period, granting the tenant an annual right of termination, while the landlord's right of termination was limited to important reasons under the full scope of the Tenancy Act (Mietrechtsgesetz).
The tenant contractually waived its right of termination for the next 25 years. The GmbH therefore assumed that the fee could be calculated at most on the basis of 18 times the annual value, whereas the tax office set the fee at 21 times the annual value.
Background
Written standing contracts (lease agreements excluding contracts for residential premises, lease agreements and leasing contracts) are subject to a fee. The assessment base is calculated from the annual value of the recurring fees multiplied by the duration plus the one‑off services. The applicable multiplier depends on whether the contract is of a certain or indefinite duration. For a contract of a certain duration, the agreed duration, but not more than 18 times the annual value, is to be applied. In contrast, for an indefinite duration the three‑fold of the annual value is to be applied.
Decision of the VwGH
The VwGH clarified that the provisions of the Fees Act (Gebührengesetz) that are decisive for the fee calculation take precedence over the provisions of the Valuation Act (Bewertungsgesetz). The Valuation Act is therefore only to be applied where the Fees Act does not contain a deviating provision.
Standing contracts concluded for an indefinite period, in which a waiver of termination was initially agreed for a certain period, are to be charged for the period of the termination waiver as contracts of a certain duration and for the subsequent indefinite period as contracts of indefinite duration. The contract is not split into two separate contracts with independent declarations of intent. Rather, within a single contract there are two distinct components of the contract duration: first a limitation to a certain period and then the element of indefinite contract duration.
The standing‑contract fee in such configurations is therefore to be calculated on the basis of 18 times the annual value for the certain duration, increased by three times the annual value for the indefinite duration. Consequently, the fee for a correspondingly structured contract can be calculated at most on the basis of 21 times the annual value of the recurring services.
Conclusion
The VwGH's decision is consistent with its previous case law on determining the assessment base for fees in contracts with a termination waiver and combined contract periods. The 18‑fold of the annual value does not represent an absolute ceiling. This limit applies only to the part of the contract concluded for a certain duration. For the subsequent indefinite contract duration, the three‑fold of the annual value must also be taken into account.
The tenant contractually waived its right of termination for the next 25 years. The GmbH therefore assumed that the fee could be calculated at most on the basis of 18 times the annual value, whereas the tax office set the fee at 21 times the annual value.
Background
Written standing contracts (lease agreements excluding contracts for residential premises, lease agreements and leasing contracts) are subject to a fee. The assessment base is calculated from the annual value of the recurring fees multiplied by the duration plus the one‑off services. The applicable multiplier depends on whether the contract is of a certain or indefinite duration. For a contract of a certain duration, the agreed duration, but not more than 18 times the annual value, is to be applied. In contrast, for an indefinite duration the three‑fold of the annual value is to be applied.
Decision of the VwGH
The VwGH clarified that the provisions of the Fees Act (Gebührengesetz) that are decisive for the fee calculation take precedence over the provisions of the Valuation Act (Bewertungsgesetz). The Valuation Act is therefore only to be applied where the Fees Act does not contain a deviating provision.
Standing contracts concluded for an indefinite period, in which a waiver of termination was initially agreed for a certain period, are to be charged for the period of the termination waiver as contracts of a certain duration and for the subsequent indefinite period as contracts of indefinite duration. The contract is not split into two separate contracts with independent declarations of intent. Rather, within a single contract there are two distinct components of the contract duration: first a limitation to a certain period and then the element of indefinite contract duration.
The standing‑contract fee in such configurations is therefore to be calculated on the basis of 18 times the annual value for the certain duration, increased by three times the annual value for the indefinite duration. Consequently, the fee for a correspondingly structured contract can be calculated at most on the basis of 21 times the annual value of the recurring services.
Conclusion
The VwGH's decision is consistent with its previous case law on determining the assessment base for fees in contracts with a termination waiver and combined contract periods. The 18‑fold of the annual value does not represent an absolute ceiling. This limit applies only to the part of the contract concluded for a certain duration. For the subsequent indefinite contract duration, the three‑fold of the annual value must also be taken into account.