Austrian private foundations have been placed at a distinct disadvantage over the course of the past several years as a result of a variety of legislative, mostly tax-related, measures. In addition, a line of decisions from the Austrian Supreme Court on questions involving advisory boards presented grantors and advisors with considerable challenges.
A new tax convention has been in place between Austria and Liechtenstein since the beginning of 2014 as a result of which many grantors are considering 'migrating' their foundations. When considering this type of move, it is important to weigh the advantages and disadvantages against one's own needs. As of 1 April 2014, there are 3,257 currently registered foundations and 446 foundations have been cancelled to date. (Source: Compass-Gruppe)
Despite all expressions of doubt, Austrian private foundations remain very well-suited for succession planning and the multi-generational retention of family wealth. However, in particular in light of the current environment, advice and support from a competent expert is needed in order to select the right form of foundation and its structure. Another desirable factor would be for the legislature to give consideration to the longevity of foundations and clarify important tax and legal issues in a 'crisisproof' manner.