Withholding tax (KESt)
Step-by-step manual for project partners
Project partners of ERSTE Foundation who are residents of countries which have concluded double taxation treaties with Austria (see box) have to fill in and sign the form Declaration by legal entities for the purpose of tax treaty relief at source.
Here you can download the form, a documented sample of the form and find a step by step guide for help to fill it in properly. Please follow these instructions carefully. If you have additional questions please contact your project manager. When you have completed the document, please send us the original by mail to our office address.
Among others, the following countries have concluded double taxation treaties with Austria:
Bosnia and Herzegovina
Austrian law stipulates that every payout made by ERSTE Foundation to third parties is subject to withholding tax (Kapitalertragsteuer, KESt). ERSTE Foundation is obliged to retain the tax amount and pay it to the Austrian Inland Revenue authority. For the funding amount not to be taxed twice (in Austria and in the project partner’s country of residence) the Republic of Austria has concluded double taxation treaties with a number of countries.
If the recipient of the funding amount is resident in a country that has concluded a double taxation treaty with Austria, the funding amount may not be subject to KESt or to a reduced rate of KESt, depending on the terms of the treaty.
What do you have to do?
In order to apply for tax treaty relief (i.e., exemption from KESt or application of a reduced KESt rate to the funding amount on the basis of a double taxation treaty) it is required to provide the Austrian Inland Revenue authority with the form Declaration by legal entities for the purpose of tax treaty relief at source (ZS-QU2). This form has to be filled and signed by the project partner. If the payout exceeds 10,000 euros the form must additionally be stamped and signed by the Inland Revenue office in the project partner’s country of residence.
Below you can download the form. In order to complete it properly, please follow the instructions. If you need additional assistance, please download the manual at the end of the page. It contains frequently asked questions (FAQ) and a sample form that shows you how to complete the form correctly.
1. Download the form
Here you can download the form:
2. Complete the form, print it out
Complete parts I, II, and III of the form and sign it. You can either complete the form on your computer and print it out OR print out the empty form and complete it handwritten. As the form has to bear your original signature it is not possible to save the completed form on a computer. We need the form in hard copy, with the required signature(s) on it.
3. If your project runs longer than one year: Make sure that every payout is covered by the valid form ZS-QU2
This information refers to part II. c) of the form.
The form ZS-QU2 is valid one year from the date of the form, for the amount stated in the form. This means, during your project term you might have to provide more than one form ZS-QU2, depending on when the funding amounts are paid out.
4. If you are applying for a funding amount of more than 10,000 euros: Have your Inland Revenue office sign part IV of the form
If you are applying for more than 10,000 euros it is necessary that your Inland Revenue office confirm that you are resident (i.e., subject to taxation) in the country you have stated in section I of the form (your country of residence). This confirmation has to be given on the same paper form that you have completed and signed, under part IV, “Certificate of Residence from the tax administration of the country of residence”.
To help your Inland Revenue office understand what you ask them to confirm we have prepared a short explanatory text, which you can hand to your Inland Revenue office together with your signed form ZS-QU2. You find it in the manual that you can download at the end of the page.
5. Return the original hard copy to ERSTE Foundation
Please return the original hard copy of the form ZS-QU2 in German/English language, which you – and your Inland Revenue office, if you apply for more than 10,000 euros – have signed. The Austrian tax authority will not accept any other form, or translations of the form. Please hand the original hard copy of the form to your project manager or send it to the office of ERSTE Foundation:
Am Belvedere 1
ERSTE Foundation will only be able to fully pay out funding to you if you provide the form Declaration by legal entities for the purpose of tax treaty relief at source (ZS-QU2) completed and signed as required.
Manual to complete the form ZS-QU2
Here you can download a manual, which we hope provides you with all the information you need to complete the form ZS-QU2 properly. The manual contains
- the form Declaration by legal entities for the purpose of tax treaty relief at source (ZS-QU2),
- a sample form ZS-QU2 that shows you how to complete the form correctly,
- an information for the Inland Revenue office in your country of residence (the explanatory text regarding the required confirmation in part IV of the form).
To download the manual, click on a language:
You have a form ZS-QU2 dated 31 March 2009, for an amount of 20,000 euros. Four payments of 5,000 euros are made – in April, July, and October 2009, and in January 2010. On 1 May 2010 another 2,000 euros are paid out.
In this case, two forms ZS-QU2 are required. The first, which is valid from 31 March 2009 until 30 March 2010, covers the three payouts in 2009 and the one in January 2010. The amount of 2,000 euros is paid out on 1 May 2010, which is after the form ZS-QU2 has expired (30 March 2010). Therefore a new form ZS-QU2 has to be issued. It is valid one year – from 31 March 2010 until 30 March 2011 – for an amount of 2,000 euros.
If you have any questions please do not hesitate to contact your project manager!
She or he will be happy to help you.