Tax debt in distress – navigating fiscal claims in restructuring and insolvency in Austria

In Austria, tax debts incurred prior to insolvency are treated as ordinary insolvency claims (§ 51 IO) and subject to quota distribution. Post-insolvency tax claims qualify as estate claims (§ 46 IO) and must be paid in full. The tax authority has no preferential creditor status but is classified as a “compulsory creditor”.

Prior to the filing of insolvency, tax offices may enforce claims through seizures, searches (§ 6 AbgEO), or registration of liens. Security rights established within 60 days before filing may lapse, except public-law liens.

In early distress stages, deferral or instalment agreements (§ 212 BAO) are possible but require disclosure and credible repayment ability. Interest currently accrues at 8.25 %. Tax remission (§ 236 BAO) is limited to existential hardship or structural injustice.

In restructuring proceedings (§ 156 IO), tax debts are generally subject to the insolvency quota unless excluded due to the debtor’s fault (e.g. failure to file). In such cases, full personal liability remains with directors. This also applies to estate claims and any tax debt resulting from breach of duty (§§ 9, 80 BAO).

A major risk arises from selective payments. Prioritising private creditors over the tax office may trigger personal liability or criminal prosecution – ranging from tax evasion (§ 33 FinStrG) to serious fraud (§ 39 FinStrG), with potential sentences up to 10 years and fines of EUR 2.5 million.

Conclusion

Tax debt is not just a fiscal concern, it is a restructuring and compliance risk. Addressing it requires coordinated legal, tax, and strategic planning, particularly in international and cross-border settings.

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Mario Kapp was the sole founder of the law firm in 2006. He is also the Managing Partner and specialises in bankruptcy law, corporate law, and business restructuring. 

Raffaela Lödl-Klein is a partner of KAPP & PARTNER Rechtsanwälte GmbH, and specialises in real estate and corporate law. She joined the firm in 2013.