The Federal Tax Administration (FTA) has been allowed to provide administrative assistance to the Austrian Ministry of Finance on the basis of the double taxation agreement between Switzerland and Austria. The Federal Administrative Court dismissed an appeal against this in its decision (A-6394/2016) of 16 February 2017.

Based on the Agreement between the Swiss Confederation and the Republic of Austria on the Avoidance of Double Taxation in the Field of Taxes on Income and on Capital (DTA CH-AT), the Austrian Ministry of Finance approached the FTA on 26 November 2015 with a request for administrative assistance. It was requested to provide assistance in order to ensure correct taxation in Austria with regard to X. for the tax period 2012 to 2014, since it was suspected that X. had not disclosed his "world income" in Austria. Furthermore, the request for administrative assistance stated that X. was the founder, former executive and supervisory board member of the globally active B. Group and it was proven that a large part of commissions and management fees paid personally to X. by companies from the B. Group had been transferred to Switzerland, Liechtenstein and Jersey via companies (affiliated companies).

The request for administrative assistance included questions regarding the tax registration and business activities of X. in Switzerland. In addition, various questions were raised with regard to A. & Co. domiciled in Switzerland (including their relationship with X. and the tax registration, operational activities).

Since the request for information was in accordance with Austrian law and the DBA CH-AT and the domestic possibilities for obtaining information had been exhausted, the FTA decreed on 13 September 2016 that - with a few exceptions - administrative assistance would be provided to the Austrian Ministry of Finance or its tax administration (with the proviso that the information provided may only be used in proceedings against X.).

On 17 October 1016, X. and A. & Co. filed an appeal against the order with the Federal Administrative Court. The complaint was based on the fact that the principle of subsidiarity had been infringed and that the information requested was not "probably significant" within the meaning of Article 26, para. 1 DBA CH-AT.

The Federal Administrative Court first examined whether the principle of subsidiarity had been violated and followed the remarks of the lower court on this point.

In a second step, the Federal Administrative Court examined whether the information to be provided in accordance with the contested FTA's final ruling could be classified as not "probably significant". The Federal Administrative Court stated that the actual purpose of any administrative assistance is to enable the requesting state to clarify points that have so far remained in the dark, on the one hand, and to verify existing information, on the other, by means of information and documents that are in the requested state. The Federal Administrative Court also followed the remarks of the previous instance on this point, according to which the request does not need to be interpreted and is comprehensible. There were also no other reasons which would speak against granting administrative assistance. The request of the Austrian authorities complied with the formal requirements and contained the necessary information: Both the taxable person and the period of time for which the information is requested are stated. In addition, the application contains a description of the information required and the tax purpose for which the information is required is sufficiently explained. There can therefore be no question of spontaneous administrative assistance.

The appeal against the FTA's final decision was dismissed in its entirety.

The decision was appealed to the Federal Supreme Court.