The KSV1870 warns of a detail of the Ministry of Finance’s economic strengthening law, the assessment period of which ends today. According to the credit protection association, the law hides “an attempt by the finance minister to undo the bankruptcy contest by insolvency administrators for taxes already paid”. Those affected should not comply with this “factually unsubstantiated desire”.
KSV1870: “Not the first try”
MMag. Karl-Heinz Götze, MBA, head of bankruptcy of the credit protection association: “Maybe the finance minister didn’t count on our attention. This is also not the first time that such an attempt has been started, and so far the KSV1870 has been able to nip it in the bud with combined forces. “
Götze explains that this must also succeed this time. The problem with the passage is as follows: According to KSV1870, if a company becomes insolvent, “all creditors are usually interested in quickly bringing their own sheep to dryness. This is contrary to the principle of equal treatment in insolvency law. “
Legal background
However, the legal system (insolvency order) wants to prevent the last “goodies” from being taken out of already insolvent companies and turned into money by individual creditors. “If, contrary to the clear will of the law, this nevertheless happens, the insolvency administrator has an instrument in hand with which the asset or payment can be retrieved,” explains the KSV. On the one hand, this is “good for the other creditors”, but on the other hand it is also “a deterrent to such an approach”. And last but not least, it causes creditors to file for bankruptcy.
“Professional creditors”
Tax authorities and health insurance companies would best understand the current financial situation of a company in addition to the banks of all market participants. They are “professional creditors” and would always try to optimize collectability. That is also good until bankruptcy begins – after that it is contestable. Therefore, not only banks, but also finance and health insurance companies would sometimes find themselves opponents of the insolvency administrators and “do not look forward to it”. According to KSV1870, it should not come as a surprise that there are always attempts – often quite hidden ones – to get an exception to the challenge.
The “bag full of tax sweets”
What now “acts like a sack full of tax sweets”, namely the new economic stimulus law, contains at a “hidden” point an “irrefutable presumption for the future that finance neither knew nor had to know about the debtor’s insolvency”. The law is intended to bring about a reduction in the rate of entry tax on income tax, faster depreciation options, the ability to recover losses and deferrals of taxes.
The provision should apply to all payments by taxpayers from March 2020 to March 2022. This alone means that it has “no corona reference”, the KSV1870 says. And: It has to be expected that this provision will be extended and that “instead of filing bankruptcy filings against recognizable insolvents, the tax offices will simply continue to execute their assets”. That is precisely what will be possible in the future “with impunity or without contestation.
“Ruthless and sanctionless approach”
This in turn harms the economy and the insolvent companies and also the other creditors in the bankruptcy. “So if the Republic of Austria wants to make a contribution to overcoming Corona, it is to intervene arbitrarily by lawfully waiving restructuring proceedings and not by ruthlessly and without sanctions against taxpayers,” said Götze.
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