Statistical matters in M&A: revisiting Reporting Regulation 1/2022

This regulation mandates the reporting of transfer values resulting from certain cross-border activities. Its objective is to provide the Austrian Central Bank with essential data for compiling Austria's balance of payments. The balance of payments reflects Austria's net trade in goods and services with the rest of the world, net earnings on cross-border investments and net transfer payments. It also encompasses the claims of Austrian residents on, and liabilities to, non-residents, particularly concerning financial assets.

The balance of payments is an important indicator for the Austrian economy, reflecting its competitiveness both within and outside the euro area. It also serves as the foundation for various statistics published by the Austrian Central Bank and other institutions.

Scope of Reporting Regulation 1/2022

The Reporting Regulation 1/2022 covers a wide range of cross-border activities, all of which share two key characteristics: a cross-border element and a reporting threshold. Merely domestic transactions are not covered, nor are most cross-border activities of negligible monetary value.

If these two key characteristics are met, various typical transaction situations will trigger the reporting obligation. The list of transactions includes: (i) capital injections and profit distributions from foreign shareholders and by Austrian entities into their foreign subsidiaries; (ii) capital reductions; (iii) the purchase and sale of shares by Austrian shareholders in foreign subsidiaries and by foreign shareholders in Austrian subsidiaries; and (iv) intra-group restructurings involving cross-border share sales or purchases, mergers, share contributions or intra-group capital injections. The reporting threshold for these transactions and profit distributions is EUR 500,000 per case, meaning that many cross-border transactions and profit distributions will trigger reporting obligations.

Reporting obligations may also arise in connection with cross-border capitalisation measures. In such cases, cross-border receivables or liabilities of an Austrian entity totalling at least EUR 10m must be reported. Consequently, typical capitalisation measures such as shareholder loans from a foreign parent company to an Austrian subsidiary, cash-pooling, clearing and current accounts held by Austrian entities abroad, as well as cross-border repos, finance leasing or factoring are to be reported.

Reporting procedure

In practice, reports are submitted through the Austrian Central Bank's online reporting portal, using designated templates or an online data entry mask. Reporting deadlines are typically close to the occurrence of the relevant legal event (e.g. the closing of an SPA). Reports must be submitted by the 15th day of the month following the event. Failure to comply with these requirements may result in fines of up to EUR 5,000.

In the future, when engaging in cross-border transactions, one should be aware of the obligation to report values for statistical purposes. Given its broad scope, Reporting Regulation 1/2022 is frequently applicable in cross-border matters and may evolve into a well-known transaction obligation.

author: Stefan Egger