Last modified: 20/12/2024 10:1

Corporate taxation

	Rate
Corporate income tax rate	23 % (1)
Capital gains tax rate (2)	27,5 %

1. The corporate tax rate was reduced by January 2024, previous tax rate: 24 %.
2. The capital gains tax is in many cases a withholding tax-dependent on the kind of capital gain.

Residence: A corporation (e.g. GmbH , AG, Flex Kap, SE) is resident in Austria in case it has its seat or its place of management in Austria.

Basis: Generally, a resident company is liable for tax on their worldwide income (corporate income tax). However, profits that were made by permanent establishments of the resident company in other countries can be exempt from this general rule. The exemption depends on the applicable double tax treaty. Non-resident companies (i.e. companies that have neither their seat nor their place of management in Austria) are only subject to limited tax liability. These companies can be exempt from their income derived from Austrian sources.

Taxable income: All the income of a company is generally considered to be business income. There is no distinction made between capital gains and other, “ordinary” income. The taxable income of a company is computed based on the annual accounts prepared in accordance with Austrian GAAP, subject to certain adjustments fpr book-differences, tax-exempt abd non-deductible items, and other corrections. Corporate income tax is imposed on all income, regardless of whether the income is distributed or retained.

Significant local taxes on income: There are no local taxes on income in Austria.

Alternative minimum tax: n/a

Taxation of dividends: Generally, dividends received by coroporations are tax exempt, as long as the company distributing the dividends is not resident in a low tax jurisdication (≤12,5% CIT) and does not have its purpose on gaining passive income (e.g. interest- & royalty-income).

Capital gains: Capital gains are taxed on the Austrian standard corporate income tax rate. However, there is a special “international box participation” exemption: In case the selling company has at least 10% of the shares of a foreign corporation for a period of at least one year, the capital gains (but also potential losses) are not relevant for corporate income tax purposes.

However, the corporation can decide to opt-into the tax regime with each participation in the first year after purchasing the participation. In this case all capital gains and capital losses of the participation are tax effective. But there is also a special split-rule for capital losses.

In general, capital losses are deductible (except “international box participations”). Capital losses on participations that were (long term) capital assets, must be split over 7 yaers, unless there is a capital gain on a participation on (long term) capital assets with which the loss can be neutralized. Capital losses are not deductible if a gain resulting from the underlying transaction would have been exempt from tax (see above, “international box participation”). Consequently, capital losses from sales of shares or write-downs on shares of foreign companies are generally not deductible, unless an opt-in is made the year of purchase. In addition, capital losses and write-downs on loans to related parties may not be deductible.

Losses: May be carried forward for a unlimited period of time as long as the corporation did not change its organisational, economical and shareholder structure substantially (shell-company-acquisition). Losses may be set off against any income of the corporation but only to an extent of 75 % of taxable income. Losses may not be carried back.

Foreign tax relief: Relief is given for most foreign taxes by the exemption method. The credit method is used in double tax conventions with Italy, Japan and Anglo-American countries (UK, US, Canada, Ireland). There is an option for relief by deduction.

Participation exemption: See above under “Taxation of dividens” and “Capital gains”.

Holding-company regime: No

Tax-based incentives: Incentives include: *A research-bonus of 14% of the invested research costs *A so called investment allowance: 10% of the investments-costs can be deducted from the investment costs (maximum annual basis per business: EUR 1.000.000) – additionally to the depreciation of the investments. For ecologiziation investment allowance of 15% can be made.

Group relief/fiscal unity: The Austrian tax law provides a pretty attractive tax group regime: This tax regime allows to offset profits against losses of other group companies under certain circumstances. The special part of the Austrian group regime is, that all foreign companies can be – under special conditions – group members (first level – i.e. that the foreign group member must be connected with an Austrian group member). Consequently, foreign losses can be upset with the profits of the Austrian group members. The head of the group usually must be resident in Austria.

Small company/alternative tax regimes: n/a

Corporate taxation: compliance

Tax year: The tax year is the calender year. Where a company adopts an accounting period that deviates from the calender year, taxes are assessed on the taxable income in the accounting period ending within the calender year. Furthermore, the adoption of a tax year other than the calender year requires the consent of the competent tax office.

Consolidated returns: No

Filing and payment: Annual tax returns must be filed electronically by 30 June of the year following the relevant tax year. However, companies that are represented by a tax advisory company have an extension until September of the year following the relevant tax year. Additionally, the Austrian tax administration and the chamber of tax advisors have an agreement so the representatives have time to file the tax returns until March of the next following year. Since 2024, this agreement has been govered by a statutory regulation. Payments made with respect to the estimated corporate income tax liability, usually determined at one-quarter of the liability for the previous year, are due on 15 February, 15 May, 15 August, 15 November. Final (balancing) payments are due one month after the tax assessment notice issued by the tax authorities is received by the taxpayer. In case the tax declaration is filed after 30 September the fiscal authorities will charge interest on the open tax.

Penalties: Late tax payments and tax refunds are generally subject to interest. Interest begins to accrue in October of the following year, The interest is not deductible for corporate-income if the tax itself is not deductible.

Rulings: Taxpayers may apply for an advance ruling on the tax consequences of a proposed transaction. These advance rulings are only possible for the following topics: reorganization, group taxation, international tax, VAT, abuse. The administrative fees depend on the size of the involved companies.

Taxation of individuals

	Rate
income-parts	Federal Income Tax
up to EUR 13.308	0%
EUR 13.308 – EUR 21.617	20%
EUR 21.617 – EUR 35.836	30%
EUR 35.836 – EUR 69.166	40%
EUR 69.166 –  EUR 103.072	48%
EUR 103.072 – EUR 1.000.000	50%
income parts > EUR 1.000,000	55%

1. Income tax on various forms of capital income amounts to 27,5 % (in some cases 25 %) of taxable capital income.
2. The tax rate on income from private real estate sale is at 30 %.

Residence: Individuals are fully liable to tax if they have a permanent home or their habitual abode in Austria. Individuals have their habitual abode in Austria, when they are physically present in Austria for a consecutive period of six months.

Basis: All resident individuals are taxed on their worldwide income. An income-part of EUR 13.308 is tax exempt for all residents. Non-resident individuals are taxed (usually by withholding) on Austrian-source income only. For non-residents an income-part of EUR 2.419 is tax exempt.

Taxable income: Taxable income covers income from the following categories: (1) Income from agriculture and forestry (2) Income from independent personal services (3) Business income (4) Employment income (5) Capital income (6) Income from rents and royalities (7) Other income (e.g. income from private real estate sales) The total income after deductions in each category, which may be further reduced by lumps-sum deductions or, within limits, by actual payment for special expenses defined by tax law, represents the taxable income.

Capital gains: Capital gains are subject to a flat tax rate of 27,5% . Related expenses cannot be deducted.

Deductions and allowances: Income-related expenses may be deducted by an individual. People with children can make use of a so-called family-bonus which is a tax credit of up to EUR 2.000 per child per year. Additionally, there are many other tax allowances such as the single earner allowance, the single parent allowance or the pension allowance. People with extraordinary burdens are also allowed to deduct these costs.

Foreign tax relief: In case a double tax treaty exists, double taxation is usually avoided by exempting the foreign income. The foreign income is just taken into account for calculating the tax rate (progressive clause). Only if a double tax treaty does not exist or if a tax credit is provided in the respective double tax treaty the individual may credit the foreign income tax against Austrian income tax.

Taxation of individuals: compliance

Tax year: Income tax arises at the end of the tax year unless otherwise specified.

Filing and payment: Annual tax returns must filed electronically by 30 June of the year following the relevant tax year. However, individuals that are represented by a tax advisory company have an extension until September of the year following the relevant tax year. Additionally, the Austrian tax administration and the chamber of tax advisors have an agreement so the representatives have time to file the tax returns until March of the following year. Payments made with respect to the estimated income tax liability, usually determined at one-quarter of the liability for the previous year, are due on 15 February, 15 May, 15 August and 15 November. Final (balancing) payments are due on month after the tax assessment notice issued by the tax authorities is received by the taxpayer. In case the tax declaration is filed after 30 September the fiscal authorities will charge interest on the open tax.

Penalties: Late tax payments and tax refunds are generally subjected to interest. Interest begins to accrue in October of the following year. The interest is not deductible for corporate-income if the tax itself is not deductible.

Rulings: Taxpayers may apply for an advance ruling on the tax consequences of a proposed transaction. These advance rulings are only possible for the following topics: reorganization, group taxation, international tax, VAT, abuse. The administrative fees depend on the size of the involved companies and individuals.

Withholding taxes

Type of Payment	Resident recipients		Non-resident recipients
	Company	Individual	Company	Individual
	Rate (%)	Rate (%)	Rate (%)	Rate (%)
Dividends	23	27,5	23	27,5
Interest that is paid by a finacial institution	23	25	23	25
Royalities	0	0	0	0
Capital gains that are held via a financial institution	0	27,5	0	27,5

The withholding tax is also depending on the double tax treaty and should be analyzed together with the applicable double tax treaty.

Branch remittance tax: None

Anti-avoidance legislation

Transfer pricing: The statutory rules on transfer pricing are not found within one integrated section of the legislation but in several provisions in different statutes. The documentation requirements on CbCR are regulated in the Verrechnungspreisdokumentationsgesetz (VPDG). Announcements issued by the tax authorities indicate their position and thus have considerable relevance in tax practice.

Interest restriction: Annual net interest expense (the excess of interest paid over that received) of group companies is only deductible at up to 30% of EBITDA for corporation- and trade-tax purposes. The 30% limitation applies to all interest, whether the debt is granted by a shareholder, related party, or a third party. This limitation does not apply where the total net interest expense for the year is less than EUR 3 million.

Controlled foreign companies: Austrian has a CFC regime: The control threshold for CFC purposes is more than 50%. If the foreign company generates more than one third of its income from passive income and the foreign tax is not more than 12,5% the CFC-rule applies. Once CFC income is determined, the amount is added to the taxable income of the Austrian shareholder. Taxes paid by the CFC are creditable to the Austrian corporate shareholder only when they are not refundable. Losses generated by a CFC cannot be attributed to the Austrian shareholders but can be carried forward to offset future income of the CFC.

Hybrid mismatches: The neutralization of hybrid mismatches that were introduced by the European Union Article 9 and 9b (of the Anti Tax Avoidance Directive ATAD) were implemented into the Austrian tax Law and are already in force.

Disclosure requirements: Besides the CbC-Reporting that is mandatory for multinational enterprises, also DAC6 (EU-Meldepflichtgesetz) is already in force in Austria.

Exit taxes: Individuals and corporations are subject to an exit taxation, in the fictitious last second they reside in Austria: The exit taxation is at the same tax rate as if the shares/assets were sold to another person. Within the Europen Union (& EEA) private individuals can apply in their tax statement that the exit tax on capital-investments is settled but not payable yet. The tax will then be payable when the private individual sells the capital investments. Companies and individuals with business income that move to another location within the European Union (& EEA) can apply in their tax statement to pay the exit taxation by installments (fixed assets: 5 years, floating assets: 2 years). In case of a movement outside the European Union (& EEA) the exit tax must be paid at once (no installment payments).

General anti-avoidance rule: In Austria a general anti-abuse rule applies across all important taxes. It allows the tax authorities to counteract tax advantages arising from abusive arrangements.

Digital services tax and Other significant anti-avoidance legislation: Digital service tax has a tax rate of 5% and affects business models such as social networks; search engines; intermediaries (such as online selling platforms) and other digital services provider. The tax base are the revenues of digital services that are performed in Austria.

Value-added tax/Goods and services tax

Type of tax: Value-added tax (VAT) on EU model. Applies to supplies of most goods and services and to imports. There is a broad range of exempt supplies.

Standard rate: 20%

Reduced rates: 10% (e.g rental for residential purposes, transportation, medication, foods) & 13% (air transportation, art, cultural institutions, living animals or plants)

Registration: The registration is essentially to anyone who carries out services or goods and gains taxable turnover in Austria. This does not apply if the business turnover does not exceed EUR 55.000 (gross).

Filing and payment: The VAT must be reported and paid monthly or quarterly to the tax office.

Social security contributions

Year 2025

	Employer	Employee
	Rate (%)	Rate (%)
health insurance	3,78	3,87
pension insurance	12,55	10,25
accident insurance	1,10	0,00
unemployment insurance	2,95	2,95
Chamber of Labour contribution	0,00	0,50
residential building subsidies contribution	0,50	0,50
insolvency compensation fonds contribution	0,10	0,00

The maximum basis is EUR 6.450 per month.

The minimum basis is EUR 551,10 per month. In case the employee receives less than this amount, the social security contribution is much less for the employee. However, there are stricter rules for the contribution-parts of the employer.

Self-employed

Year 2025 maximum base: EUR 90.300 per year minimum base: EUR 6.613,20 per year Health insurance: 6,80% pension insurance: 18,50% accident insurance: EUR 12,07 per month.

Other taxes

Capital duty: No

Immovable property taxes: Austria has a (pretty low) land tax.

Transfer tax: Real-estate transfer tax: 3,5%. This tax is also levied on indirect transfers from the acquisition of at least 95% of the shares in property-owning companies (share-deals).

Stamp duty: There are a lot of stamp duties. The most relevant is the so called “Eintragungsgebühr” of 1,1% of the purchasing price which must be paid when there is an entry in the land register (property transfer of land).

Net wealth/worth tax: No

Inheritance/gift taxes: No

Other: Customs duties (customs duties are levied under a common system on imports into the EU and the rates depend on various criteria). Up to a merchandise value of EUR 150, no customs duty is payable.

Tax treaties

Austria has an extensive tax treaty network (more than 90 double tax treaties).