Austria
Corporate taxes and other direct taxes
Under domestic tax laws, corporations are deemed to be tax resident in Austria if they have either their registered seat or their effective place of management in Austria. In this case, the global income of the corporation is generally subject to Austrian corporate income tax. Other corporations are subject to Austrian corporate income tax only on the basis of income generated from Austrian sources. Partnerships are not subject to CIT. The corporate income tax rate is 23%.
The tax base is generally determined based on the result of the income statement under commercial law, which is then amended insofar as the tax law contains deviating rules (e.g. tax exemptions, restrictions of deductions, or tax-specific valuation rules).
There is a yearly minimum CIT amounting to EUR 3,500 for public companies (AG) and EUR 500 for limited liability companies (GmbH). Any unused minimum amounts can be offset against future CIT payment obligations.
Tax losses can be carried forward indefinitely (but only 75% of the profit of a single year can be offset).
Thin capitalization rules (TCR) are in place in accordance with the EU-ATAD (Anti-Tax Avoidance Directive). Further restrictions relate to the deduction of interest paid to intercompany recipients. CFC rules were introduced in accordance with the EU-ATAD.
Some 100 double tax treaties are in place. Withholding tax can be reduced at source to treaty rates or under the EU-Parent-Subsidiary Directive, if formal requirements are met.
Level of attention paid by Tax Authority:
VAT and other indirect taxes
The harmonized EU-VAT-system applies. The general rate for the sale of goods and services is 20%. Reduced rates of 10% or 13% apply, for example, for agricultural products, real estate rentals with a residential purpose, entertainment, and art. Many exemptions are in place (e.g. exports, interest, insurance premiums, sale of real estate). Entrepreneurs with annual net sales not exceeding EUR 35,000 are exempt from VAT obligations. Non-residents trading in Austria (B2C) are subject to registration immediately, unless they apply the OSS system (central VAT compliance in their EU-home country). Monthly/quarterly returns are filed electronically, and annual returns must be completed by June 30 of the following year. Companies represented by a tax advisor can have the deadline extended substantially.
Excise for certain alcoholic drinks (e.g. wine, beer), natural gas, oil, coal, etc., in line with the EU system.
| VAT options in Austria |
Applicable / limits |
| Distance selling |
As of 1 July 2021, the OSS system is applicable |
| Call-off stock |
 |
| VAT group registration |
|
| Cash accounting - yearly amount in EUR (approx.)* |
EUR 700,000/year
*Not applicable for corporate enterprises |
| Import VAT deferment |
|
| Local reverse charge |
Gas, electricity, heating, emission quotas, cell phones, game consoles, construction services, scrap, auction (foreclosure) of immovable property. |
| Option for taxation |
| - letting of real estate |
|
| - supply of used real estate |
|
| VAT registration threshold* |
EUR 35,000/year
*VAT exemption for domestic small businesses |
Personal income tax / Social security system
According to the domestic tax law, individuals are deemed to be tax resident in Austria if they have their residence or habitual abode in Austria. In this case, the individual's global income is subject to Austrian income tax. Other individuals are subject to tax on income from their Austrian sources.
The term income is specified in the Income Tax Act. Tax rates are progressive from 0% (for yearly income up to EUR 12,816) to 55% (for yearly income exceeding EUR 1,000,000). Certain allowances are available depending on the taxpayer’s family status. Income tax on wages is withheld and directly paid to the tax office by the employer.
Investment income (e.g. interest, dividends, capital gains from investments) is generally subject to a separate tax rate of 27.5%. Capital gains from real estate are subject to a tax rate of 30%.
Certain private expenses are deductible under various conditions (e.g. donations to charities, churches, tax advisory fees, tax losses carried forward).
Partnerships are not subject to income tax themselves. Their profit is subject to either income tax or corporate income tax at the level of the partners.
A compulsory public social security system is in place in Austria.
Social security contributions for employees are partly borne by the employee and partly by the employer. The base is the gross salary and benefits. A maximum contribution base of EUR 84,840 per year for 2024 applies. Social security contributions amount to 39.05% (18.07% employee and 20.98% employer). Additionally, employers are obliged to pay other payroll-related costs amounting to approximately 8.6%.
For self-employed persons, the same maximum contribution base is used (EUR 84,840 per year for 2024).
Social security contributions amount to 26.83%. This insurance covers health insurance, pension insurance and accident insurance. For the first 3 years, lower contribution bases are applicable.
No social security contributions are due for income not exceeding EUR 518.44 per month.
Wage related taxes
in Austria |
Minimum wage*
|
Average wage
in private sector |
| |
in EUR |
|
in EUR |
|
| |
2,301 |
|
4,753 |
** |
| Total wage cost |
2,979 |
129.50% |
6,155 |
129.50% |
| Employer's social security and other contributions*** |
678.66 |
29.50% |
1402 |
29.50% |
| Gross salary**** |
2,301 |
100.00% |
4,753 |
100.00% |
| Personal income tax* |
90.08 |
3.92% |
648.17 |
13.64% |
| Employees' contributions |
367.59 |
15.98% |
852.09 |
17.93% |
| Net salary |
1,843 |
80.11% |
3,253 |
68.44% |
* example - employee in the retail business in Austria, 1st professional year
** Average monthly salary of full time employed persons in Austria in 2021 (yearly renumeration divided by 12 months)
*** In addition to social security contribution to family equalization fund, surcharge, severance payment and municipal taxes are included here
**** Monthly gross salary (yearly renumeration divided by 12 months)