Taxation in Austria

Tax system

All companies registered in Austria are subject to a standard tax rate of 25% of their total profits. However, if a certain number of conditions are met, exemption from such taxation on dividend income is allowed. Therefore, with a competent approach to doing business, you can significantly reduce the cost of paying taxes. Tax incentives include the following:

• The paying company has been the owner of at least ten percent of the foreign company for more than 1 year.
• The form of the foreign subsidiary is comparable to the permissible forms in the territory of Austrian jurisdiction.
• The activity of the foreign subsidiary is active, and it is not registered in the territory of low-tax jurisdictions (tax rate is not less than 15%). In this case, only one of these conditions is allowed.

Separate rules also exist for income tax at source. The following should be noted here:

• The standard rate is 25%.
• When paying dividends to EU residents, this indicator is zero.
• If the recipient of dividends is not a resident of the EU, but Austria has signed an agreement on the avoidance of double taxation with his state, the rate can range from 0 to 15%.

Similar rules apply when paying royalties:

• Standard – 20%.
• For EU residents – 0%.

Austria's Corporate Law