Taxes for companies in Austria
Austria provides international companies with a stable, transparent and investor-friendly tax system. Attractive tax incentives, a competitive corporation tax rate, and a wide range of funding opportunities make Austria one of the most appealing business locations in Europe – for both new start-ups and the expansion of existing companies.
What advantages does it offer for businesses?
- A single tax on corporate profits at a rate of 23 %
- Tax incentives such as the investment allowance and the 14% research premium significantly reduce the actual tax burden.
- Competitive corporate taxation: according to the BAK Taxation Index 2023, the effective tax burden is 21.2 %, which in some cases is significantly lower than in France (22.9 %), Germany (29.3 %), and the United States (33.4 %).
- More than 90 double taxation agreements (DTAs) prevent double taxation of international income.
Which taxes do companies pay in Austria?
Corporate income tax in Austria Rate and calculation
The corporation tax rate is 23 %.
The taxable profit – whether generated in Austria or abroad – forms the assessment base. Tax is paid quarterly in advance and is finally assessed after submission of the tax return.
Corporate income tax is the only tax on corporate profits in Austria. The minimum amount of corporate income tax is EUR 500 per year, or EUR 125 per calendar quarter. The minimum corporation tax is credited without time limit against corporation tax payable in subsequent years, effectively serving as an advance payment.
Income Tax in Austria Tax liability, rates and allowances
Natural persons resident in Austria are subject to unlimited tax liability and pay tax on their worldwide income.
Persons without residence in Austria are subject to limited tax liability on certain domestic income only.
Income tax is calculated progressively:
- Up to EUR 13,308 tax-free
- Thereafter, graduated tax rates up to 55 %
- Thanks to the abolition of cold progression, tax brackets are adjusted annually.
Value-Added Tax (VAT) in Austria Tax rates, input tax deduction and reporting obligations
The standard tax rate is 20 %, with reduced rates of 10 % or 13 % applying to certain services such as food or accommodation.
Companies charge value-added tax to their customers and pay it to the tax office.
Input tax may be deducted where the requirements are met.
Settlement takes place monthly or quarterly via the advance VAT return (UVA) and the annual return.
Companies may opt for accrual-based or cash-based taxation, depending on their turnover and legal form.
International Tax Aspects
Double Taxation Agreements (DTAs)
Austria has concluded double taxation agreements (DTAsdouble taxation agreements (DTAs ()) with more than 90 countries to ensure that income is not taxed twice – neither in Austria nor abroad. These bilateral agreements regulate which country has the right to tax certain types of income. The DTAs define which country has the right to tax certain types of income, e.g., in the case of:
- Permanent establishments abroad,
- Cross-border dividends or royalty payments,
- Assignments of international specialists.
A certificate of residence (Form ZS-A) is often required for claiming DTA benefits.
Group Taxation
Group taxation allows companies to offset profits and losses within a corporate group for tax purposes.
It is particularly attractive for corporate groups and holding companies because it:
- enables efficient use of losses,
- allows consolidated taxation at the level of the group parent, and
- may also include foreign subsidiaries (under certain conditions).
To qualify, companies must be financially linked by more than 50 %, and a group application and group agreement must be in place. Membership of the group must last for at least three years.
Tax Tips for Companies in Austria
- 01
Tax benefits for start-ups
The Start-up Promotion Act exempts start-ups from certain fees and charges, including court and stamp duties, land acquisition tax and certain payroll taxes.
- 02
Generous deductions
In many cases, Austria allows for more generous depreciation allowances than other countries. Professional tax advice can help make optimal use of expenses to reduce the tax burden.
- 03
Tax benefits for expatriates
In Austria, employers may grant international specialists assigned to Austria (expatriates) a flat-rate allowance for income-related expenses of up to EUR 10,000 per year directly through payroll accounting — without proof of actual costs.
- 04
Immediate write-off of expenses up to EUR 1,000
The value limit for the immediate write-off of "low-value assets" is EUR 1,000 net.
- 05
Profit allowance for sole proprietorships and partnerships
For profits up to EUR 33,000, a basic tax-free allowance of 15 % applies, equivalent to a maximum of EUR 4,950. No investment is required.
If the profit exceeds EUR 33,000, an investment-related profit allowance can be claimed in addition to the basic tax-free allowance.
Up to 13 % of the portion of profit exceeding EUR 33,000 (basic tax-free allowance) may be tax-exempt. The prerequisite is that, in the same calendar year, eligible fixed assets or specific securities are acquired.
- 06
Research premium for companies
Companies that incur expenses for research and development (R&D) can claim a research premium of 14 %.
It can be claimed in the tax assessment and will be credited directly by the tax office – even by companies that do not report a profit. A certificate from the Austrian Research Promotion Agency (FFG) is required to claim the research premium. - 07
How to use the Family Bonus
The Family Bonus Plus is a tax credit that reduces parents’ annual tax burden by up to EUR 2,000 per child per year (for children under 18).
For adult children who are still eligible for family allowance, the bonus amounts to EUR 700 per year.
Public Services and Location Advantages
Tax revenues in Austria finance high-quality public services such as:
- Health care
- Education and research
- Social security
- Modern infrastructure
These factors create a high quality of life, economic stability and an attractive environment for skilled professionals and businesses.
Coordinate taxes in Austria
To effectively manage your taxation in Austria, our servicesour services () can assist you in coordinating all tax-related matters. Contact us now, we will be happy to support you with taxes in Austria and advise you if you want to expand your company to Austria and set up a business hereset up a business here (). For further information on this topic visit our blogour blog ().
Our Services
The ABA makes it easy
All the tax benefits relating to your investment in Austria: We respond to your initial questions relating to corporate taxes in Austria and link you up with the right experts.