Austria reduces corporate tax on profits

Effective 1 January 2023, Austria has reduced the corporate tax on profits to 24%. Moreover, the Alpine Republic promotes the activities of companies with a 10% investment allowance, which even rises to 15% in the case of ecological investments. The tax assessment base (maximum amount for which the investment allowance can be claimed) equals € 1 million per company and fiscal year. Furthermore, companies can also claim a 14% research tax credit for research and development expenditures.

Austria will do even more next year. In 2024 the corporate tax rate will once again be decreased, this time to 23%. Accordingly, the average taxation of companies is expected to be close to 20% in the future.

The country is also becoming more attractive for employees from a tax standpoint. Bracket creep, known as the so-called “cold progression,” was abolished as of 2023. This involved hidden tax increases by not adjusting tax brackets to reflect price increases. Eliminating this cold progress is a response to the currently high inflation rate, thus serving to strengthen the purchasing power of consumers.

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