The elimination of the capital duty at the beginning of 2016 represents an important step to strengthen the equity basis of Austrian companies. "The abolishment of the capital duty is a further significant step in increasing the attractiveness of Austria as a business location. Starting on January 1, 2016, contributions of capital to strengthen a company’s equity will no longer be taxed. Previous competitive disadvantages of the Austrian business location compared to other European countries such as the Netherlands which were very attractive up until now for tax reasons will be compensated for thanks to this measure”, says Robert Gulla, Managing Director of Lukoil International GmbH.
The costs arising from the capital duty, especially for internal Group restructuring measures, were not insignificant. Up until now contributions of capital were generally subject to a capital duty of one percent. The elimination of this tax facilitates the process of equity capital financing.
The capital duty represents a capital transaction tax on the initial equity investment as well as capital increases by Austrian limited liability companies and “hidden” corporations (GmbH & Co KG). In addition, this tax is also imposed on grants, debt waivers, other disclosed or hidden capital contributions as well as profit-related borrowings (e.g. profit participation loans and participation