Austria is a European country, one of the most thriving economies in the world. Relatively low corporate income tax, the opportunity to obtain an Austrian residence permit, and a favourable investment climate make Austria attractive for business registration. Austrian companies are required to maintain accounting records, file financial statements with the Austrian Business Register, audit accounts of medium-sized and large companies, and submit tax returns to the Tax Authority. Large public companies are also required to publish financial statements and the auditor’s report in the official gazette of the Wiener Zeitung.
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In Austria, Section 245a of the Austrian Commercial Code, 2015 (Unternehmensgesetzbuch - UGB) sets out the requirements for preparation of financial statements, including the applicable accounting standards and financial reporting thresholds, which are in line with European Commission Regulation (EC) No. 1606/2002.
Every company is required by law to maintain proper accounting records sufficient to:
The following types of business entities are required to submit financial statements:
Annual financial statements must comply with the local accounting standards (Austrian GAAP).
Financial statements must be in the German language, and accounting items must be presented in euros (EUR).
The financial year begins on 1 January and ends on 31 December of each year.
In accordance with tax legislation, a company is obliged to keep financial statements and tax returns, accounting books, underlying documentation and copy of business correspondence for 7 years after the end of the reporting period.
According to their legal status, Austrian companies are required to annually publish their financial statements, consisting of a balance sheet, profit and loss statement, comparative figures for the previous reporting period and notes to the financial statements.
The company’s managing directors are required to prepare financial statements within the first five months of the new financial year.
The annual general meeting must approve financial statements within the first eight months of the new financial year.
Financial statements of a company must be submitted to the register no later than nine months from the balance sheet date.
Failure to comply with the financial statements filing deadline will result in fines.
The court imposes fines ranging from EUR 700 to 3 600 right after the filing deadline (9 months) has expired.
In the case of a small company, the fine will be from EUR 350 to 1 800.
Each next 2 months of the delay in filing, a further fine of EUR 700 will be charged for small companies, but will increase to EUR 2 100 (300%) in the case of medium-sized corporations and to 4 200 EUR (600%) in the case of large corporations. Such fines are imposed on each managing director personally and the corporation itself.
According to the Companies Act, all Austrian companies that have subsidiaries are required to prepare and submit consolidated financial statements and a consolidated management report.
Subsidiaries are companies that are more than 50% owned by another entity. There are cases where a company owned 50% or less is considered to be a subsidiary if it is controlled by the parent company.
A company controls a subsidiary if the following conditions are met:
A company is exempted from the obligation to prepare consolidated financial statements if its parent company prepares consolidated financial statements, and
1) the parent company is governed by the law of a European Union member state or a European Economic Area country and
2) the parent company is not governed by the law of a European Union member state or a European Economic Area country, but the qualifying minority, whose shares reach 5% of the nominal capital, does not request the preparation of financial statements for the subgroup at least six months before the group’s financial year-end.
Consolidated financial statements of all public-interest entities in Austria, which include listed entities, credit institutions and insurance companies, must be prepared in line with EU-approved IFRS. All other entities are free to prepare consolidated financial statements either in line with EU-approved IFRS or Austrian GAAP.
The following entities are required by law to audit their annual financial statements:
1) Small companies are only subject to audit if a supervisory board was formed to oversee their activities.
A company is considered small in its first financial year if at least two of the three below criteria are met for that year.
Medium-sized and large companies are subject to statutory audit.
2) Medium-sized companies are those that exceed at least two of the three criteria listed for small companies, but do not exceed at least two of the three criteria below:
3) Large companies are those that exceed at least two of the three criteria specified in paragraph 2 for medium-sized companies.
The company’s category changes when the company exceeds or falls below two of the three criteria in two consecutive years.
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