Austria-AG

Basic taxes (briefly)

Personal tax 25-55%
Corporate tax (in detail) The corporate tax rate in Austria is 25%. Even if the company does not receive income, there is a minimum tax of € 3.500 for joint-stock companies and € 1.750 for limited liability companies (for newly created - € 500 for the first five years and € 1,000 for the next five years). The minimum tax is credited against future income tax for an indefinite period.
Capital gains tax. Details Capital gains are usually taxed as part of the gains at the standard rate of 25%.
VAT. Details The standard VAT rate is 20%. A reduced rate of 10% applies to foodstuffs, pharmaceuticals, agricultural products, rent, tourist services, public utilities (except electricity) and entertainment. Professional services (such as lawyers and architects) are subject to 20% VAT. Certain supplies are zero-rated and some are exempt.
Other taxes real estate tax, transfer tax, social security contribution
Government fee
Stamp duty Yes

International tax agreement

92: Australia, Albania, Algeria, Argentina , Armenia, Azerbaijan, Barbados, Bahrain, Belarus, Belize, Belgium, Bosnia and Herzegovina, Bulgaria, Brazil, Canada, Chile, China, Croatia, Czech Republic, Cyprus, Cuba, Denmark, Egypt, Estonia, Finland, France, Georgia, Germany, Great Britain, Greece, Hong Kong, Hungary, Iceland, India, Indonesia, Iraq, Iran, Israel, Italy, Japan, Kazakhstan, Kosovo, Kuwait, Kyrgyzstan, Latvia, Libya, Liechtenstein, Lithuania, Luxembourg, Macedonia, Malaysia, Malta, Mexico, Moldova, Mongolia, Montenegro, Morocco, Nepal, Netherlands, New Zealand, Norway, Pakistan, Philippines, Poland, Portugal, Qatar, Republic of Korea, Romania, Russia, San Marino, Saudi Arabia, Serbia, Singapore, Slovakia, Slovenia, South Africa, Spain, Sweden, Switzerland, Syria, Thailand, Tajikistan, Taiwan, Tunisia, Turkey, Turkmenistan, UAE, Ukraine, USA , Uzbekistan, Venezuela, Viet Nam
   
Andorra, Gibraltar, Guernsey, Jersey, Mauritius, Monaco, Saint Vincent and the Grenadines


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TAXATION

Personal Income Tax

Residents are subject to income tax on their worldwide income, while nonresidents on income from Austrian sources.
Income tax is levied at the following rates:
  • 0% on income up to EUR 11,000
  • 25% on income from EUR 11,001 to 18,000
  • 35% on income from EUR 18,001 to 31,000
  • 42% on income from EUR 31,001 to 60,000
  • 48% on income from EUR 60,001 to 90,000
  • 50% of income from EUR 90,001 to 1,000,000
  • 55% on income over EUR 1,000,000

Corporate Income Tax

A company is considered tax resident in Austria if it has its place of effective management in Austria or is incorporated in Austria.
Resident companies pay tax on their worldwide income. Nonresident companies only pay tax on income derived from sources in Austria.
The Austrian corporate tax rate is 25%.
Even if a company does not receive income, there is a minimum tax of EUR 3,500 for joint-stock companies and EUR 1,750 for limited liability companies (for newly created companies – EUR 500 for the first five years and EUR 1,000 for the next five years). The minimum tax is credited against future corporate tax without any time restrictions.
Capital gains are usually taxed as part of profit at the standard corporate tax rate of 25%. Profits from the sale of foreign company shares are exempt from tax if the shareholding is not less than 10% and the ownership period is not less than a year. There are also exemptions for dividends.

Social Security Contributions

Social security contributions in relation to the employee’s remuneration are paid at the following rates:
Employer’s contribution Employee’s contribution Total
Sickness 3.78% 3.87% 7.65%
Unemployment 3% 3% 6%
Pension 12.55% 10.25% 22.8%
Accident 1.2% - 1.2%
Miscellaneous 0.7% 1% 1.7%
Total 21.23% 18.12% 39.35%

Contributions are paid on a maximum salary of 5,370 per month.
In addition, employers pay a Family Burdens Equalisation Levy of 3.9%, a municipal payroll tax at a rate of 3%, a mandatory pension fund contribution at a rate of 1.53%, and a number of others.

Withholding Tax

Dividends paid to foreign companies are subject to withholding tax at the rate of 25%.
Interest paid to foreign companies is not subject to withholding tax unless the loans are secured by Austrian real estate.
Royalties paid to foreign companies are subject to withholding tax at the rate of 20%.
Withholding taxes may be reduced under the relevant double tax treaties and EU Directives.

VAT

The standard VAT rate is 20%. The reduced rates of 10% and 13% apply to certain goods and services.

Property Tax

Local authorities have the right to levy tax on Austrian real estate. The tax base is determined by special rules, the effective tax rates are determined depending on the purpose of use and several other factors.

Property Transfer Tax

This tax is usually levied at the rate of 3.5% on the transfer of ownership of Austrian real estate.
There are exemptions and reliefs.
When registering ownership of real estate, a fee of 1.1% is charged.
Transfer of shares in companies and partnerships owning Austrian real estate may attract a 0.5% tax.

Stamp Duty

Stamp duty applies to a number of transactions for which contracts are signed. The rates vary depending on the transaction.
Capital tax is levied at a rate of 1% on mandatory contributions from shareholders and on voluntary or hidden capital contributions to Austrian companies.

CFC Rules

A controlled foreign company is a foreign company taxed at a low tax rate (less than 50% of Austrian tax), in which an Austrian company owns, directly or indirectly, individually or together with related parties, more than 50% of the capital.
CFC rules have a number of exemptions.
The undistributed profit of a CFC is included in the tax base of the Austrian parent company if this profit arises from tax evasion transactions. The analysis of transactions for these purposes takes into account the functions performed in Austria for the controlled company.

Double Tax Agreements

Austria has exchange of information relationships with 97 jurisdictions through:
  • 92: Australia, Albania, Algeria, Argentina , Armenia, Azerbaijan, Barbados, Bahrain, Belarus, Belize, Belgium, Bosnia and Herzegovina, Bulgaria, Brazil, Canada, Chile, China, Croatia, Czech Republic, Cyprus, Cuba, Denmark, Egypt, Estonia, Finland, France, Georgia, Germany, Great Britain, Greece, Hong Kong, Hungary, Iceland, India, Indonesia, Iraq, Iran, Israel, Italy, Japan, Kazakhstan, Kosovo, Kuwait, Kyrgyzstan, Latvia, Libya, Liechtenstein, Lithuania, Luxembourg, Macedonia, Malaysia, Malta, Mexico, Moldova, Mongolia, Montenegro, Morocco, Nepal, Netherlands, New Zealand, Norway, Pakistan, Philippines, Poland, Portugal, Qatar, Republic of Korea, Romania, Russia, San Marino, Saudi Arabia, Serbia, Singapore, Slovakia, Slovenia, South Africa, Spain, Sweden, Switzerland, Syria, Thailand, Tajikistan, Taiwan, Tunisia, Turkey, Turkmenistan, UAE, Ukraine, USA , Uzbekistan, Venezuela, Viet Nam.
  • 7: Andorra, Gibraltar, Guernsey, Jersey, Mauritius, Monaco, Saint Vincent and the Grenadines.

Foreign exchange control

There are no foreign exchange controls in Austria.

ACCOUNTS

Statutory requirements

Section 245a of the Austrian Commercial Code, 2015 (Unternehmensgesetzbuch – UGB) sets out the requirements for preparation of financial statements, including applicable accounting standards and financial reporting thresholds, which are in line with European Commission Regulation (EC) No. 1606/2002.
The law requires every company to maintain proper accounting records sufficient to:
  • show and explain the company's transactions,
  • disclose, with reasonable accuracy, the current financial position of the company at any given time, and
  • allow the directors to prepare accounts in accordance with the requirements of the said law and in accordance with Austrian GAAP standards.

What companies are required to submit financial statements
The following types of business entities are required to submit financial statements:
  • Limited Liability Company (GmbH);
  • Limited Partnership (GmbH & Co KG);
  • European Company (Societas Europaea);
  • Joint Stock Company (AG);
  • Cooperative;
  • Private Foundation (Privatstiftungen);
  • Branch of a foreign company.

Accounting standards

Annual financial statements must comply with the local accounting standards (Austrian GAAP).
EU-approved IFRS are required for the preparation of consolidated financial statements of all public interest entities in Austria, which include listed entities, credit institutions and insurance companies. All other entities are free to choose the preparation of consolidated financial statements in accordance with EU-approved IFRS or in accordance with Austrian GAAP.

Presentation of financial statements

The financial statements must be in the German language and the accounting items must be presented in euros (EUR).

Financial year

The financial year begins on 1 January and ends on 31 December of each year.

Keeping of financial statements

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 seven years after the end of the reporting period.

Financial statements preparation and submission deadlines

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 AGM must approve the financial statements within the first eight months of the new financial year. The financial statements of the company must be submitted to the register no later than nine months from the balance sheet date.
Failure to comply with this deadline will result in fines. The submitted documents are available for public inspection.
Large public companies are required to publish their financial statements and auditor’s report in the official gazette of Wiener Zeitung.

Consolidated financial statements

According to the Companies Act, all Austrian companies that have subsidiaries are required to prepare and submit consolidated financial statements and consolidated management report.
Subsidiaries are considered to be companies that are more than 50% owned by an Austrian company. There are cases where a subsidiary is considered to be a company that is 50% owned or less than 50% owned if it is controlled by the company. The company controls the subsidiary if the following conditions are met:
  • the company is able to manage the financial and operational policies of the subsidiary;
  • the company has the ability to remove or appoint a majority of the board of directors of the subsidiary;
  • the company has a majority of votes at the board meetings of the subsidiary.

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
  • holds all shares of the Austrian company, or
  • holds at least 90% of the shares of the Austrian company, and the remaining shareholders have agreed to the exemption; or

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.
Categories of companies
(1) Reporting disclosure requirements are less stringent for small companies. A company is considered “small” in its first financial year if at least two of the three below criteria are met for that year.
  • Balance sheet total does not exceed EUR 5,000,000;
  • Turnover does not exceed EUR 10,000,000;
  • Average number of employees does not exceed 50.

(1а) Companies that qualify as micro-companies are not required to prepare notes to accounts if certain additional information is provided under the balance sheet (including the total financial liabilities, advances and loans together with the applied interest rate, provided to the management and the supervisory board, etc.). A micro-company is a company that does not exceed two of the following three criteria:
  • Balance sheet total – EUR 350,000;
  • Turnover – EUR 700,000;
  • Average number of employees – 10.

Investment and holding companies cannot qualify as micro-companies.
(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:
  • Balance sheet total – EUR 20,000,000;
  • Turnover – EUR 40,000,000;
  • Average number of employees – 250.

(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.

AUDIT

Audit

The following entities are legally required to audit their annual financial statements:
  • Public companies;
  • Medium-sized and large limited liability companies;
  • Partnerships where the unlimited partner is a limited liability company;
  • Large associations and private foundations.

Small companies are only subject to audit if a supervisory board was formed to oversee their activities.

Annual Return

As Russian law does not have an equivalent of the Annual Return, we think it appropriate to explain this concept. The Annual Return is a summary of the company’s current structure prepared annually by the company secretary. As a rule, it includes:
  • incorporation information (incorporation date, registered address);
  • information about the directors and their resignations;
  • information about the secretaries and their resignations;
  • information about the share capital, nominal value of shares and number of issued shares;
  • information about shareholders and share transfers.

Tax Returns

Corporate income tax (CIT) return
The tax period is a calendar year. CIT returns are filed electronically before 30 June of the year following the reporting year. Provisional CIT payments are made quarterly, with the final payment at the end of the year.

VAT Return

In many EU countries, including Austria, companies are registered for VAT separately from general tax registration and only when it is made necessary by the activities of the company.
Austrian companies with a taxable turnover exceeding EUR 35,000 must register for VAT.
VAT returns must be submitted quarterly or, if the taxable turnover exceeds EUR 100,000, monthly by the 15th day of the second month following the reporting period. Also, all companies are required to submit an annual consolidated VAT return – by 30 June of the year following the reporting one.
In addition, if a company buys and sells goods and services from/to companies incorporated in other EU countries, it is necessary to register in the INTRASTAT and VIES systems and submit information to the tax office using the prescribed forms.

    Taxes of Austria

    Min. rate for corporate tax 25%
    Capital gains tax Regular rate
    VAT 20%
    Withholding tax 25%/0%/20%
    Exchange control No
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