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Austria / Austria


Location and infrastructure

Austria is a federal republic and is located in Central Europe. It is bordered by the Czech Republic and Germany to the north, Hungary and Slovakia to the east, Slovenia and Italy to the south, and Switzerland and Liechtenstein to the west.

With its efficient traffic system, a secure network of energy suppliers and a state-of-the-art telecom system, Austria's infrastructure is more than just competitive. 


Austria's population estimate in April 2011 was 8,414,638. The population of the capital, Vienna, exceeds 1.7 million (2.2 million including the suburbs), representing about a quarter of the country's population.  


German is Austria's official language and is spoken natively by 88.6% of the population, followed by Bosnian/Croatian/Montenegrin/Serbian (4.2%), Turkish (2.3%), Hungarian (0.5%) and Polish (0.5%).


The local currency is the Euro (EUR).

Tax system

The Austrian corporation tax rate is set uniformly at 25% of the taxable income or, in the case of limited liability, at 25% of the taxable income earned within Austria. Corporate income tax is assessed on an annual basis. However, quarterly advance payments have to be made.

Companies incurring a tax loss or earning small profits must pay a minimum tax of EUR 1,750, EUR 3,500 or EUR 5,452 depending on the legal status of the company and the industry. Non-resident companies are not subject to a minimum tax. Minimum tax may be credited against corporate tax payable in the following years.

Taxation of dividends – Dividends received by (1) an Austrian resident company, a foreign company listed in the EC parent-subsidiary directive or a foreign company comparable to an Austrian company resident in certain EEA countries are exempt from corporate tax (domestic/EC/EEA participation exemption). 

Dividends received from a foreign company that does not fulfill the above criteria are tax exempt if the following criteria are fulfilled: the foreign company is a company comparable to an Austrian company, the parent company holds directly or indirectly at least 10% of the equity capital of the subsidiary and the minimum 10% shareholding is held continuously for at least 1 year.

Capital gains are generally taxed at the same rate as ordinary income.

However, under the international participation exemption, gains from the sale of a participation in a nonresident company are tax exempt unless the resident company has exercised an option to have capital gains treated as taxable income.

Losses – Losses may be carried forward indefinitely. The carryback of losses is not permitted.

Withholding tax:

Dividends paid to another Austrian company are exempt. Dividends paid to nonresident companies are subject to a 25% withholding tax unless the rate is reduced under an applicable tax treaty or exempt under the EC parent-subsidiary directive.

No withholding tax is levied on interest unless the loan is secured against Austrian real estate or various other Austrian rights (the rate may be reduced or exempt under an applicable tax treaty).

Royalties are subject to a 20% withholding tax, but may be reduced or exempt under an applicable tax treaty or the EC interest and royalties directive.

Branch remittance tax is not applicable.

Other taxes on corporations:

Capital tax of 1% is levied on compulsory shareholder contributions and on voluntary direct and hidden capital contributions to Austrian corporations if effected by the direct shareholder.

Stamp duty is levied at a rate ranging from 0.8% to 1.5% on mortgages and loans, as well as on various other transactions (e.g. assignment of receivables, rent and lease contracts).

Transfer tax – Transfers of real estate are subject to an acquisition tax of 3.5% (plus a 1% registration fee).

Austria’s standard Value Added Tax (VAT) is 20%.

Double tax treaties

In order to avoid double taxation, Austria has concluded double tax treaties (DTTs) with more than 70 countries in the world. In many instances, depending on the rules of each double tax treaty, Austria may be obliged to grant relief from its source taxation either fully or partially.

The following countries are among those which have double-tax treaties with Austria, although not all have been ratified at the time of writing:

  • Azerbaijan 
  • Bahrain 
  • Barbados 
  • Belarus 
  • Belgium
  • Belize 
  • Bosnia & Herzegovina 
  • Brazil 
  • Bulgaria 
  • Canada 
  • China 
  • Croatia 
  • Cuba 
  • Cyprus 
  • Czech Republic 
  • Denmark 
  • Egypt 
  • Estonia 
  • Finland 
  • France 
  • Georgia 
  • Germany 
  • Greece 
  • Hong Kong 
  • Hungary 
  • India 
  • Indonesia 
  • Iran 
  • Ireland 
  • Israel 
  • Italy 
  • Japan 
  • Kazakhstan 
  • Korea 
  • Kuwait 
  • Kyrgyzstan 
  • Latvia 
  • Liechtenstein 
  • Lithuania 
  • Luxembourg 
  • Macedonia 
  • Malaysia 
  • Malta 
  • Mexico 
  • Moldova 
  • Mongolia 
  • Morocco 
  • Nepal 
  • Netherlands 
  • New Zealand 
  • Norway 
  • Pakistan 
  • Philippines 
  • Poland 
  • Portugal 
  • Romania 
  • Russia 
  • San Marino 
  • Saudi Arabia 
  • Serbia 
  • Singapore 
  • Slovakia 
  • Slovenia 
  • South Africa 
  • Spain 
  • Sweden 
  • Switzerland 
  • Tajikistan 
  • Thailand 
  • Tunisia 
  • Turkey 
  • Turkmenistan 
  • Ukraine 
  • United Arab Emirates
  • United Kingdom 
  • United States 
  • Uzbekistan 
  • Venezuela 
  • Vietnam

Legal system

The Austrian legal system is based on Roman law and is structured in hierarchical layers. The General Civil Code – Allgemeine Bürgerliche Gesetzbuch (ABGB)  – is one of the world's oldest codes of civil law. 

With entry to the EU on 1.1.1995, Austria adopted the EU legal framework. Austria is also a member of numerous international legal conventions such as the New York Arbitration Agreement of 1958 and the 1980 Vienna Convention on Contracts (international UN purchasing law).


The Austrian banking system is a so-called universal banking system. The universal bank model offers significant potential for synergies and it allows for a high degree of risk mitigation as well as for flexible adaptation to changes in the financial environment. 

For historical reasons, Austrian banks are organized in trade associations according to sectors. The sectored structure is still in place although there are only few differences in the business models of individual banks nowadays. The sector of joint stock banks, housing construction banks and specialized credit institutions as well as the sector of mortgage banks are single-tier. Savings banks and Volksbanken have a two-tier structure and Raiffeisen banks reveal a three-tier structure.

Types Of Companies

Austrian company Law provides for different types of companies, tailored to the specific needs in tax and liability. Basically, there are corporate and non-corporate legal forms.


  • Company with limited liability (GmbH)
  • Stock corporation (AG)
  • Societas Europea (SE)

Non-corporate forms

  • General partnership (OG)
  • Limited partnership (KG)
  • Dormant partnership (stG)
  • Civil law partnership (GesbR)

The company with limited liability (GmbH) is the most widely used form.