AUSTRIA Law and Practice Contributed by: Clemens Philipp Schindler and Katharina Schindler, Schindler Attorneys
1. Tax 1.1 Tax Regimes Austrian Income Tax
is often a withholding tax; no additional income tax is levied over and above the amount of tax withheld or the respective 27.5%. There is also a 30% tax rate for capital gains from real estate. For property tax, each municipality levies an annual tax on Austrian real estate, which is deductible from rental income. Property tax is based on the unit value ( Einheitswert ), which is generally significantly below market value and is decided upon by local authorities. Generally, the tax rate varies between 0.1% and 0.2% annually. Austrian Corporate Income Tax Corporations that have their place of (effective) man - agement and/or their legal seat ( Sitz ) in Austria are subject to corporate income tax ( Körperschaftsteuer ) in Austria on their worldwide income (unlimited corpo - rate income tax liability). Corporations that have nei - ther their place of (effective) management nor their legal seat in Austria are subject to corporate income tax only on income from certain Austrian sources (limited corporate income tax liability). Partnerships are not subject to corporate income tax, but the part - ners are individually subject to income tax. Corporate income tax is levied on a corporation’s income after the deduction of any losses or allowances. The cor - porate income tax rate is 23% for the fiscal year 2025. Gift and Inheritance Taxation Austria has not levied inheritance or gift tax since 2008. There is also no wealth tax in Austria. Although there is no gift tax in Austria, there is a spe - cial notification obligation for gifts in cash, receivables, shares in corporations, participations in partnerships, businesses, movable tangible assets and intangibles if the donor and/or the donee have a domicile, their habitual abode, their legal seat or their place of (effec - tive) management in Austria. The gift must be notified within three months from the donation; after that, a curing period of only one year exists. Foundation Transfer Tax Certain gratuitous transfers of assets to private foun - dations and comparable legal structures are subject to foundation transfer tax ( Stiftungseingangssteuer ), pursuant to the Austrian Foundation Transfer Tax Act
Individuals who have a permanent domicile ( Wohnsitz ) and/or their habitual abode ( gewöhnlicher Aufenthalt ) in Austria are subject to income tax ( Einkommensteu- er ) in Austria on their worldwide income (unlimited income tax liability). If only a holiday home (secondary residence) in Austria is maintained, a journal regarding the days spent in the Austrian home must be kept (maximum of 70 days), in order to avoid unlimited tax liability in Austria. This exemption requires that the centre of vital interest has been abroad for the past five years. Individuals who have neither a permanent domicile nor their habitual abode in Austria are subject to income tax only on income from certain Austrian sources (lim - ited income tax liability). Income from the following sources is subject to income tax, as is other income: • agriculture and forestry; • self-employed work; • trade and craft activities; • employment; In Austria, there are progressive rates of income tax, up to 55%, although the top rate applies only to very high income (above EUR1 million per year) and is lim - ited in duration. The level of income tax depends on the taxable income received in a calendar year, which is the same as the business year and comprises a period of 12 months. Any operational losses may be deducted. There are provisions by which losses can be carried forward. An individual may deduct spe - cial expenses, such as certain charitable donations, the costs of tax advice and extraordinary expenses, including medical costs, up to a certain amount. There are also tax reliefs for children. • capital assets; and • rents and leases. A special tax regime applies to income from capital assets, which is subject to a tax rate of 27.5%, which
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