AUSTRIA Law and Practice Contributed by: Clemens Philipp Schindler, Schindler Attorneys
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 ( Stiftungseingangssteuergesetz ). As of 1 January 2026, the tax rate has risen from 2.5% to 3.5%, with a higher rate of 25% applying in special cases. Such tax is triggered if the transferor and/or the transferee at the time of transfer have a domicile, their habitual abode, their legal seat or their place of (effective) man - agement in Austria. Certain exemptions apply in cases of transfers mor - tis causa of financial assets within the meaning of Section 27 (3) and (4) of the Austrian Income Tax Act (except for participations in corporations) if income from such financial assets is subject to tax at the flat rate of 27.5%, pursuant to Section 27a(1) of the Aus - trian Income Tax Act. The tax basis is the fair market value of the assets transferred minus any debts, cal - culated at the time of transfer. In addition to Austrian foundations, Liechtenstein foundations are also popular. Pursuant to a special agreement between Austria and Liechtenstein, gratui - tous transfers of assets from a person or entity with unlimited tax liability in Austria to a foundation under the laws of Liechtenstein would be subject to founda - tion transfer tax in Austria at rates between 5% (if all relevant documents of the foundation are disclosed to the Austrian tax authorities) and 10%. Real Estate Transfer Tax Real estate transfer tax (RETT) is typically charged at a flat rate of up to 3.5% of the property value, but generally 2% for a transfer between close relatives in the case of agricultural and forest land. For reorgani - sations, a reduced rate of 0.5% applies. A registration tax of 1.1% also applies if the new owner is registered in the land register (see also 1.3 Income Tax Plan- ning ). Exit Taxation Generally, any circumstances resulting in a restric - tion of Austria’s right to tax certain (financial) assets (or, under certain circumstances, profit potential) may give rise to exit taxation of unrealised capital gains in
Austria. There is no exit tax on other types of assets, such as real estate or art. Special rules apply within the EU and according to certain tax treaties, and there are tax exemptions for assets acquired before 2011. Note that, since 1 July 2026, deferred (non-assessed) exit taxes based on non-assessed income exceeding EUR100,000 are subject to a recurring annual sub - stantiation requirement – ie, the taxpayer must dem - onstrate to the Austrian tax authorities that the assets concerned have not been sold or become subject to another realisation event (eg, by providing a commer - cial register excerpt); non-compliance is treated as a disposal (realisation event). 1.2 Exemptions There are exemptions from the obligation to file a gift notification for gifts (one or several gifts) between close relatives, not exceeding EUR50,000 in total per year. Gifts between third parties trigger a notification if the value of gifts made exceeds EUR15,000 during a period of five years. Gratuitous transfers to private foundations and of real estate are also exempt from the notification obligation. Austrian tax law contains an exemption from RETT for family homes, under which the first 150 sq m of the family home may be transferred free of RETT between living spouses. The same applies for the transfer mor - tis causa to the surviving spouse if the family home served as the principal residence of the spouses (at the time of death). There are also certain exemptions regarding real estate capital gains taxation in case of the sale of a principal residence. 1.3 Income Tax Planning Most importantly, Austria has no inheritance or gift tax (only notification obligations, as mentioned in 1.1 Tax Regimes ), which provides several opportunities for tax-efficient planning of asset transactions between individuals. In order to avoid RETT and land register duties when real estate properties located in Austria are to be transferred, it could be tax-efficient to use corporate entities as property owners, since RETT would only be triggered if at least 75% (or 95% for share deals before 1 July 2025) of the shares in real estate-owning
68 CHAMBERS.COM
Powered by FlippingBook