AUSTRIA Law and Practice Contributed by: Clemens Philipp Schindler, Schindler Attorneys
corporations or interests in partnerships are trans - ferred to a single acquirer or an acquirer group (share consolidation rule). It should be noted that significant changes to the Aus - trian RETT regime have applied since 1 July 2025, particularly with regard to share deals. In addition to the share consolidation rule described above, RETT is also triggered where at least 75% of the interests in a partnership’s assets or the shares in a company are transferred to new shareholders within a period of seven years (so-called change-in-shareholder-struc - ture rule). For share deals completed before 1 July 2025, this rule applied only where at least 95% of the interests were transferred within five years and was limited to partnerships. An acquirer group exists if the acquirers are grouped together for economic purposes under uniform man - agement or are, by virtue of shareholdings or other - wise, directly or indirectly under the controlling influ - ence of a single person. Persons who exercise such uniform management or controlling influence are also considered part of the acquirer group. In addition, under the current Austrian RETT regime, the scope of the share acquisition or consolidation test extends to include indirect share transfers. This means, for example, that acquiring a parent company whose subsidiary holds Austrian real estate may trig - ger RETT if at least 75% of the shares in the parent company (which itself does not own real estate) are transferred. However, intra-group restructurings are exempt under the Austrian Reorganisation Tax Act. Consequently, the RETT rate differs depending on whether real estate is acquired directly or shares in corporations or partnerships that directly hold real estate are acquired, as follows. • For the direct acquisition of real estate: up to 3.5% of the purchase price (standard rate). • For the acquisition of shares in corporations or interests in partnerships that hold real estate: 0.5% of the value of the real estate. • If Austrian real estate is transferred in the course of a reorganisation under the Austrian Reorganisa -
tion Tax Act, the RETT will likewise be 0.5% of the value of the real estate. • However, under the current Austrian RETT regime there is a higher tax rate if the entity involved is a so-called real estate entity ( Immobiliengesellschaf- ten ). In the case of share transfers, reorganisations or changes in shareholders, RETT is now levied at 3.5% of the fair market value of the real estate (resulting in a higher tax base), rather than 0.5% of the real estate value as previously applied. For other corporations or partnerships that hold real estate but do not qualify as real estate entities, the RETT rate remains at 0.5%. In respect of capital assets subject to capital gains tax, a step up to the fair market value is granted upon the establishment of the right of taxation in Austria – ie, the relocation to Austria. Special planning tools are not required in this respect but it is advisable to keep records regarding the fair market value at the time of relocation. Additional income tax benefits may be granted to certain groups of persons whose relocation to Austria is in the public interest, provided there is a timely application. However, gifting an asset to a private foundation does not lead to a step-up. In the case of shares in a corpo - ration, the hidden reserves from a sale may be trans- ferred to a reserve and thus taxation may be deferred by the private foundation. Other opportunities for income tax planning may involve the choice of the appropriate holding vehicle – ie, where dividends and capital gains from portfo - lio or strategic participations are expected, or where certain interest and debt offsetting arrangements are implemented, holding such participations through an Austrian corporation (rather than directly) may reduce the overall effective tax burden. The principal risks and limitations of (particularly more aggressive) tax planning structures arise from the Austrian anti-avoidance and general anti-abuse provisions. The Austrian tax authorities place par - ticular emphasis on arrangements lacking sufficient economic substance, and assess structures based on their actual economic substance. For example, foreign trusts and comparable structures may be
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