Taxation in Vienna, Austria
What are the tax rates in Vienna, Austria? How are corporations taxed? Here’s Teleports overview of personal, corporate and other taxation topics in Vienna, Austria.
Personal taxation in Vienna
Effective personal income tax rate
| Annual income | $25,000 | $40,000 | $80,000 | $125,000 | $200,000 |
|---|---|---|---|---|---|
| Rate | 19% | 28% | 37% | 42% | 45% |
Teleport city rankings for personal income tax
Personal taxation puts Vienna in position 256 of all Teleport Cities.
Stamp duty
Stamp duty is levied at a rate ranging from 0.8% to 2% on various transactions (e.g. the assignment of receivables, rent and lease contracts) if the transactions are evidenced in a stamp duty relevant deed in Austria. Loan/credit contracts are not subject to stamp duty (nor are securities for such loans).
Inheritance/estate tax
No, but there is a statutory notification requirement for gifts. Transfers of real estate are subject to an acquisition tax of 3.5% of the consideration (2% for transfers of agricultural and forestry land between close family members), with the fair market value being the minimum (plus a 1.1% registration fee with the land register). If there is no consideration, the real estate transfer tax and the registration fee generally are based on the fair market value of the real estate.
Basis
Austrian resident individuals are taxed on their worldwide income; nonresidents are taxed only on Austrian-source income.
Residence
An individual is resident if he/she is domiciled or has a habitual abode in Austria. A habitual abode is presumed if the individual stays in Austria for more than six months.
Filing status
Each taxpayer must file a return; joint filing is not permitted.
Social security
Employed and self-employed individuals must make social security contributions in an amount determined based on the individual's salary or income from self-employment.
Other
A flight tax is levied on all passengers departing from an airport within Austria. The tax ranges from EUR 7 to EUR 35, depending on the distance flown.
Filing and payment
VAT returns are filed electronically on a monthly/quarterly basis. Annual returns must be filed electronically by 30 June of the year following the tax year. Filing deadlines may be extended if the entrepreneur is represented by a tax advisor.
Deductions and allowances
Deductions from income are available for various losses, special and exceptional expenses and disabled individuals, and to farm and forestry workers. Allowances based on a taxpayer's personal circumstances are replaced by tax credits (for sole earners, sole educators and employees).
Registration
Austrian entrepreneurs whose annual turnover exceeds EUR 30,000 must register for VAT purposes.
Rates
The standard rate is 20%. A lower rate of 13% (introduced as from 1 January 2016) applies to—among others—accommodations (as from 1 May 2016) and cultural services (as from 1 May 2016); a 10% rate generally applies to foodstuffs, pharmaceuticals, agricultural products, rent for residential purposes and entertainment. Banking transactions are exempt, and a zero rate applies to exports.
Taxable income
Taxable income is the sum of income from all sources, including income from employment, the carrying on of a business or profession and income from investments.
Capital gains
Capital gains relating to investments and real estate are subject to a 27.5% capital gains tax. The alienation of participations of less than 1% in a corporation or participations in an investment fund acquired before 1 January 2011, bonds or
Taxable transactions
VAT is levied on the sale of goods and the provision of services.
Penalties
Penalties apply for failure to comply. Value added tax:
Corporate taxation in Vienna
Teleport city rankings for corporate income tax
Corporate taxation puts Vienna in position 219 of all Teleport Cities.
Basis
Residents are taxed on worldwide income; nonresidents are taxed only on Austrian-source income. Branches are taxed in the same way as subsidiaries.
Taxation of dividends
Dividends received from an Austrian resident company are tax exempt. Portfolio dividends (i.e. where there is a participation of less than 10%) received from a company listed in the EU parent-subsidiary directive, or a nonresident company comparable to an Austrian company that is resident outside the EU in a case where there is a broad exchange of information clause in a tax treaty between Austria and the nonresident’s country, are exempt from corporate tax (domestic/EU/non-EU portfolio dividend exemption).
Residence
A corporation is resident if it is incorporated in Austria or managed and controlled in Austria.
Losses
Losses may be carried forward indefinitely, but generally may be offset against only 75% of the profits of a given year. The carryback of losses is not permitted.
Incentives
Various incentive programs are available, such as a 102% cash premium on certain R&D expenses.
Alternative minimum tax
There is an annual minimum corporate income tax of EUR 1,750 for a limited liability company and EUR 3,500 for a joint stock company.
Foreign tax credit
Foreign tax paid may be credited against Austrian tax, but the credit is limited to the amount of Austrian tax payable on the foreign income.
Taxable income
Corporation tax is imposed on a company’s profits, which consist of business/trading income, passive income and capital gains. Normal business expenses may be deducted in computing taxable income. Interest on debts obtained for the acquisition of a participation is not deductible if the participation is acquired within a group of companies. Interest and royalties paid to intragroup companies that are subject to an (effective) tax rate below 10% are not deductible.
Holding company regime
See under "Taxation of dividends" and "Participation exemption."
Capital gains
Capital gains generally are taxed at the same rate as ordinary income. Under the international participation exemption, gains from the sale of a participation in a nonresident company are exempt unless the resident company has exercised an option to have capital gains treated as taxable income.
Participation exemption
Intercompany dividends are exempt under the domestic, EU/non-EU portfolio dividend and international participation exemptions (see under "Taxation of dividends").
Other taxes on corporations
Stamp duty
Stamp duty is levied at a rate ranging from 0.8% to 2% on various transactions (e.g. the assignment of receivables, rent and lease contracts) if the transaction is evidenced in a stamp duty relevant deed in Austria. Loan/credit contracts no longer are subject to stamp duty.
Social security
The employer is required to make pay-related social insurance contributions. The employer's contribution generally amounts to 21.48% of an employee's salary. The employee's corresponding contribution of 18.127% must be withheld by the employer and remitted to the social insurance agencies.
Other
Austrian banks and foreign banks with an Austrian branch are subject to a banking tax based on the balance sheet total reduced by equity and secured contributions. The banking tax is 0.09% to 0.11% of the tax base, as well as a surcharge of 45%.
Transfer tax
Transfers of real estate are subject to an acquisition tax of 3.5% of the consideration (plus a 1.1% registration fee with the land register). If there is no consideration, the real estate transfer tax and registration fee usually are based on the fair market value. For certain privileged transactions (e.g. reorganizations or transfers of at least 95% of the shares in a company holding Austrian real estate), a real estate transfer tax of 0.5% and the registration fee are based on the lower of (i) three times the assessed value of the land plus the value of the building, (ii) standardized values provided by the Ministry of Finance or (iii) the fair market value.
Capital duty
As from 1 January 2016, the capital tax of 1% no longer is levied.
Real property tax
Municipalities impose an annual real estate tax of up to 0.2% on up to five times the assessed value of property.
Payroll tax
Municipalities levy a general payroll tax of 3% on total salaries and wages paid monthly by permanent establishments based in Austria. Further payroll-related taxes between 6.39% and 6.89% also have to be paid.
Compliance for corporations
Consolidated returns
Companies may form a consolidated group in Austria. To be eligible to file a consolidated return, a parent company must hold more than 50% in the affiliated company. Nonresident companies resident in the EU or in countries with broad mutual assistance agreements with Austria also may participate in a tax group, and their losses may be used in Austria. However, foreign losses of nonresident companies are subject to a recapture rule if the nonresident leaves the Austrian tax group, changes its business significantly compared to the year in which the losses were incurred or subsequently is liquidated. An annual corporate income tax return must be filed for each member of the group subject to unlimited tax liability in Austria, as well as for the head of the group.
Penalties
Penalties apply for failure to comply.
Rulings
Taxpayers may request a nonbinding ruling on the tax consequences of a proposed transaction, and a binding ruling on issues relating to restructurings, tax groups and transfer pricing. For a binding ruling, the taxpayer will be charged a fee of up to EUR 20,000 by the tax authorities.
Tax year
The tax accounting period generally may not exceed 12 months.
Filing requirements
Austria operates a self-assessment regime. Advance payments of corporate tax are required in four installments. The tax return must be filed electronically by 30 June of the year following the tax year. Filing deadlines may be extended if the corporation is represented by a tax advisor.
Other taxation in Vienna
Anti-avoidance rules
Other
Under the statutory general anti-avoidance rule, the tax authorities can make adjustments if there has been an abuse of legal form and methods to achieve a tax benefit.
Thin capitalization
There are no specific thin capitalization rules, but, in accordance with case law, interest may be reclassified as a dividend in certain situations. The tax authorities usually accept a debt-to-equity ratio of 4:1 in tax audits, although this is not considered a safe harbor.
Investment basics
Foreign exchange control
No restrictions are imposed on the import or export of capital. Repatriation payments may be made in any currency. Both residents and nonresidents may hold bank accounts in any currency.
Accounting principles/financial statements
UGB (Austrian Commercial Code), IAS/IFRS. Financial statements must be prepared annually.
Principal business entities
These are the public/private limited liability company, partnership, sole proprietorship and branch of a foreign corporation.
Withholding tax
Dividends
Dividends paid to another Austrian company are exempt. Dividends paid to a nonresident company are subject to a 27.5% withholding tax (increased from 25% as from 1 January 2016),
Technical service fees
Fees for technical services are subject to a 20% withholding tax, unless the rate is reduced or the payments are exempt under a tax treaty.
Interest
No withholding tax is levied on loan interest paid to a nonresident company. However, certain publicly issued corporate bonds may trigger withholding tax. Payments made to a nonresident silent partner in an Austrian company are subject to 27.5% withholding tax (increased from 25% as from 1 January 2016), unless the rate is reduced or the payments are exempt under a tax treaty.
Royalties
Royalties are subject to a 20% withholding tax, but the rate may be reduced or the payments may be exempt under a tax treaty or the EU interest and royalties directive.
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