Corporate Taxation System in Austria

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The government of Austria levies tax on its taxable citizens as well as companies. Tax is an important component of the country’s economy and revenue generated from tax plays a huge role in the provision of necessary social facilities and services in the country. In Austria, income tax is levied on people who are considered to be residents. If you have been a resident in Austria for less than six months, you will be charged based on the income you earn in the country only. However, if you have been residing in the country for more than six months, then all your earnings including those made outside the country are liable to be taxed. Having said this, it should also be included that income tax is levied at a proportional rate based on your earnings which implies that the higher the income you make, the higher your tax will be.

In this article, we talk about some of the types of tax levied by the Austrian government.

Business Taxation

Taxes levied on business establishments on Austria include corporate income tax, social security tax, value-added tax, estate tax, custom and excise duties. The government drastically reduced the rate of corporate taxes a few years ago as part of plans to make the country a convenient place for investment. This has ensured that the country ranks among countries with the lowest business taxes on the world.


Profits paid to an alien beneficiary are liable to a 27.5% retention charge, except if the rate is diminished under an expense bargain. Under Austrian guidelines actualizing the EU parent-backup mandate, no charge is forced where the profits are paid to an EU parent organization falling under article 2 of the mandate and the parent holds at any rate 10% of the payer for over one year.

Value Added Tax

Value Added Tax is exacted at each phase of the generation and appropriation chain. Austria demands VAT on all products and enterprises, with a couple of exemptions, including air and ocean travel; organizations with a yearly assessable turnover that does not surpass EUR 30,000; banking exchanges and fares.

Austrian businesses with yearly turnover surpassing EUR 30,000 must enlist for VAT purposes. Non-residents who make assessable supplies of merchandise or administrations in Austria additionally are required to enroll paying VAT on their turnover.

In Austria, the typical VAT rate is 20%. Most of the organizations in Austria pay this rate as the VAT. However, a decreased rate of 13% applies to the clearance of products and enterprises in regards to creatures and pet nourishment; plants and seeds; wood; convenience; settlement and related administrations in schools, youth centers. A diminished rate of 10% applies to foodstuffs; pharmaceuticals; horticultural items; rents for private purposes; amusement; and open utilities apart from power. Certain provisions are zero-appraised and some are absolved.

Environmental Tax

Vehicles plying Austria’s highways are mandated to pay a fee known as the toll tax. This is usually paid for by buying toll stickers. The stickers generally have a one-year validity period and the cost differs from one vehicle to the other. Trucks and haulage vehicles are typically charged on a per kilometer basis.