Corporate Taxation in Austria in 2026: Complete Guide
Austrian corporate taxes: flat 23% CIT for companies, progressive 0-55% for sole proprietors, VAT 20% (0% women's hygiene from 2026), enhanced 20% investment allowance, €500 minimum tax GmbH, comprehensive deductions and incentives.
Corporate Tax Rates by Business Structure
Tax Residency and Rates
Austrian corporate tax residents (registered seat or effective management in Austria) subject to unlimited taxation on worldwide income at 23%. Non-residents taxed only on Austrian-source income. Distinction between company-level taxation (23% CIT) and shareholder-level taxation (27.5% WHT individuals, 23% corporations). Profits taxed at company level regardless of retention or distribution.
Austrian residents: 23% on worldwide income
Non-residents: 23% on Austrian-source income only
Company level: 23% CIT on profits
Shareholder level: 27.5% WHT individuals, 23% corporations
Effective management or registered seat determines residency
GmbH (Limited Liability Company)
Corporate Tax Rate
23%
Flat rate on profits
Minimum Capital
€10,000
€5,000 cash minimum
Minimum Tax
€500/year
€125 quarterly
Most popular form for SMEs
Limited liability for shareholders
Separate legal entity
Dividends taxed 27.5% to individuals
No residency requirements for owners
Einzelunternehmen (Sole Proprietorship)
Tax Rate
0-55%
Progressive personal income tax
Capital Required
None
No minimum
Liability
Unlimited
Personal assets at risk
Taxed as personal income (Einkommensteuer)
No separate legal entity
Unlimited personal liability
Business expense deductions available
Suitable for small businesses and freelancers
Filiale (Branch of Foreign Company)
Tax on Austrian Profits
23%
CIT on local income
Liability
Parent Company
Full parent responsibility
No WHT
On Branch Profits
To parent company
23% CIT on Austrian-source income only
Simplified registration process
Parent company fully liable
No withholding tax on branch profits
Subject to Austrian tax compliance
Partnerships (OG/KG)
Entity Tax
Tax-transparent
Pass-through
Partner Tax
0-55%
Personal income rates
OG Liability
Unlimited
All partners
Tax-transparent entities
Partners taxed at personal income rates
OG: all partners unlimited liability
KG: limited partners have limited liability
Income attributed to partners directly
Corporate Tax Rate Overview 2026
| Business Type | Tax Rate | Key Features |
|---|---|---|
| GmbH / AG (Corporations) | 23% flat CIT | Limited liability, €500 min tax, 27.5% dividend WHT |
| Einzelunternehmen (Sole Proprietor) | 0-55% progressive | Personal income tax, unlimited liability, expense deductions |
| Filiale (Branch) | 23% CIT | Only on Austrian profits, parent liability, no branch WHT |
| OG/KG (Partnerships) | 0-55% at partner level | Tax-transparent, partners taxed individually |
| FlexCo (Flexible Company) | 23% flat CIT | New 2024 form, hybrid GmbH/AG features |
Important: CIT rate reduced from 25% (2022) to 24% (2023) to 23% (2024-2026) as part of eco-social tax reform. Rate remains 23% for 2026.
VAT (Umsatzsteuer) Rates and Rules
Standard and Reduced VAT Rates 2026
Austria VAT system includes standard 20% rate, reduced rates 13% (cultural events, tourism, animal transport, firewood) and 10% (food, books, newspapers, medicines, residential rent, public transport, restaurants). New 0% VAT rate for contraceptives and feminine hygiene products from January 1, 2026 (Budget Accompanying Act 2025). Registration threshold €55,000 annual turnover. Monthly or quarterly VAT returns required depending on business size.
VAT Rate Structure 2026
| VAT Rate | Applies To | Examples |
|---|---|---|
| 20% (standard) | Most goods and services | General commerce, professional services, electronics |
| 13% (reduced) | Tourism, culture, specific goods | Hotel accommodation, cultural events, pet food, firewood |
| 10% (reduced) | Basic necessities | Food, books, newspapers, medicines, residential rent, public transport |
| 0% (new 2026) | Health/reproductive products | Feminine hygiene products, contraceptives |
| 0% (exports) | International transactions | Exports, intra-EU supplies, international transport |
Important: Registration required if turnover exceeds €55,000. Foreign businesses often register from first taxable transaction. Cash register reforms from 2026 raise exemption threshold to €45,000.
Investment Allowance Enhanced 2026
Up from 10% (22% for eco-investments)
Corporate Tax Deductions and Incentives
Investment Allowance (Investitionsfreibetrag)
20% of acquisition/production costs deductible as business expense (November 2025-December 2026). 22% for ecological investments. Additional to normal depreciation. Maximum €1 million investment basis annually. Reduces taxable profit, creating immediate tax savings. Applies to depreciable assets with 4+ year useful life in Austrian businesses.
R&D Tax Credit (Forschungsprämie)
Direct tax credit for research and development expenses. Refundable credit reduces tax liability or provides refund. Project-related R&D expenses eligible. Encourages innovation and technology development. Detailed documentation required for eligible projects and expenses.
Loss Carryforward
Tax losses carried forward indefinitely. Can offset against future positive taxable income. Limited to 75% of annual income utilization. Remaining 25% always taxable. No time limitation on carryforward. No carryback permitted. Loss tracking important for multi-year planning.
Depreciation (AfA - Absetzung für Abnutzung)
Straight-line depreciation method required for tangible and intangible assets. Buildings: 5% rate. Machinery: 25% rate. Specific rates prescribed by law. Depreciation deductible as business expense. Investment allowance additional to regular depreciation.
Withholding Tax and Dividends
Dividend Withholding Tax Rates
Withholding tax (WHT) applies to dividend distributions: 27.5% for individuals and other recipients, 23% for corporate shareholders. Exemptions available under EU Parent-Subsidiary Directive (0% for qualifying EU corporate shareholders). Double taxation treaties can reduce rates. WHT obligation lies with distributing company. Interest to non-resident companies: 0% WHT. No branch withholding tax on profit repatriation to foreign parent.
Individuals/other recipients: 27.5% WHT on dividends
Corporate shareholders: 23% WHT on dividends
EU Parent-Subsidiary: 0% for qualifying cases
Double tax treaties: potential rate reductions
Interest to non-residents: 0% WHT
Branch profits to parent: no WHT
Minimum Corporate Tax
Minimum Tax for Loss-Making Companies
Minimum CIT applies to companies in tax-loss position. For GmbH established after June 30, 2013: €500 annually (€125 per quarter) for first 5 years, €1,000 annually (€250 per quarter) for years 6-10. From 2024: generally €500 annually due to reduced minimum capital from €35,000 to €10,000. Can be carried forward and credited against future CIT. AG (stock corporations) minimum tax higher: €875 quarterly.
GmbH (post-2013): €500 annually (€125 quarterly)
GmbH years 6-10: €1,000 annually (€250 quarterly)
AG (stock corporations): €875 quarterly minimum
Can be carried forward and credited
Applies even in loss-making years
Pillar Two Global Minimum Tax
15% Global Minimum Tax (EU Directive)
Austria's Minimum Tax Act (MinBestG) implements EU Pillar Two global minimum tax framework effective from 2024. Applies to large multinational groups with €750+ million revenue in 2 of last 4 years. Ensures 15% effective tax rate through Income Inclusion Rule (IIR) and Undertaxed Profits Rule (UTPR from 2025). Qualified Domestic Minimum Top-up Tax (QDMTT) precedes IIR/UTPR. Safe harbor provisions available. Complex compliance obligations including Pillar Two returns.
Applies to groups with €750M+ revenue
15% global minimum effective tax rate
IIR and UTPR rules ensure minimum taxation
QDMTT prevents tax base outflow
Safe harbors and transitional rules available
Detailed compliance requirements (GloBE returns)
Employer Social Contributions
Payroll-Related Employer Obligations
Employers pay social security contributions ~21% on top of gross wages: 12.55% pension, 3.78% health, 2.95% unemployment, 1.1% accident insurance. Additional levies: 3.7% Family Burdens Equalization Levy, 3% municipal payroll tax (Vienna: +€2/week/employee public transport levy), 1.53% mandatory employee pension fund, 0.31-0.4% Chamber of Commerce contribution. Maximum assessment base €6,450 monthly.
Social contributions: ~21% on gross wages
Family Equalization Levy: 3.7% of payroll
Municipal payroll tax: 3% of wages
Employee pension fund: 1.53% mandatory
Chamber of Commerce: 0.31-0.4% by province
Corporate Tax Filing and Compliance
Annual Returns and Payment Procedures
Corporate tax returns due June 30 for electronic filing via FinanzOnline (April 30 for paper). Tax year follows calendar year January 1-December 31. Quarterly advance payments required: February 15, May 15, August 15, November 15 based on previous year liability. Late payment interest: 2% above base rate (~5.53% per annum). Penalties for non-compliance start €700 for late financial statement disclosure. Bookkeeping required according to commercial law standards (Maßgeblichkeitsprinzip).
Filing deadline: June 30 (electronic) or April 30 (paper)
Quarterly advance payments on 15th of month
Tax year: January 1 - December 31
Late payment interest: ~5.53% annually
Penalties start at €700 for late compliance
Company Formation and Registration
Setting Up Business in Austria
GmbH registration in Firmenbuch (commercial register) required. Incorporation costs: €1,000-€3,000. Minimum share capital €10,000 (€5,000 cash minimum). Average incorporation time: 8-12 working days. Tax registration: obtain tax ID from Finanzamt, VAT registration if applicable. Social security registration for employees before commencement. Many steps can be completed online through digital reforms. No residency requirements for shareholders.
GmbH minimum capital: €10,000 (€5,000 cash)
Incorporation cost: €1,000-€3,000 typically
Timeline: 8-12 working days average
Tax ID and VAT registration required
Social security registration for employees mandatory
2026 Key Changes and Updates
Corporate Tax Rate Stable at 23%
CIT rate remains 23% for 2026 unchanged from 2024. Reduced from 25% (2022) → 24% (2023) → 23% (2024-2026) as part of eco-social tax reform. No further reductions planned.
Investment Allowance Doubled to 20%
Investitionsfreibetrag temporarily increased from 10% to 20% for November 2025-December 2026. Eco-investments (Öko-IFB) from 15% to 22%. Maximum €1 million investment basis. Aim: stimulate economy and boost investment. Returns to standard 10%/15% from January 2027.
0% VAT on Women's Hygiene Products
New VAT exemption (0% rate) for contraceptives and feminine hygiene products from January 1, 2026. Part of Budget Accompanying Act 2025. Reduces cost burden on essential health products. Aligns Austria with EU trend toward gender equity in taxation.
Cash Register Reforms 2026
Cash register exemption threshold raised to €45,000 (from lower threshold). Digital receipts permitted as optional fulfillment. 15-product-group rule made permanent. Reduces administrative burden for small and seasonal businesses. Effective from 2026.
Minimum GmbH Tax €500 Annual
Following 2024 capital reduction (€35,000 to €10,000), minimum corporation tax generally €500 annually (€125 quarterly) for all GmbH. Simplified structure. FlexCo (flexible company) new legal form introduced 2024 continues.
Pillar Two Compliance Ongoing
Global minimum tax (15%) compliance continues for large multinational groups €750M+ revenue. Safe harbor provisions and transitional rules in effect. GloBE Information Returns required. OECD guidance updates implemented.
Frequently Asked Questions
What is the corporate tax rate in Austria for 2026?
The corporate income tax (Körperschaftsteuer) rate is flat 23% for all corporations including GmbH and AG, unchanged from 2024. This applies to worldwide income for Austrian tax residents and Austrian-source income for non-residents. Rate was reduced from 25% (2022) to 24% (2023) to 23% (2024-2026) as part of eco-social tax reform.
What is the difference between GmbH and Einzelunternehmen taxation?
GmbH (limited liability company) pays flat 23% corporate tax on profits, plus 27.5% withholding tax on dividend distributions to shareholders. Einzelunternehmen (sole proprietorship) is not separately taxed; owner pays progressive personal income tax 0-55% on business profits. GmbH has limited liability and separate legal entity; Einzelunternehmen has unlimited personal liability.
What is the investment allowance (Investitionsfreibetrag) for 2026?
Investment allowance temporarily increased to 20% of acquisition/production costs for November 2025-December 2026 (up from standard 10%). Ecological investments (Öko-IFB): 22% (up from 15%). Maximum €1 million investment basis annually. Deductible as business expense additional to normal depreciation. Returns to 10%/15% from January 2027.
What are VAT rates in Austria for 2026?
Standard VAT (Umsatzsteuer) rate: 20%. Reduced rates: 13% (cultural events, tourism, certain goods) and 10% (food, books, medicines, residential rent, public transport). New from January 1, 2026: 0% VAT on contraceptives and feminine hygiene products. Registration required if annual turnover exceeds €55,000.
What is the minimum tax for GmbH in Austria?
GmbH established after June 30, 2013: €500 annually (€125 quarterly) for first 5 years, €1,000 annually (€250 quarterly) for years 6-10. From 2024, generally €500 annually due to reduced minimum capital requirement. AG (stock corporations): €875 quarterly. Minimum tax applies even in loss-making years and can be carried forward.
How are dividends taxed in Austria?
Company level: 23% CIT on profits regardless of distribution. Shareholder level: 27.5% withholding tax (WHT) for individuals and other recipients, 23% WHT for corporate shareholders. EU Parent-Subsidiary Directive: 0% for qualifying EU corporate shareholders. Double taxation treaties can reduce rates. Dividends not deductible as business expense.
What is a Filiale and how is it taxed?
Filiale is branch of foreign company operating in Austria. Taxed at 23% CIT on Austrian-source income only. Parent company fully liable. Simplified registration compared to subsidiary. No withholding tax on branch profits repatriated to parent company. Must comply with Austrian tax registration and reporting requirements.
When is the corporate tax return due in Austria?
Annual corporate tax return due June 30 for electronic filing via FinanzOnline, or April 30 for paper filing. Tax year follows calendar year (January 1 - December 31). Quarterly advance tax payments required on February 15, May 15, August 15, November 15 based on previous year liability.
What employer taxes and social contributions apply?
Employer social security contributions ~21% of gross wages: 12.55% pension, 3.78% health, 2.95% unemployment, 1.1% accident insurance. Additional levies: 3.7% Family Burdens Equalization, 3% municipal payroll tax, 1.53% employee pension fund, 0.31-0.4% Chamber of Commerce contribution. Total employer burden ~30%.
How much does it cost to establish a GmbH in Austria?
Minimum share capital: €10,000 (€5,000 must be paid in cash). Incorporation costs: €1,000-€3,000 for registration, notary, legal fees. Average timeline: 8-12 working days. Registration in Firmenbuch (commercial register) required. Tax and social security registration mandatory. No residency requirements for shareholders. Many steps can be completed online.
Calculate Your Austrian Corporate Tax
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