Taxation in Austria
Updated on Friday 04th May 2018
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1. What is the corporate tax in Austria?
The headline rate of the corporate tax in Austria is of 25% and it is payable within one month after receiving the tax assessments, issued in few weeks after filling the tax return. In general, companies have to file the corporate income tax within three months after the end of the fiscal year. However, certified tax advisers may extend the period by another year.
2. What is the VAT in Austria?
Some business sectors, goods and services of public interest such as food, health and cultural sector benefit from lower rates (for example a 10% tax is imposed on agricultural products, tourism, entertainment, food supplies, a zero rate is applicable to exports and no VAT is requested for banking transactions), but the generally applicable VAT rate is 20%. A special VAT tax is asked in the region Jungholz and Mittelberg. The registration for VAT is mandatory for the entities with an annual turnover above EUR 30,000
3. How can the VAT be refunded in Austria?
In Austria, most companies are eligible for VAT refund. However in some business sectors such as banking sector, holding companies etc., VAT is not recovered. Foreign businesses that don't perform taxable services are able to claim VAT refund for most of their expenses concerning their business. In order to obtain the VAT refund, entrepreneurs must choose the individual recovery period that can be three months up to one year. The minimum amount reclaimable is EUR 360 for three months period. The next step implies filing an Application for Refund of Value Added Tax. The refund is effectuated by credit transfer to the bank account of the company within 6 to 24 months after claiming. The required documents are the original invoices, the Application for Refund of Value Added Tax, Original Certificate of Status Taxable Person, and Questionnaire 18, an additional form completed when the refund is applied for the first time.
4. What is the dividend tax in Austria?
Under Austrian tax law, dividends are subject to withholding tax deduction of 25% but only if are paid to a non-resident company. Payments of dividends among companies located in Austria are exempted.
5. What are the taxes rates applied to other payments?
The interests are not taxable in Austria, while the royalties are taxed with 20%, but may be reduced by various provisions of the agreements signed by Austria. The technical services are taxed at 20%.
6. Are there any incentives for foreign investors in Austria?
Austria is a prolific location for foreign investors, not only regarding the economic possibilities, and productive workforce, but also due to the comprehensive system of national and local incentives programs. Austria offers varied incentives depending on the geographic location, number of jobs created, technology etc. Examples of incentives under Austrian law are grants for company premises, machinery and equipment, funds for maintaining jobs, allowance for research expenditures, structural fund programs etc. Incentives in Austria vary from preferential loans, guarantees and grants. Other exemptions are granted by the provisions of the Double Tax Treaties signed all over the years by Austria with various countries. According to these treaties, the corporate tax is exempt and also the withholding taxes on dividends, interests and royalties may be exempt or minimized.
7. Why do I need a local accountant for my Austrian business?
Any Austrian company is advised to use the services of an accountant to review its accounts, administer payroll, maintain the company accounts and take care of VAT registration and fillings. Working with a local accountant offers great advantages for the trust factor, and also for better knowledge of the system. An experienced local accountant can facilitate the financial procedures, having a better understanding of the required procedures of a company in Austria.
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