Corporate income tax
Up-to-date information about corporate income tax, tax burden in comparison to income tax, minimum corporate income tax, corporate income tax return etc.
Information for newcomers
While all natural persons must pay income tax, corporate income tax is the income tax paid by a legal person. Corporate income tax is calculated from income determined in accordance with income tax law, with all revenue of capital companies being classified as revenue from business operations. Corporations are independently endowed with rights and subject to obligations, and have their own legal personality. They act through their governing bodies or legal representatives.
These rules also apply to all entrepreneurs from EU Member States in Austria.
The following count as corporations:
- legal persons under private law (e.g. companies limited by shares, limited liability companies, co-operatives, associations, foundations)
- legal persons under public law (e.g. public authorities such as the Federal Government, provinces and municipalities, chambers, social security institutions, legally recognised religious communities etc.)
Corporations under public law (KöR) are only subject to limited corporate income tax, whereby their commercial operations (BgA) are subject to unlimited corporate income tax as separate coporate income tax entities, irrespective of whether or not this is for profit.
Limited and unlimited tax liability
Corporations which have their management or registered office in Austria are subject to unlimited corporate income tax. One of these two conditions must be met therefor:
- Corporations, associations of persons and assets have their registered office at the place which is set down for example by law, contract, articles of association or a deed of foundation.
- The place of management is any location at which the company management is centred. It must not be confused with the corporation’s registered office.
The place of management is where the decisive decisions about the company management are made, and thus where the necessary and important measures for managing the company are determined.
Therefore, in order for a corporation to be subject to unlimited corporate income tax, it is sufficient that their registered office is in Austria or that they are managed from Austria – both conditions do not need to be met.
Unlimited tax liability covers a corporation´s total income – irrespective of whether this is obtained in Austria or abroad and of which revenue it consists.
Unlimited tax liability for revenues from foreign sources can be restricted by way of double taxation agreements with other countries or through measures at a national level in Austria.
Corporations which have neither their management nor their registered office in Austria are subject to limited corporate income tax ("limited tax liability of the first kind"). Limited tax liability covers only certain domestic revenues.
Also corporations under public law and corporations that are exempt from unlimited corporate income tax, e.g. non-profit corporations, are subject to limited corporate income tax. Irrespective of the existence of a commercial operation (which, as a rule, is subject to unlimited tax liability on its income), corporations under public law are subject to limited tax liability on certain capital income and profits from the sale of real estate ("limited tax liability of the second kind").
Exempt from unlimited corporate income tax liability are, among others:
- Under certain conditions, non-profit, charitable and ecclesiastical legal entities (→ BMF)German text as defined by the BAO
- Non-profit property developers under the WGG, insofar as their activities are limited to exempt transactions and asset management
- Under certain conditions, social events organised by public corporations against payment, e.g. fire department festivals
- Certain credit institutions that do not seek to make a profit, as well as security and compensation institutions
- Under certain conditions, land reform communities and settlement institutions
- Pension funds: Partial exemption that relates to the investment and risk community(ies)
- Under certain conditions, support and employee pension funds
- Small insurance associations with premium income averaging up to 4,400 Euro per year over the last three business years
- Agricultural cooperatives and winegrowers' cooperatives under certain conditions
- Professional and interest associations within the scope of the statutory representation of interests
- Medium-sized financing companies for income attributable to the financing sector
Tax rate and minimum tax
Corporate income tax is 25 per cent (in 2023: 24 per cent, from 2024: 23 per cent) of taxable income, irrespective of the level of income. Unlike income tax, corporate income tax is not charged on a graduated progressive scale, but is a standard rate.
For companies with share capital subject to unlimited tax liability, there is a minimum tax level of five per cent of one quarter of the statutory minimum level of the nominal or share capital for each full calendar quarter, with newly founded limited liability companies being charged a reduced minimum tax in the first ten years from their incorporation (see chapter 'Minimum corporate income tax').
If the net profit is distributed to the shareholders (natural persons) of the capital company, this is subject to capital yield tax (of 27.5 per cent). The shareholders pay income tax in this way, provided that the recipients of the distribution do not make use of the standard tax option (in this case the distribution is taxed on a progressive scale as part of the tax assessment).
Responsible for the content: Federal Ministry of Finance