Austria taxes residents on worldwide income and non-residents on Austria-source income only. Austria operates an administrative assessment system: most employees have their full income tax liability settled through employer wage-tax withholding (Lohnsteuer) with no return required, while other taxpayers file a return that the tax office (Finanzamt) reviews before issuing a formal assessment notice (Einkommensteuerbescheid) determining the final liability.
The Austrian tax year is the calendar year. The standard individual filing deadline is 30 April (paper) or 30 June (electronic filing) of the following year; taxpayers represented by a registered tax advisor typically receive a materially extended deadline, often into the following calendar year, under arrangements between the Austrian tax administration and the tax advisory profession.
The standard corporate tax rate is 23%. A minimum corporate tax applies even to loss-making companies (a fixed annual minimum based on legal form).
Austria imposes a progressive personal income tax with a top marginal rate of 55%, applying above the highest bracket threshold. The 55% top bracket was originally scheduled to expire and revert to 50%, but this expiration has been postponed to 2030 under recent legislation.
The standard VAT rate is 20%, with reduced rates of 13% and 10% applying to specified goods and services (books, food, accommodation, and cultural events, among others).
An individual is an Austrian tax resident if domiciled in Austria or if they have a habitual abode there - generally assumed once presence exceeds six months. A company is Austrian tax resident if incorporated in Austria or managed and controlled from Austria. Residents are taxed on worldwide income; non-residents only on Austrian-source income.
A non-Austrian entity has an Austrian permanent establishment through a fixed place of business or a dependent agent habitually concluding contracts in Austria on the entity's behalf, following the OECD Model Treaty definition as applied under Austrian domestic law and any applicable tax treaty.
Introduced by the 2018 Annual Tax Act (Section 10a KStG, implementing EU ATAD), Austria's CFC regime applies where an Austrian corporate shareholder holds a controlling participation (directly or indirectly) in a foreign entity generating low-taxed passive income - dividends, interest, royalties, and similar financial income. The foreign entity's income counts as "low-taxed" if its effective foreign tax burden is 12.5% or less. An exclusion applies where passive income makes up one-third or less of the foreign entity's total income. Where triggered, low-taxed passive income is included in the Austrian shareholder's tax base; any non-refundable foreign tax already paid is creditable, though CFC losses cannot be attributed to the Austrian shareholder (they instead carry forward to offset the CFC's own future income).
Austria has no statutory thin capitalization ratio, though courts have developed principles for reclassifying undercapitalized related-party debt as hidden equity (with resulting interest treated as a non-deductible, withholding-tax-liable dividend). Separately, Section 12a of the Corporate Income Tax Act (implementing ATAD) caps deductible net interest at 30% of tax-EBITDA where debt leverage exceeds the group average, with a EUR 3 million de minimis exemption applying per company (or per group, for tax groups) regardless of EBITDA. Additionally, intragroup interest paid to a foreign connected party that is low-taxed or untaxed on that interest is denied recognition entirely for Austrian tax purposes.
Austria does not use an elective check-the-box classification system; entity classification generally follows a type-comparison test against recognized Austrian entity forms. Austria has implemented ATAD2-aligned anti-hybrid rules denying deductions for payments producing a hybrid mismatch outcome.
No foreign bank account or foreign financial asset reporting regime exists in Austria requiring residents to separately disclose foreign accounts; foreign income is reported through the standard annual tax return.
Austria provides an international participation exemption (internationale Schachtelbeteiligung) for qualifying dividends and capital gains: an Austrian company holding at least 10% of a foreign subsidiary's capital for a continuous minimum one-year period is generally exempt from Austrian corporate tax on dividends and capital gains from that shareholding, subject to anti-abuse conditions targeting low-taxed passive-income subsidiaries.
Austria has a real foreign tax credit regime available to both individuals and companies for foreign tax paid on foreign-source income not otherwise exempted by an applicable tax treaty, capped at the Austrian tax otherwise due on that income.
Austria has 93 double taxation treaties currently in force, per ICLG's 2026 Corporate Tax Laws report, entered into with essentially all major trading partners - though key provisions of the treaties with Russia and Belarus are currently suspended. Austria has separately concluded 7 Tax Information Exchange Agreements (with Andorra, Gibraltar, Guernsey, Jersey, Mauritius, Monaco, and Saint Vincent and the Grenadines) with jurisdictions it does not have a full DTT with.