What is Körperschaftsteuer (Corporate Income Tax)?

Körperschaftsteuer (KSt) is Austria's corporate income tax, levied on the taxable profits of all Austrian legal entities — primarily GmbHs and AGs. The 2024 Austrian tax reform (Ökosteuerreform) reduced the rate from 25% to 23%, making Austria more competitive within the EU and significantly improving after-tax returns for incorporated businesses.\n\n**Rate and structure**\nThe 23% flat rate applies to all taxable profit regardless of size. Unlike personal income tax, there are no progressive brackets for corporations. This flat structure makes forward tax planning straightforward. Austria does not levy a surcharge equivalent to Germany's Solidaritätszuschlag, so 23% is the effective national rate.\n\n**Mindestkörperschaftsteuer**\nOne distinctive Austrian feature is the minimum corporate tax. GmbHs must pay at least €500 per year in KSt, even in loss-making years. For AGs, the minimum is €3,500/year. This minimum tax is not lost — it is credited against future KSt liabilities once the company returns to profit (Anrechnung auf künftige KSt).\n\n**Taxable profit calculation**\nAustria follows the Steuerbilanz approach, adjusting commercial accounts (prepared under UGB — Unternehmensgesetzbuch) for tax purposes. Key non-deductible items include penalties and fines, non-business-related expenses, and excessive shareholder remuneration. Unlike Germany, Austria does not add back trade tax (there is no Austrian equivalent of Gewerbesteuer).\n\n**Dividend distributions and the combination rate**\nWhen a GmbH distributes profits to individual shareholders, Kapitalertragsteuer (KESt) of 27.5% applies to dividends. This creates a combined tax burden: 23% KSt on company profits + 27.5% KESt on the remaining 77% distributed = effective combined rate of ~40%. For retained profits, only the 23% KSt applies, making retention attractive for reinvestment.\n\n**Advance payments**\nKSt is paid quarterly in advance (Vorauszahlungen) on 15 February, 15 May, 15 August, and 15 November. Each instalment equals one quarter of the estimated annual liability. After the annual KSt return is filed, the Finanzamt issues a final assessment. Underpayments attract Anspruchszinsen (interest charges); overpayments are refunded.\n\n**Loss treatment**\nSee Verlustabzug entry — losses carry forward indefinitely but are capped at 75% of annual taxable income, ensuring at least 25% is always taxed.\n\n**Filing**\nThe Körperschaftsteuererklärung is filed electronically via FinanzOnline. Standard deadline: 30 June for the previous calendar year. With a registered Steuerberater, the deadline extends to 31 March of the following year.