What is Verlustabzug (Austrian Loss Carry-Forward)?

The Verlustabzug (loss deduction) under §8 Abs 4 KStG allows Austrian companies to offset prior years' tax losses against current year profits. The rules balance support for businesses recovering from loss-making periods with a minimum taxation principle that ensures some tax is always payable once profitability returns.\n\n**The 75% cap rule (Mindestbesteuerung)**\nThe most important feature of the Austrian system is the Mindestbesteuerung: regardless of available brought-forward losses, a maximum of 75% of current year taxable income can be offset by prior year losses. The remaining 25% is always taxable. This is a deliberate policy choice — Austria's legislature wanted to ensure that profitable companies pay some tax even during recovery phases. Germany uses a similar rule.\n\n**Indefinite carry-forward**\nUnlike some jurisdictions that limit loss carry-forward to a fixed number of years, Austria allows indefinite carry-forward under the standard rules. Losses do not expire. However, the 75% cap means it can take multiple years to exhaust a large accumulated loss pool.\n\n**No carry-back**\nAustria does not permit carry-back of losses to prior years (unlike the UK, which allows a limited 1-year carry-back). A loss in 2025 cannot be used to reclaim KSt paid on 2024 profits.\n\n**Change of ownership restrictions**\nIf a GmbH changes ownership substantially — i.e., more than 75% of shares change hands — the Mantelkauf (shell purchase) rules apply. Pre-acquisition losses may be forfeited if the economic substance of the business has also changed significantly. This prevents the purchase of loss companies purely for their tax assets.\n\n**Provisional loss assessment**\nIn the year a loss arises, the GmbH must still pay the €500 Mindestkörperschaftsteuer. These minimum payments are themselves creditable against future KSt and do not interact with the 75% cap on trading loss offsets.\n\n**Interaction with Vorauszahlungen**\nIf a company has significant carried losses and expects its 2025 effective tax rate to be lower than the prior year assessment, it should apply for a Herabsetzung of its advance payments to avoid overpaying.