Austria Accounting Questions Answered

What is the corporate tax rate in Austria in 2025?

Austria's Körperschaftsteuer (KSt) is 23% flat rate on company profits from 2024, reduced from the previous 25%. GmbHs also pay a minimum tax of €500/year even in loss-making years. There is no Austrian equivalent of Germany's Gewerbesteuer, making the headline rate simpler.

How does loss carry-forward work in Austria?

Austrian tax losses can be carried forward indefinitely but only up to 75% of current year taxable income can be offset in any year (Mindestbesteuerung rule). At least 25% of income is always subject to KSt, even with large brought-forward losses. There is no carry-back to previous years.

When do I need to register for VAT (Umsatzsteuer) in Austria?

Austrian businesses must register for Umsatzsteuer (USt) once annual turnover exceeds €35,000 (the Kleinunternehmer threshold). Below this, registration is optional. Three VAT rates apply: 20% standard, 10% reduced, and 13% intermediate. All filing is electronic via FinanzOnline.

What are the Austrian VAT rates in 2025?

Austria operates three Umsatzsteuer rates: 20% standard rate for most goods and services, 10% reduced rate for food, books, residential rent, public transport, and medicines, and 13% intermediate rate for hotels, campsites, and wine sold at the producer. The three-rate system is one of Austria's distinctive VAT features.

How do I set up a GmbH in Austria?

An Austrian GmbH requires a notarial deed (Gesellschaftsvertrag), minimum €35,000 share capital (€17,500 paid up), and registration with the Firmenbuch. The Gründungsprivileg reduces the cash requirement to €10,000 (€5,000 paid up) for the first 5 years. Total formation cost including notary: approximately €2,000–€4,000.

Should I operate as a sole trader or GmbH in Austria?

Austrian sole traders (Einzelunternehmen) pay progressive personal income tax (up to 55%) plus SVS social contributions (~26.8%). A GmbH pays 23% KSt. The GmbH becomes more tax-efficient for retained profits at approximately €50,000–€70,000 annual profit. The GmbH offers limited liability but costs more to run and requires more compliance.

What salary should I pay myself as an Austrian GmbH director?

An Austrian GmbH director-shareholder salary must be set at arm's length (market rate) and agreed in a formal Anstellungsvertrag before payment. Majority shareholders (>25%) pay SVS (~26.8%) on all income. The optimal salary/dividend split minimises total KSt and personal tax — typically a modest salary plus later dividend distributions.

What are the payroll obligations for an Austrian employer?

Austrian employers must register every new employee with the ÖGK (health insurance) before their first working day. Total employer costs are approximately 40% above gross salary (ASVG ~21%, DB 3.9%, DZ ~0.4%, Kommunalsteuer 3%). 13th and 14th month Sonderzahlungen are mandatory under most Kollektivverträge.

What business expenses are tax deductible in Austria?

Austrian businesses can deduct most genuine business expenses under §4 Abs 4 EStG. Key rules: meals and entertainment are 50% deductible, home office €3/day up to €300/year, equipment under €1,000 net is immediately deductible, passenger car VAT is always blocked, and work-related training is 100% deductible.

What is the Austrian Investitionsprämie and how do I claim it?

Austria's Investitionsprämie (Ökologisierungsbonus/Investitionsbonus) provides cash grants of 10% (standard) or 14% (ecological/green investments) on qualifying capital expenditure up to €1m per company. It is applied for via the Austria Wirtschaftsservice (AWS) platform and is separate from — and in addition to — normal AfA depreciation deductions.