What is the corporate tax rate in Austria in 2025?

Austria's Körperschaftsteuer (KSt) is a flat 23% on taxable profits for all Austrian corporate entities — GmbHs, AGs, and other limited liability structures. The rate was reduced from 25% to 23% in 2024 as part of Austria's Ökosteuerreform, making Austria broadly competitive with peer EU member states.\n\nHow the 23% compares internationally\nAustria's 23% sits below Germany (combined ~30%), above Ireland (12.5%), and broadly in line with the Netherlands (25.8%) and Sweden (20.6%). For EU-based founders choosing where to incorporate, Austria offers a credible mid-market rate combined with strong legal infrastructure and EU market access.\n\nThe minimum Körperschaftsteuer (Mindestkörperschaftsteuer)\nOne Austrian-specific feature: GmbHs must pay at least €500/year in KSt regardless of whether they make a profit. For AGs, the minimum is €3,500/year. This minimum is not lost — it accumulates as a credit (Gutschrift) on the company's Abgabenkonto and offsets future KSt liabilities once the company becomes profitable. New GmbHs formed using the Gründungsprivileg pay a reduced minimum of €250/year during the first 5 years.\n\nBeyond KSt: the full employer cost picture\nThe 23% KSt is just the corporate income tax. When running an Austrian GmbH with employees or paying a director salary, additional costs apply:\n\n- Kommunalsteuer

3% of gross payroll, paid to the municipality where the business operates. Fully deductible as a business expense for KSt purposes.\n- **Dienstgeberbeitrag (DB)**: 3.9% of gross payroll, funding family allowances.\n- **Dienstgeberzuschlag (DZ)**: approximately 0.4% of gross payroll, funding the insolvency fund.\n- **ASVG employer contributions**: approximately 21% of gross salary for health, pension, unemployment, and accident insurance.\n- **Total employer cost**: a €3,000 gross salary costs the employer approximately €4,100/month all-in (approximately 37% above gross).\n\n**Extracting profits: the GmbH dividend tax**\nWhen profits are distributed as dividends to individual shareholders, Kapitalertragsteuer (KESt) of 27.5% applies. The combined effective tax burden on profits distributed as dividends is: 23% KSt on profit + 27.5% KESt on the remaining 77% = approximately 40% total. For retained profits reinvested in the business, only the 23% KSt applies — making retention significantly more efficient.\n\n**Comparison with sole trader income tax**\nFor the same €100,000 profit, a sole trader (Einzelunternehmer) pays progressive Einkommensteuer of approximately 38–45% depending on deductions and SVS contributions, plus SVS (~26.8% on net income). A GmbH pays 23% KSt. At higher profit levels, the GmbH structure is substantially more tax-efficient for retained profits, though the additional administration costs (Steuerberater, Firmenbuch, UGB accounts) must be factored in.\n\n**Advance payments and cash flow**\nKSt is paid in four quarterly instalments: 15 February, 15 May, 15 August, and 15 November. Each equals one quarter of the prior year's KSt liability. If current year profits are expected to be significantly lower, a Herabsetzungsantrag (reduction application) can reduce the quarterly instalments.\n\n**Loss carry-forward cap**\nIf a GmbH makes a loss, the loss can be carried forward indefinitely against future profits. However, the Mindestbesteuerung rule caps loss utilisation at 75% of current year taxable income — so even in recovery years, at least 25% of profit is always subject to KSt.