Austrian group taxation – an overview

International Tax Review is part of Legal Benchmarking Limited, 4 Bouverie Street, London, EC4Y 8AX

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Austrian group taxation – an overview

austria mountains

Companies are, by law, separate and independent entities. Any profit derived by a corporation is subject to Austrian corporate income tax at a flat rate of 25% regardless of whether the profit is distributed to shareholders or retained.

However, if an Austrian corporation holds a (direct or indirect through another group member or a partnership) participation of more than 50% of the capital and the majority of the voting rights in a domestic or foreign corporation, a tax group may be established.

A non-resident company can also form a tax group, provided that it is either listed in the annex of the EU Parent-Subsidiary Directive or is comparable to a resident company and has its place of management in the European Economic Area. In addition, the non-resident company needs to be registered in the commercial register with an Austrian branch and the shares in the group members have to be attributable to that Austrian branch.

All Austrian corporations as well as comparable foreign corporations which are resident in the EU or in a state which has concluded an agreement for Exchange of Information and Mutual Assistance in the Collection of Taxes with Austria, theoretically qualify as a group member. However, only “first-tier” foreign subsidiaries may be included into the group, meaning that the required share exceeding 50% in a foreign group member needs to be held by one or more Austrian group members.

As a consequence of group taxation, the group members’ total profits and losses are attributed to the group parent. The degree of participation of the latter is irrelevant. The total attribution of profits and losses also takes place when the percentage of participation does not amount to 100%. An exception exists for foreign group members: only losses of foreign group members may be deducted from the taxable income of the group in portion of the amount of the direct shareholding of the group in the foreign entity. However, such losses are recaptured and taxed in Austria in subsequent years if and to the extent they can be offset against profits of the foreign entity under its domestic tax regime or if the foreign entity drops out of the group. Forming a tax group is particularly useful when at least one of the group companies incurs a loss in the relevant year.

The group needs to be existent for a period of at least three years. If the tax group is terminated earlier, all benefits from the group taxation will be lost and each member of the group will be taxed as a separate entity with retroactive effect. Providing that all requirements are fulfilled, the group leader may opt for group taxation simply by filing an application form with the tax authorities. Furthermore it has to be mentioned that binding rulings are available in group taxation issues (costs differ between €1,500  and €20.000 ($5,500 and $22,000) depending on the turnover of the requesting taxpayer).

This article was prepared by WTS Austria, member of WTS Global.

Kerstin Weber, certified tax advisor

00431 24 266 17

kerstin.weber@wts.at

Jürgen Reinold

00431 24 266 41

juergen.reinold@wts.at

more across site & shared bottom lb ros

More from across our site

Awards
The Social Impact Awards unveil new categories to reflect a changing legal and social landscape
Australia's approach to tax policy has undergone significant shifts in recent years, reflecting global trends and unique domestic considerations. These developments merit close attention from tax professionals
The UK has temporarily dodged the 50% rate due to a trade deal signed with the US in May; in other news, Ryan acquired a Northern Irish tax firm
Following a $28 million funding round, Aibidia wants to ‘double down’ on the US market via partnerships with the ‘big four’, the Finnish TP tech provider’s CEO tells ITR
The Luxembourg-based TP leader tells ITR about relishing the intellectual challenge of his practice, his admiration for Stephen Hawking, and what makes tax cool
The case to determine whether the tariff regime is constitutional will eventually find its way to the US Supreme Court, ITR has also heard
In other news, the Council of the EU pledged support to a CBAM simplification and exemption initiative, and Portugal issued new VAT filing guidance
While Brazil’s sweeping tax updates are a triumph for modernisation, Giuliano Gioia of Sovos warns that MNEs with a Brazilian footprint should be prepared for a short and sharp adjustment
Matthew Sharp, leader of London’s newest tax disputes team, shares the trials and tribulations of starting from scratch
Brazil appears to be adopting protocols to align national taxation with international standards, but recent changes are not immune from criticism, experts tell ITR
Gift this article