Austria: Austrian changes impacting investors

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

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

Austria: Austrian changes impacting investors

twardosz.jpg

Benjamin Twardosz

Austrian GmbHs afford foreign investors a number of advantages as holding and trading/group finance companies. They can be formed quickly to accommodate most time constraints, but effective July 1 2013, it will become more cost-efficient than before to form such entities. The changes will reduce minimum share capital requirements for a GmbH from €35,000 ($45,000) to €10,000. Court and notary fees will be similarly reduced, as will be the minimum corporate income tax payable (from €1,750 a year to €500). Another important change affects the treatment of proceeds under a purchase price agreement in M&A transactions: If a seller of a corporation retains the right to receive a dividend paid out after the change of ownership (Dividendenvorbehalt), the dividend will in future be regarded as a part of the purchase price and may be taxable to the seller, subject to treaty provisions between Austria and the seller's residence jurisdiction.

New corporate income tax guidelines have been released by the Austrian Ministry of Finance. Among the changes in the guidelines is a tightening of the rules on interest deductibility on funding related to the acquisition of participations. Although the changes should not affect the deductibility of interest on debt which funds the acquisition of participations from third parties, the Ministry of Finance will disallow the deduction of such interest where an Austrian entity funds both non-related and related acquisitions simultaneously from other group companies.

Benjamin Twardosz (benjamin.twardosz@wolftheiss.com)

Wolf Theiss, Vienna

Website: www.wolftheiss.com

more across site & shared bottom lb ros

More from across our site

ITR’s data has highlighted the US firm’s ambition to become America’s ‘premier’ tax player via a concerted partner recruitment strategy
Jaap Zwaan’s arrival continues a recent streak of A&M Tax investing in the region; in other news, the US and Japan struck a deal that significantly lowered tariff rates
In a world where international tax concepts rely on human activity, Leonard Wagenaar poses existential questions about the future of such ideas when AI is ever-present
France v Axa provides a practical illustration of how the burden of proof is applied in TP matters under French law, ITR also heard
In an exclusive interview with ITR, Ian Gary calls for a central public CbCR database and bemoans the US’s lack of involvement in international tax transparency
Reckitt Benckiser is to divest its Essential Home business, which includes more than 70 brands, to private equity firm Advent International
In the first of a new series of weekly opinion pieces, ITR Editor Tom Baker reflects on the OECD’s attempts to sanitise the US’s brazen pillar two negotiations
The threat of 50% tariffs on Brazilian goods coincides with new Brazilian legal powers to adopt retaliatory economic measures, local experts tell ITR
The country’s chancellor appears to have backtracked from previous pillar two scepticism; in other news, Donald Trump threatened Russia with 100% tariffs
In its latest G20 update, the OECD also revealed tense discussions with the US where the ‘significant threat’ of Section 899 was highlighted
Gift this article