Austria corporate tax - guide for international expansion

Are you considering expanding your business operations to Austria? Understanding the country's corporate tax landscape is essential for making informed decisions about your European expansion strategy.

Austria offers a stable business environment in the heart of Europe, with access to both EU markets and Eastern European opportunities. Whether you're establishing a subsidiary or planning cross-border operations, knowing your tax obligations will help ensure compliance and effective financial planning. Wise Business can help streamline your international payments and currency management as you navigate Austria's corporate tax requirements.

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*This publication is provided for general information purposes and does not constitute legal, tax, or other professional advice from Wise Payments Limited, its subsidiaries or affiliates, and it is not intended as a substitute for obtaining business advice from a tax advisor or any other professional. *

Austria Corporate tax rate in 2026

Austria's standard corporate income tax rate is 23% for 2025.¹ This rate applies to the worldwide income of Austrian tax-resident companies and to Austrian-source income of non-resident companies.²

Austrian companies are subject to corporate income tax on their profits, calculated after deducting allowable business expenses, depreciation, and other tax-deductible items. The tax applies to all forms of business income, including trading profits, investment income, and capital gains.³

For small and medium-sized enterprises, Austria doesn't offer a reduced corporate tax rate, unlike some other EU countries. However, various tax incentives and deductions are available to support business investment and research and development activities.⁴

How to pay corporate tax in Austria

Corporate tax payments in Austria are managed through the country's tax administration system, with companies required to file annual returns and make advance payments throughout the year.⁵

Austrian companies must file their corporate tax returns (Körperschaftsteuererklärung) by 30 June of the following year if filed electronically via FinanzOnline for the preceding calendar year. However, if you engage an Austrian certified tax advisor or accountant to prepare your return, the deadline is significantly extended under a "quota system," which can allow filing between 1 October of the following year and 31 March of the second following year.⁵

The Austrian tax system operates on a pay-as-you-earn basis for corporate tax, requiring companies to make quarterly advance payments (Vorauszahlungen) based on the previous year's tax liability. These payments are due on 15 February, 15 May, 15 August, and 15 November each year.⁵

Late payment of corporate tax that is underpaid in the final assessment will incur interest charges (Nachforderungszinsen). This interest is calculated at 2% above the applicable base rate (currently around 3.53% per annum as of late 2025).⁵ Other non-compliance penalties, such as for the late disclosure of financial statements to the commercial register, start from €700.⁶

Let's calculate the annual tax liability for a company with €1.5 million turnover. Assuming a profit margin of 10%, the taxable profit would be €150,000. At Austria's corporate tax rate of 23%, the annual tax due would be: €150,000 × 23% = €34,500.

When expanding your business to Austria, the right financial tools will make the process smoother. Using a platform like Wise Business makes it easy to manage international finances. A multi-currency account allows businesses to pay for incorporation costs, registration fees, and government taxes in local currency without paying high exchange rate fees.

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Tax Compliance in Austria

Steps to keep your company fully compliant with Austrian tax regulations:

• Register for taxes early: After incorporating your company, register for corporate income tax (CIT), VAT, and any other applicable taxes to avoid penalties. Early registration ensures legal operation and smooth international corporate tax planning.⁷
• Corporate Income Tax (CIT) filing: Austria’s corporate tax rate is 25%. Returns must be filed electronically by June 30 following the fiscal year. Companies using a certified Austrian tax advisor can extend the deadline to March 31 of the second following year. Paper filings are due by April 30. Late filing penalties start as a percentage of the tax due, with higher charges for deliberate non-compliance.⁸
• VAT registration and filing: Businesses exceeding €30,000 in domestic turnover or €10,000 in distance sales must register for VAT. Monthly and quarterly returns are due on the 15th of the second month following the reporting period, while the annual return is due by June 30 of the following year. Submitting returns via Austria’s FinanzOnline portal is mandatory.⁷
• Employee and cross-border reporting: Companies must register employees with social insurance institutions before employment begins. Cross-border capital transactions should be reported to the Austrian National Bank (OeNB) for statistical purposes.

Engaging business and corporate tax planning lawyers can help ensure compliance with deadlines, maintain accurate records, and effectively navigate international corporate tax requirements.

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International Expansion to Corporate Tax

Austria is your ticket to the lucrative European market. Its market economy is deeply integrated into the European Union and benefits from strong trade connections, particularly with Germany, its largest partner. More than half of Austria’s GDP comes from exports. These elements make it an ideal testing ground for businesses aiming to enter wider EU markets.⁹

The country’s central location creates access to Western Europe and high-growth economies in Central, Eastern, and Southeastern Europe.⁹ Vienna is within three hours’ flight of every European capital, and Austria’s advanced infrastructure: road, rail, waterways, and port connections, ensures solid links across the continent. International organizations also choose Austria as a base. Vienna hosts the UN, OPEC, and IAEA, along with more than 400 regional headquarters of multinational companies.¹⁰

Moreover, the country consistently ranks high in terms of living standards, political stability, and workforce quality. According to Eurostat, the government holds the 5th highest purchasing power in the EU.¹¹ Its GDP per capita stands at €45,722, supported by a population of 9.2 million and a strong focus on innovation. Austria spends 3.35% of its GDP on R&D, placing research and development at the center of its economy.¹²

It’s also a leader in renewable energy, generating more than 76% of its electricity from hydropower and wind, with a goal of 100% by 2030. These strengths, combined with high digital adoption (92% of residents use e-government services), make incorporation efficient and investor-friendly.¹³

Listed below are the steps to start a business in Austria:¹⁴

1. Conduct market research to evaluate demand.
2. Draft a business plan to reduce entrepreneurial risks.
3. Select the appropriate legal structure.
4. Choose a business name and secure a location.
5. Register with the Austrian Commercial Register (Firmenbuch).
6. Obtain a tax identification number from the Austrian tax office.

After registration, companies can begin operations in one of Europe’s most strategically located and innovation-driven markets. Just make sure you know all the tips to do business internationally.

Incorporation of Business in Austria

Starting a company in Austria involves several clear steps under the supervision of the Commercial Register (Firmenbuch) and relevant local authorities. The process ensures compliance with Austria’s legal and regulatory framework while offering efficiency through digitised services.

Key steps include:¹⁵

• Company name reservation: Submit your chosen name to the Commercial Register to confirm availability.
• Drafting founding documents: Prepare and notarize the Articles of Association, a requirement for most legal entities.
• Minimum share capital: Deposit the required share capital—€35,000 for a GmbH (limited liability company), with at least half paid upfront.
• Commercial Register entry: Apply with notarised documents, proof of capital contribution, and director details.
• Trade license: You can apply for a business license (Gewerbeberechtigung) through the local District Authority, which regulates most business activities.
• Tax registration: Obtain a tax identification number from the Austrian tax office and, if applicable, register for VAT.
• Social security registration: Enrol employees with the Austrian social insurance system before commencing operations.

Austria’s digital reforms allow many of these steps, such as filing incorporation documents and registering with authorities, to be completed online. On average, incorporation takes 8-12 working days, making it one of the faster processes within the EU.

Business Entities in Austria

Austria offers several types of business entities, each designed to meet different operational and liability needs:¹⁶

• Private Limited Liability Company (GmbH): The most popular form for small and medium enterprises. Requires a minimum share capital of €10,000, with at least €5,000 paid in cash. Shareholders enjoy limited liability, and no residency requirements exist for owners. Proper translation of all documents into German is mandatory.
• Stock Corporation (AG): Suitable for larger companies or those planning to list on a stock exchange. Requires at least €70,000 in initial capital and a supervisory board with at least three members. Shareholders benefit from limited liability.
• General Partnership (OG): Formed by two or more partners who share full liability. All partners participate in management, and at least one must demonstrate relevant skills for the business activity.
• Limited Partnership (KG): This type of partnership involves at least one general partner with unlimited liability and one limited partner liable only up to their investment. It is ideal for investors who wish to limit risk.
• Sole Proprietorship: Simplest form, managed by one individual. Foreign citizens must obtain a residence permit. Owners bear full personal liability for business obligations and are suitable for professional or small-scale activities.

Each entity type has specific legal, capital, and registration requirements. GmbHs and AGs remain the most preferred forms due to their flexibility, credibility, and protection of personal assets.

International corporate tax best practices

Managing corporate tax obligations across multiple jurisdictions requires strategic planning and adherence to international standards. Here are key practices for businesses operating internationally.

Maintain robust compliance procedures by establishing clear processes for tax return preparation and filing in each jurisdiction where you operate. This includes keeping detailed records of all business transactions, maintaining proper documentation for transfer pricing, and ensuring timely payment of all tax obligations to avoid penalties and interest charges.

Understanding and leveraging double taxation agreements (DTAs) is crucial for international businesses. Austria has concluded comprehensive DTAs with over 90 countries, which can significantly reduce your overall tax burden by preventing the same income from being taxed in multiple jurisdictions. These agreements typically provide for reduced withholding tax rates on dividends, interest, and royalties.

Stay current with international tax developments, particularly the OECD's Base Erosion and Profit Shifting (BEPS) initiatives and Pillar Two global minimum tax rules. Austria has implemented the EU's Anti-Tax Avoidance Directive, which includes measures on controlled foreign companies, interest deductibility limitations, and general anti-abuse rules⁹.

Implement proper transfer pricing documentation to demonstrate that intercompany transactions are conducted at arm's length. This is particularly important for multinational enterprises with related-party transactions, as tax authorities increasingly focus on transfer pricing compliance.

Take the complexity out of international expansion with Wise Business

Researching corporate tax is a crucial step when expanding your business into a new country. The next step is setting up the financial infrastructure to handle the complexities of operating across borders, from managing multi-currency cash flow to mitigating FX risk.

The Wise Business account provides the financial tools to make your international expansion to Austria efficient and simple. It's the one account for managing your money globally.

With a Wise Business account, you can:

• Pay suppliers and initial fees: Pay suppliers, global payroll, and one-off incorporation costs in the local currency.

• Get paid as if you are a local business: Use local account details for 8+ major currencies to easily receive payments from customers or investors.

• Manage your money across borders: Hold and exchange 40+ currencies in one account, always with the mid-market exchange rate and low, transparent fees.

• Streamline your accounting: Integrate with tools like Xero or QuickBooks to simplify tracking your company's international finances.

• Empower your team: Provide multi-user access for your finance team and issue expense cards for international spending.

Wise is designed to support every step of your journey, from registration to receiving international payments and managing your global treasury.

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FAQs - Corporate tax in Austria

Who is liable for corporate tax in Austria?

Companies that are tax-resident in Austria are liable for corporate tax on their worldwide income. A company is considered Austrian tax-resident if it has its place of management or registered office in Austria. Non-resident companies are only taxed on their Austrian-source income, such as income from a permanent establishment or certain types of Austrian real estate.

Are there any tax incentives for businesses in Austria?

Yes, Austria offers several tax incentives to encourage business investment and innovation. The research and development (R&D) premium provides a cash refund of 14% for qualifying R&D expenses, which can be particularly valuable for technology companies. Additionally, accelerated depreciation is available for certain assets, and there are specific incentives for digital investments and environmental protection measures.

What is the tax treatment of dividends in Austria?

Dividends received by Austrian companies from other Austrian companies are generally exempt from corporate tax under the participation exemption. For dividends from foreign companies, exemption applies if the Austrian company holds at least 10% of the foreign company's share capital for at least one year. Dividends paid by Austrian companies to shareholders are subject to 27.5% withholding tax, though this may be reduced under applicable double taxation agreements.

What is the process for registering for corporate tax in Austria?

Companies must register with the Austrian tax authorities within one month of commencing business activities. Registration is done through the FinanzOnline portal or by submitting forms to the relevant tax office. You'll need to provide details about your business activities, expected turnover, and accounting methods. Once registered, you'll receive a tax number (Steuernummer) which must be used on all tax filings and correspondence.

What are the common pitfalls to avoid regarding corporate tax in Austria?

Common mistakes include failing to make quarterly advance payments on time, inadequate transfer pricing documentation for related-party transactions, and incorrect application of double taxation agreement benefits. Many businesses also underestimate the importance of maintaining proper accounting records in German or having them translated by certified translators. Additionally, ensure you understand the distinction between Austrian GAAP and IFRS for tax purposes, as this can significantly impact your tax calculations.

Sources used in this article:

1. PwC Tax Summaries: Austria Taxes on Corporate Income
2. PwC Tax Summaries: Austria Corporate Residence
3. PwC Tax Summaries: Austria Deductions
4. PwC Tax Summaries: Austria Tax Credits and Incentives
5. PwC Tax Summaries: Austria Tax Administration
6. EY: Austria Tax News (PDF)
7. Taxually: Austria VAT Rate and Compliance
8. Commenda: Austria Corporate Tax Rates
9. U.S. Department of State: 2024 Investment Climate Statements - Austria
10. Invest in Austria: Market Potential
11. European Union: Principles, Countries, History - Austria
12. Invest in Austria: Official Website
13. Invest in Austria: Economic Climate
14. Multiplier: Austria Company Registration
15. Invest in Austria: Starting a Business in Austria
16. Company Formation Austria: Company Types in Austria

Sources last checked 10/10/2025