This guide is for informational purposes only. Reach out to your tax advisor for any consulting or advice.
What taxes do I need to pay?
If you’re a tax resident in Austria, you may need to pay income tax depending on your income from the fund and from selling/redeeming shares in the fund at a flat rate of 27.5%.
In Austria, investment funds are considered transparent for tax purposes, regardless of the fund’s domicile.
You may not only pay tax on distributions from your shares in the fund, but also on realised gains on what wasn't distributed — like retained income or distribution-equivalent income. This may include dividends, interest, or capital gains on the level of the fund that weren’t distributed. Unrealised gains on the level of the fund will be taxed when you sell or redeem your shares in the fund — so keep track of your acquisition costs for tax purposes.
The amount of the yearly taxable gains depends on if the fund is reporting tax data to the Austrian notification office, the Oesterreichische Kontrollbank AG – OeKB.
You’ll find the relevant tax data per share for distributions and distribution-equivalent income in the tax report published on the OeKB web. This report also includes the amount to adjust your acquisition costs.
When selling or redeeming shares in the fund, the difference between the adjusted acquisition costs and the proceeds is taken as tax base.
Distributions are fully taxable. Distribution-equivalent income is taxed on a flat basis — the estimated tax base amounts the higher of 10% of the net-asset-value (NAV) per share by the end of the relevant year, or 90% of the difference between the first and the last NAV in the year.
This tax base is relevant when adjusting your acquisition costs. When selling or redeeming shares in the fund, the difference between the adjusted acquisition costs and the proceeds is taken as tax base.
In general, the tax rate for capital income is 27.5 % flat tax. Losses may be offset against certain capital income in the same year, but not carried forward.
Capital income can be dividends, interest, distributions, distribution-equivalent income, and capital gains from the sale or redemption of shares.
If you don’t have an account with an Austrian bank withholding the income tax, you’ll need to report your income from the fund for every tax year in your annual income tax return.
Wise can’t give you tax advice. If you’re not sure about your personal situation and the taxes you need to pay, it’s worth speaking to a tax adviser or your local tax authority.
Sole traders using the product when not professionally trading with securities can reference this guide.