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Doing Business in Austria

Doing Business in Austria

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Business Start-Ups

Business Start-up Promotion Act (Neugründungsförderungsgesetz)

If you intend to set up a company, you will be expected to pay various fees. However, if your business start-up meets specific requirements set forth by what is known in Austria as the Neugründungsförderungsgesetz (which translates as Business Start-up Promotion Act), certain fee exemptions may apply.

Your start-up might be exempt from the following fees:

  • stamp duty (Stempelgebühren),
  • administrative fees (Bundesverwaltungsabgaben),
  • real property transfer tax (Grunderwerbsteuer),
  • court fees (Gerichtsgebühren),
  • payroll fringe costs (Lohnnebenkosten).

Industrial law (Gewerberecht)

In Austria, several trades require some sort of qualification certificate. You will need a business license, especially if the nature of your work requires skilled labour (e.g., a mechanic or a carpenter). The qualification you need to provide depends on the type of business you intend to establish.

To obtain a business licence you generally need to:

  • have Austrian or EU/EEA citizenship;
  • be a natural person aged 19 or older;
  • have no reasons for exclusion in your records (e.g., financial offence, court sentence);
  • have a business location and, if required, hold an operating licence (Betriebsanlagengenehmigung).

If you intend to establish a corporation or a partnership, you must appoint a managing director who holds the right to exercise this trade (e.g., a carpentry business must have at least one fully qualified carpenter as its managing director).

Sole proprietors are required to designate a licensed managing director if they do not meet the requirements themselves.

There are a lot of unregulated trades for which no qualifications are required (e.g., any kind of trading).

Taxes

The most important taxes are:

  • income taxes: income tax (Einkommenssteuer), corporate income tax (Körperschaftsteuer) and capital gains tax (Kapitalertragsteuer)
  • value-added tax (Umsatzsteuer)
  • real property transfer tax (Grunderwerbsteuer)

Income taxation

Income tax (Einkommenssteuer)

Natural persons whose place of residence (Wohnsitz) or habitual residence (gewöhnlicher Aufenthaltis in Austria are obliged to pay income tax on their worldwide incomeNon-resident taxpayers only need to pay income tax for their Austrian income. Generally, earnings are subject to income tax if they fall into one of the seven income categories under fiscal law, which are:

  • income from agriculture and forestry;
  • income from independent services;
  • income from trade and business;
  • income from employment;
  • income from capital investments;
  • income from rent and leasing;
  • other earnings.

First, these seven income categories are added up. The basis for income tax calculation is the amount left after substracting any extraordinary expenses. Income tax in Austria is progressive, ranging from 0 to 55 percent.

In Austria, employees receive 14 monthly salaries a year. The 13th and 14th salaries are subject to tax privileges.

Companies and income tax
Sole proprietors and partners in partnerships are subject to income tax.

Taxation of partnerships:
The partnership itself is not subject to taxation. The profit is directly attributed to the partners, who are then subject to income tax.

Corporate income tax (Körperschaftsteuer)

The profits of corporations are subject to corporate income tax. Corporate income tax rate is 23 percent in 2024 (non-progressive).

Corporate income tax payers are required to pay a minimum tax amount regardless of profitability. Limited liability companies (GmbH) and Flexible Companies (FlexCo) are required to pay € 500 annually (as of 1.1.2024). 

Joint stock corporations must pay a minimum of € 3,500 in taxes.

Capital gains tax (Kapitalertragsteuer)

Capital gains tax is withheld on dividends paid, interest on bank deposits as well as bonds. For a lot of cases a rate of 27.5 percent is withheld at source, so individuals are usually not required to pay capital gains tax themselves.

Value-added tax (Umsatzsteuer)

The VAT rate is 20 percent. In certain cases, this rate has been reduced to 10 or 13 percent.

Real property transfer tax (Grunderwerbssteuer)

Land acquisition is subject to a 3.5 % real property transfer tax on the purchase price.

Social security system

The social security system in Austria is based on the principle of compulsory insurance (Pflichtversicherung). It includes accident insurance (Unfallversicherung), pension insurance (Pensionsversicherung) and health insurance (Krankenversicherung).

Both the employer and the employee contribute to social security. The employer deducts the insurance contribution from the employee’s total monthly earnings.

Contribution of the Employee Contribution of the Employer
Hourly wage (blue collar) 18.07 % 20.98 %
Salary (white collar) 18.07 % 20.98 %

The maximum monthly contribution base (Höchstbeitragsgrundlage) is € 6,060 (2024).

Accounting principles / Reporting requirements

Accounting principles under tax law expand on the general bookkeeping obligations (Buchführungspflicht) set forth by commercial law (Unternehmensgesetz). Therefore, all taxpayers obliged to keep accounts under commercial law must also do so for tax purposes.

Corporationsmust maintain account records in accordance with general accounting principles. The same applies to sole proprietors and partnerships with an annual profit exceeding € 700,000.

Companies not subject to the general accounting obligations can either prepare a revenue and expenditure statement (Einnahmen-Ausgabenrechnung) or opt for lump-sum taxation (Pauschalierung).

Austrian business culture

The business culture in Austria at a glance:

typical working day in Austria is from 8:00 am to 5:00 pm.

Hierarchy and status are important values in Austrian business culture. Ensure your business card includes all your professional and academic titles When you meet business partners, formally address them by their titles followed by their family names.

If you wish to establish a strong business relationship, punctuality is crucial. Make sure to arrive at meetings well prepared.

When engaging in business small talk you should avoid the topic of World War II and refrain from discussing topics such as money or religion. Make yourself familiar with facts that distinguish Austria from Germany, as Austrians are proud of the unique features of their country. They consider themselves a ‘skiing nation’ and take great pride in their successful skiers. 

Last updated: 01. January 2024

Despite careful data compilation, we cannot guarantee the accuracy and completeness of the information presented. If you have any further questions, please do not hesitate to contact us. We will be happy to support you at any time within the scope of our professional qualifications.

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Bürozeiten

Montag–Donnerstag
8.00–17.00 Uhr

Freitag
8.00–14.00 Uhr

 

Betriebsurlaubstage
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Außerhalb der Öffnungszeiten nutzen Sie bitte unsere Einwurfklappe rechts neben dem Haupteingang.