Doing business in Austria - PKF

Taxation of Companies
Taxation of Profits
The taxable income for companies is determined on the basis of the
rules stated in the section “Taxable Income”. Austrian corporations’
profits are subject to corporate income tax at the company level at a
flat rate of 25%. Even if no income is generated, a GmbH triggers a
minimum corporate income tax of € 1.750 whereas an AG owes at
least € 3.500.
Taxation of groups of companies
In 2005 a new system of group taxation (Gruppenbesteuerung) was
introduced. Under this system of group relief the profit or loss of a
group member as computed for purposes of corporate income tax is
attributed to the controlling company. For losses, the group relief
operates across borders and is also applicable to non-resident first-tier
subsidiaries. Losses from non-resident subsidiaries can thus be offset
against group income under the condition that they be recovered if
offset abroad in a later tax year. The only condition for group
membership is a direct or indirect majority investment in a corporation.
The group members must also file for group taxation with the tax
authorities. The group must exist for at least three years. If a member
leaves the group for whatever reason before expiration of this period,
tax will be assessed as if it had never been a group member. A kind of
goodwill amortization is available for domestic share deals under
certain conditions.
18 PKF - Doing business in Austria - Taxation