Tax rates in Austria for 2026

Corporate Income Tax

Körperschaftsteuer, Austria's corporate income tax, applies at a flat 23% for the 2026 tax year — the same rate that has applied since 2024. The rate fell in two steps: 25% up to 2022, 24% in 2023, and 23% from 2024 onward.

A euro of Austrian company profit paid out to a private shareholder is taxed twice: 23% inside the company, then 27.5% withholding tax on the dividend. EUR 100 of pre-tax profit leaves EUR 55.83 in the shareholder's hands — a combined burden of 44.18%. Profit that stays in the company carries only the 23%.

The 23% rate applies to the worldwide income of Austrian-resident companies — GmbH, AG, and FlexKapG alike — regardless of where the profit was earned; see Tax Residence Rules below for what makes a company resident. Budget for this rate from the first profitable year of a new GmbH formation, as of July 2026.

Minimum Corporate Tax by Legal Form

The Mindestkörperschaftsteuer is a minimum corporate tax charged every year regardless of whether a company makes a profit, and for the 2026 tax year it is EUR 500 a year for a GmbH or FlexKapG and EUR 3,500 a year for an AG.

Both figures equal 5% of the legal form's minimum share capital: 5% of a GmbH's EUR 10,000 is EUR 500; 5% of an AG's EUR 70,000 is EUR 3,500. The current amounts took effect on 1 January 2024, alongside the reduction in minimum share capital, and are unchanged for the 2026 tax year.

Personal Income Tax Brackets 2026

Einkommensteuer, Austria's personal income tax, is progressive across seven brackets for the 2026 tax year, running from 0% to 55%. A marginal rate applies only to the slice of income inside its own band — the 40% figure below is what a euro earned between EUR 36,458 and EUR 70,365 costs, not what the whole salary costs:

The lower brackets are indexed each year for inflation under Austria's "cold progression" mechanism; the 2026 thresholds rose by 1.733%, two-thirds of the year's 2.6% inflation rate. The top bracket is the exception: its EUR 1,000,000 threshold and 55% rate are not indexed, and the 55% rate is a temporary measure currently due to expire at the end of 2029, reverting to 50%, as of July 2026.

These brackets apply to individuals — employees and self-employed sole traders alike — rather than companies, which pay corporate income tax instead (see above). Anyone comparing legal forms before starting a business in Austria should weigh this personal-rate exposure against the flat 23% corporate rate.

VAT Rates and Small Business Exemption

Umsatzsteuer, Austria's value added tax, is charged at four rates for the 2026 tax year: a 20% standard rate, two reduced rates of 13% and 10%, and, since 1 July 2026, a new super-reduced rate of 4.9%.

The 4.9% rate is new, effective 1 July 2026, and permanent rather than a temporary crisis measure. It replaces the 10% rate for a defined list of basic foodstuffs set out by Combined Nomenclature (CN) code in the new Anlage 3 to the Umsatzsteuergesetz: milk (including lactose-free), yoghurt, butter, fresh eggs, fresh, chilled, or frozen vegetables, pome and stone fruit, rice, wheat flour and semolina, unfilled pasta, bread, and table salt.

Eligibility follows the CN code assigned to the product, not its everyday name — the Federal Ministry of Finance is explicit that not every product sold as bread or pasta qualifies. Food outside Anlage 3 stays on the general 10% rate, so "groceries are 4.9%" is not an accurate summary.

Separately, the Kleinunternehmergrenze — the VAT exemption threshold for small businesses — is EUR 55,000 gross annual turnover for 2026, up from EUR 35,000 net through 31 December 2024, raised effective 1 January 2025. A 10% tolerance rule applies: exceeding EUR 55,000 by no more than 10% in a calendar year keeps the exemption through year-end; beyond 10%, the exemption is lost from the breaching transaction onward.

A business under the threshold need not charge VAT but can opt in voluntarily, typically to reclaim input VAT on its own costs. A business above the threshold must register with the tax office (Finanzamt) and charge VAT on taxable supplies. USP.gv.at publishes worked examples.

Capital Gains and Investment Income

Kapitalertragsteuer (KESt) is Austria's tax on capital income, and for the 2026 tax year it applies at a flat 27.5% to dividends and to other capital income, including gains realised on the sale of shares and comparable financial instruments, generally final for the recipient.

This 27.5% rate is frequently confused with the 25% rate that applies specifically to interest on ordinary bank savings and current accounts. The two are separate rates for separate categories of income, not one rate under two names: a private investor's dividends and share-sale gains are taxed at 27.5%, while the same investor's plain bank account interest is taxed at 25%.

For a company rather than an individual, capital gains are not taxed as a separate category. They are included in ordinary taxable income and taxed at the standard 23% corporate income tax rate described above, unless the participation exemption applies — see the next section.

Participation Exemption

An internationale Schachtelbeteiligung is Austria's international participation exemption, and it removes both dividends and disposal gains from Austrian corporate tax when an Austrian company holds at least 10% of a foreign corporation comparable to an Austrian Kapitalgesellschaft for an uninterrupted period of at least one year.

Once the 10%-stake and one-year conditions are both met, dividend distributions from the foreign subsidiary to its Austrian parent, and any capital gain on disposal of the holding, are exempt from Austrian corporate tax at the level of the Austrian recipient.

Dividends paid between two Austrian corporations can also qualify for a domestic participation exemption. As of July 2026, we could not confirm on an official source whether the domestic exemption carries the same 10%-stake and one-year conditions as the international rule above, or applies without any minimum stake or holding period. Treat the domestic conditions as a question for individual advice rather than a rate published on this page.

Loss Carryforward

Verlustvortrag, Austria's loss carryforward, lets a company or individual offset tax losses against taxable income in future years with no time limit on how long the loss can be carried.

For corporations — GmbH and AG — the offset is capped at 75% of that year's total taxable income in any single year, a limit known as the Verrechnungsgrenze; the unused loss carries forward again to later years. Austria has no general loss carryback (Verlustrücktrag): a temporary carryback mechanism applied only to the 2019 and 2020 assessment years during the coronavirus pandemic and was never made a permanent part of the law. A loss from the 2026 tax year, in other words, cannot be set against an earlier, profitable year.

Employer Social Security Contributions

Austrian employers contribute to the ASVG social security system on top of an employee's gross salary, and for 2026 the pure ASVG employer rate is 20.98%, made up of five separate contributions.

Accident insurance drops to 0% once an employee turns 60, and the unemployment-insurance component is reduced or zero for lower monthly incomes, starting at 0% up to roughly EUR 2,225 a month.

On top of the 20.98% ASVG rate, employers also pay the Dienstgeberbeitrag (DB) at 3.7% of the payroll base, a regional Zuschlag zum DB (DZ) of 0.28–0.40%, and the BMSVG "Abfertigung neu" severance contribution of 1.53%. Payroll advisors often bundle these into one "Lohnnebenkosten" figure in the high twenties as a percentage of gross salary; we have not verified a single combined percentage against an official source, so the items above are listed separately rather than pre-summed.

Contributions are capped by the Höchstbeitragsgrundlage, Austria's maximum monthly contribution base: EUR 6,930 a month (EUR 231 a day) for 2026, or EUR 97,020 a year including special payments such as holiday and Christmas bonuses. Salary above this ceiling carries no further ASVG contribution.

Tax Residence Rules

Section 1(2) of the Einkommensteuergesetz settles the question in one sentence: natural persons with a Wohnsitz or a habitual abode in Austria are unlimitedly liable, and that liability "extends to all domestic and foreign income". Anyone with neither is liable only on the Austrian-source categories listed in § 98.

A Wohnsitz is defined by § 26(1) of the Bundesabgabenordnung as having a dwelling at your disposal in circumstances suggesting you will keep and use it. There is no day count in that test at all — a flat that remains available to you can create Austrian residence with very few nights spent in it. The 183-day figure people remember belongs to the employment article of double-tax treaties and answers a later question, not this one.

The habitual abode limb does carry a number, and it works backwards. Section 26(2) BAO provides that where unlimited liability is tied to habitual abode, it always arises once the stay in Austria exceeds six months — and in that case "the liability extends to the first six months as well". Crossing the line does not start the clock from that date; it makes the whole period taxable. A narrow relief exists for stays of up to a year by people who neither carry on a trade nor exercise a profession in Austria.

A company is caught on a parallel test. Section 1(2) of the Körperschaftsteuergesetz makes a corporation unlimitedly liable where either its seat or its place of management is in Austria — the two are alternatives, not cumulative — and that liability likewise covers all domestic and foreign income. A GmbH on the Firmenbuch is therefore resident wherever its shareholders live; and a company incorporated abroad but actually directed from Austria has its place of management here and is caught on the same footing.

A foreign company with no Austrian seat and no place of effective management in Austria is not itself Austrian tax-resident, but can still owe Austrian tax on Austria-source income only — for example, profits attributable to an Austrian branch or other permanent establishment. Whether a particular structure creates Austrian-source income depends on the specific facts of that structure.

What This Page Does Not Cover

This page does not state double taxation treaty relief, the mechanics of cross-border group taxation (Gruppenbesteuerung), or anything that depends on the reader's own country of residence — each needs a review of the specific facts, not a general rate.

Austria's network of double taxation treaties can reduce or eliminate the withholding rates above for a recipient resident in a treaty country, but which treaty applies depends on the recipient's country of residence and the exact treaty text, so no rate is stated here. Austria also permits group taxation, letting a parent company offset profits and losses across group members, including some foreign subsidiaries — conditions not checked against an official source here and therefore not stated. Withholding tax on cross-border interest and royalty payments, and municipal or property taxes such as Kommunalsteuer, Grundsteuer, and Grunderwerbsteuer, are also outside this page's scope.

None of the above replaces advice on a specific structure. For a review of how these rules apply to a particular company or individual, see our corporate services.