Austria GmbH: How to Pay Yourself as a Non-Resident Director (2026)

For non-resident directors, this is more nuanced than it looks. Austria has specific rules about how director compensation is treated, where it's taxed, and what the difference is between a salary and a dividend. Getting this wrong is expensive. Getting it right is straightforward — once you understand the framework.

This guide explains your options, the tax implications of each, and the questions you should ask your accountant before you decide.

As the owner-director of an Austrian GmbH, you have two main mechanisms for extracting money from your company:

1. Geschäftsführervergütung — director's fee / management salary
2. Gewinnausschüttung — dividend / profit distribution

They are taxed differently, processed differently, and have different implications depending on where you live. Most founders end up using a combination of both — but the right balance depends on your personal tax residency, your company's profit level, and your cash flow needs.

Now let's go deeper.

A director's fee is a formal payment from the company to you for your management services. It is a deductible business expense for the GmbH — meaning it reduces the company's taxable profit before the 23% corporate tax is applied.

How it works

The GmbH pays you a regular monthly fee as its managing director. This is documented in your director's service agreement (Geschäftsführervertrag) and processed through payroll.

Tax treatment for non-residents

Non-residents are taxed on income from certain sources in Austria only, at normal Austrian income tax rates.

Austria's income tax system is progressive, with rates ranging from 20% to 55% depending on income level. The tax-free threshold for 2025 is €13,308.

Approximate income tax brackets for 2025:

This is where non-resident directors get surprised. Whether Austrian social security applies to your director's fee depends on where you live and work:

A dividend is a distribution of after-tax company profits to shareholders. The GmbH first pays 23% corporate income tax on its profits, then distributes what remains to shareholders.

Tax treatment for non-residents

Dividends paid to non-residents are subject to Austrian withholding tax of 27.5%. A reduction or relief from withholding tax may be available based on a tax treaty or the EU Parent-Subsidiary Directive.

So the effective tax on dividends for a non-resident individual shareholder:

• Company pays 23% corporate tax on profit
• Remaining profit distributed as dividend
• Austria withholds 27.5% on the dividend at source
• Combined effective rate: approximately 44–45% before any treaty relief

Treaty relief

Austria has double taxation treaties with over 90 countries. Under many of these treaties, the withholding tax on dividends is reduced — typically to 5–15% depending on the treaty and whether the recipient is an individual or a company.

Non-residents may also be liable to pay tax on dividend income in their state of residence. The withholding tax paid in Austria can typically be credited against tax owed in the home country under the applicable treaty.

What this means practically: 

If Austria withholds 15% on your dividend under a treaty, and your home country taxes dividend income at 20%, you typically pay only the 5% difference to your home country — not 20% on top of 15%.

The key advantage of dividends

No social security. Dividends are not employment income and do not trigger social security contributions in Austria. For founders who want to minimise social security exposure, dividends are structurally cleaner — though they come with the double taxation of profit (corporate tax + withholding tax).

The most common structure in practice: a modest director's fee plus annual dividends.
A low monthly director's fee — say €1,500–3,000/month — achieves two things: it reduces the company's taxable profit, and it provides regular income. The fee is set low enough to avoid triggering significant Austrian income tax or social security complications.

At year end, remaining profits are distributed as dividends. The withholding tax is credited against tax owed in the home country under the applicable treaty.

This is not a one-size-fits-all solution. The right balance depends on:

• Your country of tax residency
• Whether a tax treaty with Austria applies and at what rate
• Whether your home country taxes global income or only local income
• Your personal income needs vs reinvestment plans

One issue that is increasingly relevant for non-resident GmbH owners: where decisions are actually made.

The place of management of a corporation is deemed to be where the corporation's senior management makes its executive decisions. Important elements for determining this place include the residency of board members and the location of board meetings.

If you are the sole director and you live in Germany, and all your management decisions are made in Germany — Austrian tax authorities (and German ones) may argue that the company's effective place of management is Germany, not Austria. This can trigger German corporate tax liability on the Austrian company's profits.

This is not hypothetical. It happens. The solution is to ensure genuine Austrian substance: local accountant, local registered address, board meetings documented in Austria, and ideally some real operational activity in Austria.

Paying yourself from an Austrian GmbH as a non-resident is not complicated in principle. Director's fee reduces company tax but creates personal income tax. Dividends come after corporate tax but avoid social security. Most founders use both.

What makes it complicated is the interaction with your home country's tax rules, the applicable treaty, and the substance question. These are solvable — but they require proper advice, not assumptions.

The good news: Austria's tax treaty network is extensive, rates are competitive, and the framework is predictable. Once structured correctly, it runs on autopilot.