The annual financial statements are the starting point, not the final calculation. Tax adjustments may add back non-deductible expenditure, recognise different depreciation, restrict losses or exempt certain participation income. The result is the base to which the 23% rate applies — and the rate taxes the company's profit, not necessarily the shareholder's final result.
A simplified example: €100 of taxable corporate profit, distributed directly to an individual shareholder taxed at the standard 27.5% capital-income rate. Treaty relief, foreign tax and corporate-shareholder exemptions can change this.
Illustrative only. This does not determine any particular shareholder's position — a double-tax treaty, EU directive, participation exemption, refund procedure or foreign tax may alter the outcome. If profit is retained rather than distributed, only the 23% company-level tax applies until a distribution is made.
The corporate rate is not progressive — it does not rise with profit. It was reduced in two steps.
Taxable income is not the year-end bank balance. It starts from the accounting result and applies Austrian tax rules. A conceptual map, not a tax return.
Companies with share capital can owe minimum corporate income tax even in a loss year. The formula is 5% of one quarter of the statutory minimum capital per full quarter — for a GmbH or FlexCo on €10,000, that is €125 per quarter, €500 for a full year.
Residence has two separate tests. The registered office is the formal location; the place of management is where decisive management decisions are actually made. An Austrian address does not make management conduct abroad irrelevant — board practice, director location, authority, contracts and substance should be consistent with the intended tax position.
€10,000 minimum capital × 5% = €500 per year (€125 × 4 quarters). It applies even at a loss — the precise figure can depend on formation date, legal form and transitional rules.
Austria permits corporate loss carryforwards, but the 75% limitation means part of a profitable year can remain taxable even with larger historic losses. Example: €400,000 current profit against €500,000 of carried losses.
Historic losses are not an unrestricted tax asset: reconcile them with filed assessments, separate accounting losses from tax losses, and review reorganisations and ownership changes that can restrict use.
Retained earnings are not taxed again merely for sitting on the balance sheet. A second level of tax generally arises on distribution — 27.5% for an individual under the standard capital-income regime; a foreign shareholder's position depends on withholding exemptions, treaty rates, refunds and home-country tax; and a corporate shareholder may qualify for participation relief. A holding analysis should never use the individual-shareholder example as its model.
Foreign income can be taxable for an Austrian-resident company, with treaty relief through exemption, credit or reduced withholding — but the treaty allocates taxing rights, it does not replace domestic analysis. And the 23% is never the whole burden: VAT, wage tax, social security, employer contributions and municipal tax can arise even when profit is low. Plan those cash flows separately, not from one general "tax reserve".
Prepayment based on the applicable assessment and forecast.
Check whether expected annual profit still supports the assessed level.
Mid-year accounts can flag an expected balance before year-end.
The final quarterly payment precedes closing and the annual assessment.
Generally due 30 April of the following year for paper filing, or 30 June for electronic filing via FinanzOnline. Represented taxpayers may receive longer filing periods.
A clean position begins with the bookkeeping, contracts and shareholder transactions recorded throughout the year — not reconstructed in April.
Where was the company actually managed?
Are all material expenses supported?
Were shareholder payments classified correctly?
Are related-party prices defensible?
Does the asset register match tax depreciation?
Are carried-forward losses confirmed against assessments?
Was foreign tax withheld — and is relief documented?
Will profit be retained or distributed?
Do prepayments match the current forecast?
Are the accounts and tax return aligned?
Establish an Austrian GmbH, FlexCo or other suitable corporate form.
Explore formation CapitalMinimum capital and the base for the €500 minimum tax.
Read the article StructureManagement functions, substance and where profit is taxed.
Read the analysisSend the ownership structure, expected revenue, operating costs, financing, countries, management location and intended use of earnings. We identify the Austrian formation and structuring workstreams and coordinate tax-specific questions with a licensed adviser.