The main sources of international tax law in Austria can be summarised in three categories:

• domestic rules dealing with international tax law matters, generally referred to in Austria as “foreign tax law” (Außensteuerrecht);
• international law, of which double taxation treaties (DTTs) are the most important example; and
• EU law.

Domestic provisions dealing with international tax law matters (Außensteuerrecht) are not codified in a single law; rather, the individual provisions can be found throughout the various tax laws. For example:

• rules on determining foreign income and recognising foreign losses can be found in the Income Tax Act;
• rules on distributing dividends between international intercompany shareholdings can be found in the Corporate Income Tax Act; and
• rules on granting potential unilateral relief from double taxation can be found in the Federal Fiscal Code, etc.

Under Austrian federal constitutional rules, where international treaties are accessible for direct application within the domestic legal system (as is the case with DTTs), the process of transformation – ie, incorporation into domestic law – is carried out through what is known as the “general transformation of international law”. This means that transformation occurs without the need to specifically implement the DTT into domestic law through the enactment of further legislation.

International tax law cases are adjudicated by Austrian courts – in particular, the Federal Fiscal Court and, on appeal, the Supreme Administrative Court. In their roles, the courts provide authoritative interpretation of the applicable sources of international tax law. Where a case involves the application of EU law, the jurisprudence of the CJEU may also provide (binding) guidance for the (EU-conforming) interpretation of the respective legal sources.

Additionally, the Austrian Ministry of Finance (MoF) issues extensive administrative guidelines on international tax law matters, including so-called “Express Reply Services” (EAS), which provide (non-binding) opinions of the MoF on specific requests relating to international tax law. While not legally binding on the requesting taxpayer or the tax authorities, these opinions are highly influential in practice.

Austria maintains an extensive treaty network, having concluded more than 90 DTTs. Most of Austria’s treaties are based on the OECD Model Tax Convention and follow the standard allocation of taxing rights, with certain minor modifications.

In general, tax treaties have the status of ordinary legislation in the Austrian legal system and are therefore equal in rank to domestic laws. However, based on the principles of lex posterior (newer laws prevail over older ones) and lex specialis (more specific laws prevail over general ones), tax treaties generally take precedence over domestic tax provisions.

While conflicts (ie, treaty override) may technically arise when domestic legislation is introduced subsequent to a treaty, in practice the tax authorities and courts aim for a harmonious interpretation that avoids open conflict between treaty law and domestic law.

EU law holds a special position, as it takes precedence over domestic law in areas covered by the EU treaties and directives. This means that domestic rules must be interpreted and applied in conformity with EU law, and, where necessary, domestic provisions may be overridden to comply with EU law.

Austria’s tax treaties generally follow the OECD Model Tax Convention, with certain minor modifications.

In June 2017, Austria signed the Multilateral Instrument (MLI), and in September 2017 it deposited its instrument of ratification with the OECD. The MLI came into force in Austria on 1 July 2018.

Austria has no territorial tax regime; instead, it applies a worldwide income taxation principle for residents (unlimited tax liability), while non-residents are only taxed on Austrian-source income (limited tax liability).

Individuals are considered tax-resident in Austria if they have a dwelling available for personal use or a habitual abode in Austria, which is deemed to be the case after a six-month stay in Austria in a calendar year.

Nationality generally does not play a role in determining tax residence under Austrian law. However, it may serve as a (final) indicator under a DTT in cases of doubt.

In practice, the “centre of vital interest” of an individual is a criterion that is often used to determine their tax residence when they are deemed a resident of both Austria and another state under a DTT. The centre of vital interest is generally understood to be where an individual has their closest personal and economic ties (ie, family, friends, work, etc), with the personal ties generally being of higher relevance.

Under general rules, a secondary residence in Austria would also suffice to establish tax residence and unlimited tax liability in Austria. However, the Regulation on Domestic Secondary Residences (Zweitwohnsitz-Verordnung) sets out special rules for individuals whose centre of vital interest has been located outside Austria for more than five years. In such cases, unlimited tax liability arises only in years in which the secondary residence is used for more than 70 days; otherwise, the individual is subject only to limited tax liability. A central prerequisite for these rules to apply is that the individual keeps records of the days the Austrian secondary residence is used. Correspondingly, the individual can choose not to make use of this Regulation by not keeping records, in which case they are subject to unlimited tax liability.

Tax-resident individuals are subject to unlimited tax liability, meaning they are taxed on their worldwide income. Austria applies a progressive income tax rate to most categories of income, whereas certain types of income, such as capital income, may be subject to flat tax rates.

The progressive tax rates for 2026 are as follows:

• up to EUR13,539 – 0% tax rate;
• EUR13,539 to EUR21,992 – 20% tax rate;
• EUR21,992 to EUR36,458 – 30% tax rate;
• EUR36,458 to EUR70,365 – 40% tax rate;
• EUR70,365 to EUR104,859 – 48% tax rate;
• EUR104,859 to EUR1 million – 50% tax rate; and
• more than EUR1 million – 55% tax rate (until 2029).

Although income of resident individuals is subject to worldwide taxation, relief mechanisms exist to avoid double taxation of foreign-source income (eg, income attributable to foreign permanent establishments). Such relief mechanisms can be broadly summarised into these categories.

• Relief under bilateral agreements (DTTs), where, depending on the type of income concerned, the applicable DTT may provide for an exemption (with progression) or for a credit of the foreign tax against Austrian tax.
• Relief under unilateral domestic measures, primarily through crediting of foreign taxes where no relief under a DTT is available.
• Relief under EU law, where EU directives and fundamental freedoms may require relief from double taxation or the deductibility of certain expenses. That said, EU directives would typically already be transposed into Austrian tax law (eg, the Parent-Subsidiary Directive, implemented under Section 10 of the Corporate Income Tax Act), in which case the respective domestic provisions would apply directly.

Non-resident individuals are taxed only on their Austrian income – ie, income from Austrian sources (limited tax liability). Whether income is considered Austrian is determined exclusively under Austrian tax law.

The types of income that are subject to limited tax liability are exhaustively defined in Section 98 of the Income Tax Act. These include:

• income from agriculture and forestry carried on in Austria;
• income from independent personal services exercised or exploited in Austria;
• business income where a permanent establishment is maintained in Austria, a dependent agent is appointed or Austrian immovable property is involved;
• employment income exercised or exploited in Austria, as well as remuneration paid out of Austrian public funds;
• certain types of capital income;
• income from letting and leasing of Austrian immovable property or rights registered in Austrian public registers; and
• capital gains from the disposal of Austrian real estate.

As a general rule, Austrian-source income of non-residents is taxed at the ordinary progressive income tax rates (see 2.3 Taxation of Resident Individuals). However, for the purpose of rate calculation, an additional amount of EUR11,077 (as of 2026) is added to the taxable income of non-residents. The reason for this adjustment is that, from an Austrian tax perspective, the standard tax-free minimum (EUR13,539 in 2026) should not be recognised for non-residents by Austria, but rather by the individual’s state of residence. As a result, non-residents effectively retain a basic tax-free income of EUR2,462 in Austria.

Depending on the type of income, taxation of non-residents may be carried out through payroll withholding tax (for employment income), capital gains withholding tax (for certain capital income), the “non-resident withholding tax” for specific types of income, or by assessment.

In particular, income subject to the non-resident withholding tax (Section 99 of the Income Tax Act) includes:

• income from independent personal services as an author, lecturer, entertainer, architect, sportsperson, artist or participant in an entertainment performance, if the activities are performed or exploited in Austria;
• profits from cross-border multi-tiered transparent partnerships where the recipients are not disclosed;
• royalties and fees for the use of know-how;
• directors’ fees;
• income from commercial or technical consultancy services;
• income from cross-border hiring out of labour;
• distributions or deemed distributions from real estate funds, if the real estate is located in Austria under the condition of public-placement; and
• income from dormant partnerships.

Under Austrian tax law, a legal entity (ie, a corporation) qualifies as tax-resident if either its registered seat or its place of management is located in Austria. The registered seat of a corporation is deemed to be located at the place stipulated in the articles of association and registered in the commercial register. The place of management is deemed to be where the corporation’s management makes its executive day-to-day management decisions. Earlier practice concentrated primarily on where the relevant decisions are taken (for example, as evidenced by board minutes), but the Austrian tax authorities now increasingly also consider where such decisions are communicated and implemented by the management. Resident corporations are subject to unlimited tax liability in Austria.

Under the majority of Austria’s DTTs, the place of effective management is decisive in the case of the dual residence of a corporation (the “tie-breaker rule”). In practice, no substantive distinction is generally made between the domestic term “place of management” and “place of effective management” under treaty law, whereas a corporation can only have one place of effective management under a DTT.

An Austrian permanent establishment (PE) is defined under domestic tax law as a fixed place where a business is carried out. In particular, this includes:

• the place where the management is carried out (ie, a place of management);
• branches, warehouses, purchasing and sales offices, and other establishments used by the entrepreneur or a permanent representative to carry on the business; or
• construction or installation sites that last, or are expected to last, more than six months.

Austrian tax authorities generally follow the OECD Model Tax Convention and its Commentary when interpreting the PE concept. Most recently, following the 2025 update to the OECD Commentary, the Austrian MoF confirmed that the new Commentary is applicable in Austria, which is particularly relevant for home-office PE cases.

However, deviations in the PE definition may arise under certain DTTs (eg, few DTTs include provisions regarding the establishment of a service PE). Additionally, the domestic PE concept may be considered broader than the PE as defined under the OECD Model Tax Convention, since auxiliary or preparatory establishments (Hilfsbetriebsstätten) are not generally excluded under Austrian law. This means that a PE under the OECD Model Tax Convention will always constitute a PE under the Austrian definition, but not vice versa.       

In Austria, income from immovable property (rental income and capital gains derived from the sale of immovable property) is taxable for both residents and non-residents, as follows.

Residents

Rental income is taxed as part of the individual’s annual taxable income, which is subject to the progressive income tax rates. Expenses incurred in generating the rental income are generally deductible, whereas specific rules may apply, in particular to depreciation of buildings as well as to renovation and maintenance costs. The net rental result is taxed together with the individual’s other taxable income in the annual income tax assessment.

Technically, adhering to the worldwide taxation principle, rental income from non-Austrian immovable property is also subject to tax in Austria for resident individuals (and corporations). However, where a DTT is applicable, the right to tax such rental income is typically assigned to the state in which the immovable property is located.

Capital gains derived from the disposal of immovable property (real estate capital gains) are generally subject to a special tax rate of 30%; in this case, the gain is taxed separately and does not form part of the individual’s regular income tax assessment. However, the individual may opt to have the gain taxed at the standard progressive income tax rates instead.

For resident corporations, rental income from immovable property is subject to the standard corporate income tax rate of 23%. The same applies to real estate capital gains, which are likewise taxed at the corporate income tax rate of 23%.

For corporations, income from immovable property is assessed exclusively via assessment within the corporate income tax return (unlike in the case of individuals, where a self-calculation mechanism may apply for real estate capital gains).

Non-Residents

Non-resident individuals are generally required to file an income tax return if their taxable Austrian-source income exceeds EUR2,462, unless a withholding tax has been applied that represents the final settlement of the tax liability. In the case of rental income from immovable property, no withholding tax is typically levied (unlike, for example, royalties and fees for the use of know-how). Consequently, any tax due on such rental income from immovable property that is located in Austria is generally collected via the regular assessment procedure.

Capital gains derived from the disposal of Austrian immovable property (real estate capital gains) are subject to a special tax rate of 30%. However, non-resident individuals also have the option of having the gain taxed at the standard progressive income tax rates via assessment.

For non-resident corporations, rental income as well as real estate capital gains derived from Austrian immovable property are taxed at the standard corporate income tax rate of 23%.

Business profits are taxable in Austria, with a distinction drawn between individuals (subject to the progressive income tax rates) and corporate entities (subject to the corporate income tax rate of 23%). Partnerships are treated as tax-transparent for income tax purposes. Therefore, profits are allocated to the partners and taxed at their level, either at progressive income tax rates (for individual partners) or at 23% corporate income tax rate (for corporate partners). Some distinctions can, however, be made between residents and non-residents, as follows.

Residents

Business profits derived by individuals are subject to the progressive income tax rates and are taxed together with the individual’s other taxable income in the annual income tax assessment.

In general, profits for small businesses (with annual turnover up to EUR700,000) and certain freelance professionals (eg, lawyers, tax advisers, artists and medical doctors) are determined on a cash basis, whereas larger businesses calculate their profits using the accrual accounting method.

Business profits derived by corporations are subject to the corporate income tax rate of 23% and are taxed as part of the annual corporate income tax assessment (regardless of whether profits are retained or distributed).

Non-Residents

With regard to business profits derived by non-resident individuals, a sufficient nexus to Austria is generally required. In principle, non-residents are taxed on business/commercial income only if the activity is carried out through an Austrian PE, through a dependent agent in Austria or in connection with Austrian immovable property. Certain categories of income form exceptions and are taxable even without the mentioned nexuses, such as income from technical advisory services, cross-border hiring out of labour, and income derived by artists or sportspersons.

Non-resident individuals are generally required to file an income tax return in respect of Austrian-source business profits if their taxable Austrian-source income exceeds EUR2,462, unless a withholding tax has been applied that constitutes a final settlement of the tax liability (see 2.4 Taxation of Non-Resident Individuals).

Non-resident corporations are subject to limited tax liability in Austria with respect to any Austrian-source business income (ie, unlike for individuals, there is no minimum income threshold), typically where the business is carried on through an Austrian PE. Such profits are subject to a corporate income tax rate of 23% and are generally collected via assessment, unless specific withholding rules apply (see 2.4 Taxation of Non-Resident Individuals).

Dividends

The withholding tax (WHT) is principally levied on dividends at the applicable tax rate for individuals (27.5%) or corporations (23%).

EU corporations that are subject to a limited tax liability benefit from the EU Parent-Subsidiary Directive, under which they may obtain a 100% tax exemption for dividends.

There is no obligation to withhold and pay WHT in Austria (so-called relief at source) if:

• a profit distribution is made by an Austrian corporation;
• the EU recipient corporation (parent company) has a form listed in the Directive;
• the EU recipient corporation holds at least 10% of the share capital of the Austrian subsidiary; and
• a minimum holding period of one year is observed.

There is nevertheless an obligation to withhold and pay WHT in Austria if there are reasons to suspect abuse. Abuse is assumed, in particular, if the EU recipient corporation has no function and its sole purpose is to avoid Austrian WHT. In order to rule out such a suspicion of abuse, the EU recipient corporation must submit a written declaration to the Austrian corporation that it carries out an activity that goes beyond the scope of asset management, employs its own staff and has its own business premises (so-called proof of substance). These declarations must be submitted on a form provided by the Austrian Federal Ministry of Finance. On this form, a certificate of residence of the EU recipient corporation must also be obtained from the competent EU tax office promptly after the profit distribution.

If proof of substance cannot be provided by the EU recipient corporation (which will often be the case with a holding company or an acquisition vehicle), relief at source is generally not possible and the Austrian corporation would have to withhold WHT on the distribution and pay it to the Austrian tax office. The EU recipient corporation would then still have the option of applying to the Austrian tax office for a refund of the WHT from the following year. In such a refund procedure, the Austrian tax office would check whether there actually is abuse, or whether the conditions for an exemption from WHT are met and therefore the WHT should be refunded to the EU recipient corporation. As soon as a refund is granted, relief at source can subsequently be granted for three years under certain conditions (ie, for distributions of a similar size and provided that the foreign holding structure remained unchanged).

The dividend WHT can also be reduced at source under the applicable DTTs in accordance with the formal requirements laid down in the DTT Relief Regulation (Doppelbesteuerungsabkommen-Entlastungsverordnung). A recipient seeking to reduce the dividend WHT will have to provide a certificate of residence issued on Austrian forms “ZS-QU1” (for individuals) or “ZS-QU2” (for legal entities). Legal entities must also satisfy the relevant substance requirements as previously mentioned. The DTT Relief Regulation limits the dividend WHT exemption at source in certain cases – for example, foreign foundations, trusts and investment funds do not qualify for dividend WHT exemption at source. 

Austrian corporate income tax law further includes a special provision that allows a foreign entity to apply for a refund of the total Austrian WHT – including the share of WHT that Austria is entitled to tax under the relevant DTTs – if the foreign entity is unable to credit the Austrian WHT in its country of residence (eg, because the dividend income is exempt).

At the EU level, further provisions and limitations regarding WHT are expected under the FASTER Directive (effective from 1 January 2030), which should contribute to streamlining refunds for listed dividends.

Royalties

Royalties paid to non-residents are generally subject to a 20% WHT. A reduction or full exemption may be available under a DTT or the EU Interest and Royalties Directive. The procedures for claiming relief or a refund follow the same process as for dividends.

Interest

There is no WHT applicable to interest paid to non-resident corporations, unlike interest paid to non-resident individuals. Specifically, interest accrued on Austrian bank deposits or Austrian bonds received by non-resident individuals, where the paying or depositary agent is located in Austria, is subject to WHT at a rate of 25% (or 27.5% in the case of Austrian bonds).

Capital Gains Derived by Individuals

Capital gains (and losses) arising from the sale or disposal of business assets are taxed as ordinary business income.

Where shares are part of the private assets of an individual, capital gains resulting from the sale of shares, securities or other financial assets are taxed at a flat tax rate of 27.5% (the same rate applicable to other capital income such as dividends). Capital gains on the sale of shares are also taxed at this flat tax rate if the individual’s stake is below 1%.

Capital Gains Derived by Corporations

Capital gains (and losses) realised on assets of an Austrian corporation are taxable at the statutory corporate income tax rate of 23%, unless it concerns a capital gain on a shareholding that meets the requirements for the participation exemption to be applied.

Under the international participation exemption, capital gains and dividend income from qualified shareholdings are fully exempt from the Austrian corporate income tax base (a participation amount of at least 10% and an uninterrupted holding period of at least one year are required).

Under the domestic participation exemption, profit distributions of domestic corporations are exempt from taxation, and this exemption applies without any minimum holding requirements and holding periods. However, capital gains realised on the alienation of shares in domestic corporations are subject to regular taxation.

For the taxation of capital gains derived from the sale of immovable property, please see 3.1 Income From Immovable Property.

Income from employment is generally taxed at the standard progressive income tax rates. Certain bonus payments may, however, be taxed at reduced rates under specific conditions (eg, holiday and Christmas bonus salary payments).

The taxation of employment income from assignments or cross-border employment generally depends on the duration of the assignment and the applicable DTT. Inbound cross-border employees (ie, individuals who work in Austria but are tax-resident in another state) are generally subject to limited tax liability in Austria under the rules described in 2.4 Taxation of Non-Resident Individuals. In practice, this means that Austrian income tax is levied only on the income earned from work performed in Austria, while earnings from employment performed in other states are not taken into account. As employee assignments regularly involve cross-border tax obligations, Austria has also enacted a regulation that sets out the rules for WHT relief for the assignment of personnel (Verordnung zur Abzugsteuerentlastung bei Arbeitskräftegestellung).

As most Austrian DTTs follow the OECD Model Tax Convention, employment income will be taxable in Austria for non-resident employees if either:

• the work is performed in Austria for more than 183 days in a 12-month period; or
• the remuneration is paid by or borne by an Austrian employer or an Austrian PE.

It should be noted that, for these purposes, Austria disregards whether the income is paid by the foreign civil law employer to the employee, and instead considers whether, from an economic perspective, the Austrian employer ultimately bears such remuneration.

Austria has concluded special regulations for cross-border workers in certain DTTs (Germany, Liechtenstein and Italy). In these cases, the special provisions of the respective DTTs must be taken into account. Typically, this results in individuals qualifying as cross-border workers under the relevant DTTs being taxed in their country of residence, regardless of the general rules under which Austria may have had the right to tax income from work performed on its territory.

Austria has not adopted specific legislation addressing the tax consequences of remote work. That said, the consequences and risks of remote working are essentially covered by existing Austrian tax law, which generally provides that, when interpreting tax law, the true economic substance of the facts is decisive. Furthermore, the implications of remote working are often addressed in administrative guidelines, rather than through new legislation. For instance, the Austrian transfer pricing guidelines include provisions for home office PE arrangements. Recently, the Austrian MoF confirmed in a written notice the full applicability of the updated OECD Commentary regarding remote work and home office arrangements.

The Austrian Income Tax Act differentiates between seven types of income sources:

• income from agriculture and forestry;
• income from self-employment;
• business income;
• employment income;
• income from capital;
• income from letting and leasing; and
• other income defined under the Austrian Income Tax Act.

Income derived from these categories can generally be subsumed under the provisions of the OECD Model Tax Convention – ie, Austria does not provide for different types of income not addressed within the OECD Model Tax Convention. In cases where certain income taxed under Austrian tax law does not clearly fall within the distributive rules of the OECD Model Tax Convention (eg, annuity payments from private life insurance policies), such income is typically treated as falling within Article 21 of the OECD Model Convention (Other Income).

Austria has not (yet) implemented the Streamlined Approach for baseline marketing and distribution activities (Amount B) into its domestic law. Therefore, the rules relating to Amount B will not apply to baseline marketing and distribution activities in Austria. However, Austria is committed to accepting the outcome of applying Amount B to such activities in covered jurisdictions with which it has a DTT. The list of these covered jurisdictions is published and maintained by the OECD.

In general, the Austrian government has consistently supported the BEPS project at all times, which includes Pillar One Amount A, having agreed to the 2021 “Two-Pillar Solution” and authorising negotiations for a multilateral convention (MLC) in 2022.

The Austrian MoF has published its draft for a Pillar Two implementation law, the Austrian Minimum Taxation Act (Mindestbesteuerungsgesetz), which came into force on 31 December 2023. However, the Undertaxed Profit Rule (UTPR) (Sekundäre Ergänzungssteuer) largely only applied to financial years beginning on or after 31 December 2024.

The Austrian implementation of Pillar Two is based on the EU Pillar Two Directive (2022/2523), which in turn builds on the OECD Global Anti‑Base Erosion (GloBE) Model Rules – ie, there are no notable deviations from the OECD framework, apart from minor deviations in the specific design of the implementation and its application (eg, Austria implemented Pillar Two by means of a separate law rather than amending the Austrian Corporate Income Tax Act).

Austria already took unilateral action on digital taxation in 2019 by introducing the Digital Tax Act (Digitalsteuergesetz). This legislation imposes a 5% tax on online advertising services provided for consideration within Austria, but only for corporations surpassing defined turnover thresholds from such services.

Tax fraud and tax evasion constitute distinct fiscal criminal offences that are punishable under the Austrian Fiscal Criminal Act, provided that the respective criminal offence elements are fulfilled.

Tax Evasion

Tax evasion is defined in Section 33 of the Austrian Fiscal Criminal Act and comprises several alternative offence variants, whereas all variants share the requirement of intent (either conditional intent or knowledge) and a reduction of taxes, which may also be only temporary. According to this Section 33, tax evasion occurs:

• where a person intentionally reduces taxes by violating fiscal obligations of notification, disclosure or truthfulness;
• where a person intentionally causes a reduction of VAT by failing to submit advance notifications under Section 21 of the VAT Act, or causes a reduction of wage tax, the employer’s contribution to the Family Burden Equalisation Fund, or related surcharges by breaching payroll record obligations under Section 76 of the Income Tax Act and related regulations;
• where a person intentionally causes a reduction of taxes by using goods for which preferential tax treatment was granted for purposes other than those qualifying for such treatment without prior notification to the tax authority; or
• where a person wrongfully declares losses.

The latter offence variant was only recently introduced by the Fraud Prevention Act 2025 (Betrugsbekämpfungsgesetz, BBKG 2025) on 1 January 2026. Previously – ie, before 2026 – if an excessive loss was declared in a given tax year, the declaration itself was not punishable because no tax reduction had yet occurred, meaning that criminal liability could arise only in a subsequent year if the unjustified loss declaration resulted in a reduction of tax payable in that later period.

Tax Fraud

Tax fraud is regarded as a qualified form of tax evasion and is defined in Section 39 of the Austrian Fiscal Criminal Act. It applies where a person commits tax evasion, smuggling, evasion of import or export duties, or duty fencing under Section 37 of the Act, and the imposition of penalties is exclusively reserved to the courts (ie, the offence is committed with (conditional) intent and the evaded value exceeds EUR150,000) and the offence is committed by using one of the following methods:

• the use of false or falsified documents, data or other evidence, with the exception of untrue tax declarations, registrations, notifications, records and determinations of taxable income required under tax, monopoly or customs law;
• the use of fictitious transactions or other fictitious acts (Section 23 of the Federal Fiscal Code); or
• manipulation of computer-generated books or records required under tax or monopoly law through the design or use of software capable of altering, deleting or suppressing data.

Anti-Tax Avoidance and Anti-Abuse Rules

Austrian anti-tax avoidance and anti-abuse rules have to be distinguished from offences under criminal tax law, as they constitute overarching principles inherent to Austrian tax law. In particular, these rules do not themselves establish a criminal offence, nor may the intent to circumvent them (automatically) be equated with the intent required for tax evasion or tax fraud under the Fiscal Criminal Act. The main anti-avoidance rules in Austria are set out in the Austrian Federal Fiscal Code.

Section 22 of the Federal Fiscal Code provides for the main general anti-avoidance rule that applies in the case of abusive tax structures, which is the case where a legal structure only makes sense when taking into account the related tax-saving effect, given that the main purpose or one of the main purposes is to obtain a tax advantage that defeats the object or purpose of the applicable tax law.

According to the administrative guidelines, abuse is generally presumed only in multi-step schemes and can be rebutted with valid economic reasons. Nonetheless, it is considered that an abuse within the meaning of Section 22 of the Federal Fiscal Code, in conjunction with Section 44 of the Reorganisation Tax Act as amended by the 2018 Annual Tax Act, must, in principle, be assessed regardless of whether a specific objective is achieved through a single reorganisation step or a multi-step process. In this regard, the 2018 Annual Tax Act introduced a statutory definition of Section 22 of the Federal Fiscal Code in line with the EU Anti-Tax Avoidance Directive (ATAD), applicable to arrangements from 1 January 2019, under which an arrangement is deemed abusive if its essential purpose is to secure a tax advantage contrary to the law, unless valid economic reasons exist.

Practically speaking, Section 23 of the Austrian Federal Fiscal Code is applied less frequently than Section 22, but it states that transactions or acts that are not genuinely intended by the parties involved (“sham transactions”), performed solely to conceal facts relevant for taxation purposes, will be disregarded and taxation will be based on the true facts that the taxpayer sought to conceal.

In addition, Section 21 of the Austrian Federal Fiscal Code can be considered as another general anti-avoidance rule that provides for the “substance over form” approach. Per this approach, the economic substance of facts and circumstances – rather than their formal appearance – is to be taken into consideration when assessing tax questions.

Furthermore, due to Austria’s participation in the MLI, the proportion of general anti-abuse rules (GAARs) in Austrian DTTs has gradually increased, especially since the inclusion of a GAAR under Article 6 MLI is part of the “minimum standard” and must therefore be included in all DTTs for which the respective contracting states have opted to apply the MLI.

Beyond the previously mentioned provisions contained in the Austrian Fiscal Criminal Act and the GAAR under the Austrian Federal Fiscal Code (see 5.1 Definition and Identification of Tax Fraud, Evasion, Tax Avoidance and Abusive Schemes), Austrian tax law has been heavily influenced by the OECD’s efforts to combat BEPS. Hence, Austrian tax law contains several additional anti-avoidance measures – some of which implement the OECD’s recommendations and EU directives – generally designed to combat and reduce the attractiveness of abusive tax structures by limiting the tax advantages that might otherwise arise. In particular, these include the following.

• The non-deductibility of interest that is not at arm’s length.
• The non-deductibility of interest paid to associated companies in low-tax jurisdictions (tax level below 15%).
• The non-deductibility of interest on loans taken out for the acquisition of a participation in another associated company.
• The inclusion of Controlled Foreign Company (CFC) rules.
• The switch-over from the exemption method to the credit method in the case of dividends distributed from low-taxed subsidiaries (tax level below 15%) to Austria, if the main source of income of the low-tax foreign entity stems from passive income – whereas this rule will not apply if the CFC rules already apply.
• The denial of relief at source for WHT in cases of potential tax avoidance (eg, companies with little or no substance).
• The implementation of the ATAD and the OECD’s recommendations to combat BEPS, some of which have already been mentioned (such as the CFC and GAAR rules), but also including, for example:
1. mandatory disclosure rules for certain cross-border arrangements (DAC6);
2. hybrid mismatch rules;
3. an interest limitation rule in line with ATAD, limiting the deductibility of interest to 30% of tax EBITDA when debt leverage exceeds the group average – whereas several key exceptions exist (EUR3 million de minimis, standalone entities, loans prior to 17 June 2016, equity test based on consolidated accounting); and
4. incorporating the global minimum tax rules (Pillar Two) into national law (Minimum Taxation Act).

Moreover, Austrian tax law contains exit taxation rules for individuals as well as for corporations that apply whenever Austria’s right to tax hidden reserves acquired in Austria is restricted or forfeited.

Austria generally follows the EU list of non-cooperative jurisdictions for tax purposes, commonly referred to as the “EU blacklist”, which includes jurisdictions that are assessed on the basis of a number of criteria established by the European Council, including tax transparency, fair taxation and the implementation of international standards aimed at preventing BEPS.

For Austrian companies, the EU blacklist is particularly relevant for the (blanket) classification of foreign subsidiaries as low-taxed for the purposes of the CFC rules, for reporting obligations under DAC6 in the case of certain cross-border intra-group payments to associated companies resident in such jurisdictions, and for the publication of country-by-country public tax reports (CbCR).

Following the most recent update of the list in February 2026, Fiji, Samoa, and Trinidad and Tobago have been removed from the list, while Vietnam and the Turks and Caicos Islands have been added to the list., so that the EU blacklist currently comprises ten jurisdictions:

• American Samoa;
• Anguilla;
• Guam;
• Palau;
• Panama;
• Russian Federation;
• Turks and Caicos Islands;
• US Virgin Islands;
• Vanuatu; and
• Vietnam.

Austria implements several mandatory reporting obligations, including as follows.

Reporting of certain cross-border arrangements is required by the Austrian EU Reporting Requirement Act (EU-Meldepflichtgesetz), through which DAC6 was transposed into national law.

Reporting is required for arrangements that pose a risk of tax avoidance, CRS circumvention, or obscuring beneficial ownership, if the first step occurred either between 25 June 2018 and 30 June 2020 or from 1 July 2020 onwards.

Responsibility for reporting generally falls to intermediaries (including those who design, market, organise, make available or manage the arrangement), although certain professionals (notaries, attorneys-at-law, certified public auditors and certified public tax advisers) may be exempt.

Arrangements are classified as either mandatory (reported regardless of tax advantage) or conditional (reported only if a main benefit is a tax advantage).

Additionally, Austria implements transfer pricing reporting standards (including CbCR), which have been updated and amended recently by the Austrian Transfer Pricing Documentation Act and published guidelines from the Austrian tax administration.

As part of the implementation of EU Directive 2021/2101, there are also reporting obligations for financial years beginning after 21 June 2024, for the purposes of “public CbCR” (CbCR-Veröffentlichungsgesetz).

More recently, Austria has implemented DAC8 (EU Directive 2023/2226), introducing the automatic exchange of information on crypto-asset income in line with the OECD reporting framework. This includes the adoption of a new Crypto Reporting Obligations Act (Krypto-Meldepflichtgesetz) and amendments to existing federal laws, including the Common Reporting Standard Act and the EU Mutual Assistance Act. From 1 January 2026, crypto-asset service providers will be subject to enhanced reporting, due diligence and registration obligations, with transaction data to be reported to the competent authorities in the following year (for 2026 by 31 July 2027).

Austrian tax law also includes a provision that enables the tax authorities to request from an Austrian interest payer the disclosure of the true economic recipient of the interest payments to ensure that tax-reducing payments at the payer’s level correspond to taxable income at the recipient’s level. In the case of non-compliance, the deductibility of the interest paid may be denied and further corporate income tax surcharges may be imposed.

Beyond the reporting obligations, Austrian tax law provides for a highly relevant voluntary self-disclosure provision incorporated under the Austrian Fiscal Criminal Act, which enables taxpayers to avoid criminal penalties for tax offences by proactively disclosing misconduct (and to pay the tax owed) before tax authorities detect or initiate proceedings.

The Austrian tax authorities have extensive powers to detect and investigate tax fraud and evasion. The most important tools in practice are tax audits, which take place relatively regularly (every few years), whereas there is no fixed audit cycle prescribed under Austrian tax law. Taxpayers may be selected at random for a tax audit; however, if there are significant discrepancies between tax returns submitted in individual years, the likelihood of being selected increases.

During a tax audit and/or investigation, the tax authorities are entitled to review the taxpayer’s accounting records, books and supporting documentation, and may request further information from the taxpayer. In this context, a particular role is played by the Austrian Fiscal Police, which operates as a specialised unit on behalf of the tax authorities. The Fiscal Police will typically become involved where immediate action is required – eg, in situations where information must be obtained without delay. Accordingly, they may be authorised to enter the taxpayer’s premises, verify identities, question third parties (eg, employers, business partners, banks, etc) and carry out seizures. However, the Fiscal Police will not conduct a “regular” tax audit themselves; these are generally carried out by the audit units of the relevant tax office.

In this respect, it is important to distinguish between the type of tax audit concerned:

• “regular” tax audits as part of the administrative proceedings, which may apply to every taxpayer; and
• fiscal criminal audits that are only carried out where there is an indication of a fiscal criminal offence.

In general, taxpayers are required to co-operate during a “regular” tax audit, especially in cross-border situations where the obligation to co-operate is increased. However, during a tax audit under fiscal criminal law or tax investigations relating to criminal proceedings concerning tax offences, the taxpayer (ie, the accused person) is under no obligation to co-operate with the tax authorities.

Impermissible tax avoidance – whether arising from cross-border transactions or purely domestic situations – may generally result in a reassessment of the tax liability, leading to the assessment of the amount of tax that would have been due had the abusive structure not been implemented (plus any applicable surcharges, penalties and interest).

That said, certain provisions are particularly relevant in a cross-border context – including, for instance, the arm’s length principle under Austrian transfer pricing rules, which may limit deductible expenses or lead to an upward adjustment of the tax base, as well as sanctions for violations of reporting obligations under the Austrian implementation rules of DAC6, which applies for certain cross-border arrangements.

It may also be worth noting that international activities such as reorganisations, intra-group cross-border transactions and transfer pricing matters are often given more attention during tax audits, inter alia due to international efforts to combat tax evasion and prevent BEPS.

The competent tax offices are responsible for imposing and enforcing such measures – eg, reassessment of taxes due. In the event of an appeal by the taxpayer, the case falls within the jurisdiction of the Federal Fiscal Court, which may assess taxes due plus penalty surcharges. Importantly, however, a distinction must be made between cases of impermissible tax avoidance or tax offences below the threshold of fiscal criminal law on the one hand, and fiscal criminal proceedings on the other hand. The latter are covered in 6.2 Criminal Penalties and 6.3 Interaction Between Tax and Criminal Procedures.

Austrian criminal tax law distinguishes between two types of fiscal criminal proceedings:

• administrative fiscal criminal proceedings (ie, tax authorities deal with the case); and
• judicial fiscal criminal proceedings (ie, the case falls within the jurisdiction of the criminal courts).

As a general rule, the competence depends on the seriousness of the offence. Less severe cases fall within the jurisdiction of the tax authorities acting as fiscal criminal authorities, whereas more serious offences are dealt with by the ordinary criminal courts. In particular, the tax authorities are competent in cases involving negligent conduct as well as intentional offences where the amount of evaded tax does not exceed EUR150,000. By contrast, the ordinary courts have jurisdiction over intentional offences where the evaded tax exceeds EUR150,000 and over certain aggravated offences, such as cases involving cross-border VAT fraud.

Depending on the circumstances, a case may be transferred from the tax authorities to the courts or vice versa, which may occur, for example, where additional offences come to light or where the initially assumed threshold for court jurisdiction is subsequently not met.

Tax evasion is punishable by a monetary fine of up to 200% of the tax amount evaded (or unjustified tax credits). In cases of wrongfully declared losses, the relevant amount of tax evaded corresponds to the tax that would result from applying the applicable tax rate to the absolute amount of the improperly declared loss. For example, if a taxpayer incurs a legitimate loss of EUR20,000 and increases this loss to a total of EUR60,000 by unlawfully claiming additional expenses, the absolute amount of EUR40,000 is considered the “relevant value”, to which the applicable tax rate is then applied. In addition to the fine, a prison sentence of up to four years may be imposed.

The primary sanction for tax fraud – as a qualified form of tax evasion – is imprisonment, which, depending on the defrauded value, may be up to five or ten years. A monetary fine may also be imposed; however, the maximum amount is limited by statutory provisions (up to EUR1.5 million or EUR2.5 million, and in the case of corporate fines up to EUR5 million or EUR8 million).

In practice, every tax audit report may also be reviewed by a competent fiscal criminal officer from the perspective of fiscal criminal law. As a result, tax audits may lead to the initiation of fiscal criminal proceedings where indications of a fiscal offence are identified. Fiscal criminal proceedings may also be initiated where suspicious activities are reported to the authorities and preliminary investigations establish sufficient grounds for suspicion.

As described previously, a distinction must be made between administrative fiscal criminal proceedings and judicial fiscal criminal proceedings. While administrative fiscal criminal proceedings are conducted by the tax authorities acting as fiscal criminal authorities, judicial fiscal criminal proceedings are governed by the principles of ordinary criminal procedure, supplemented by specific provisions of the Austrian Fiscal Criminal Act.

In judicial fiscal criminal proceedings, the public prosecutor is the competent authority responsible for directing the investigation and prosecution. In such cases, the fiscal criminal authorities act as investigative bodies on behalf of the public prosecutor. In particular, the tax investigation unit within the Anti-Fraud Office conducts fiscal criminal investigations either on behalf of the public prosecutor’s office or jointly with the criminal matters division, in accordance with the Austrian Fiscal Criminal Act and the ordinary criminal procedure rules.

Austria is among the jurisdictions that have agreed to implement the OECD/G20 standard for the automatic exchange of information. Under this framework, participating jurisdictions exchange tax-relevant information annually, with the first exchanges having taken place in 2017. The legal basis for this is the Multilateral Convention on Mutual Administrative Assistance in Tax Matters.

At the EU level, administrative co-operation is primarily based on the EU Directive on Administrative Cooperation (DAC) and its subsequent amendments.

In addition, Austria generally follows the OECD Model Tax Convention in its network of DTTs, which include provisions corresponding to Article 26 of the OECD Model Tax Convention regarding the exchange of information between the competent authorities. Austria has also concluded seven tax information exchange agreements with Andorra, Gibraltar, Guernsey, Jersey, Mauritius, Monaco, and St Vincent and the Grenadines.

Austria fully participates in the exchange of information with other jurisdictions on the legal basis outlined in 7.1 Legal Framework for Administrative Co-Operation. In particular, under Article 26 of the OECD Model Tax Convention regarding the exchange of information between competent authorities, which is followed by most Austrian DTTs, information may be exchanged automatically, spontaneously (without a prior request – eg, in the course of an administrative procedure) or upon request in relation to a specific case.

Austria participates in the OECD’s International Compliance Assurance Programme (ICAP).

With regard to joint cross-border tax audits, Austria has implemented EU Directive 2011/16/EU on administrative co-operation, thereby providing a legal basis for joint as well as simultaneous tax audits.

Austria maintains comprehensive mutual agreement procedure (MAP) mechanisms to resolve cross-border tax disputes.

The primary legal basis for the MAP is Austria’s network of DTTs, which generally follow the OECD Model Tax Convention and therefore contain provisions corresponding to Article 25 governing the MAP.

Another legal basis is the EU Dispute Resolution Directive, which has been implemented in Austria through the EU Tax Dispute Resolution Act (EU-BStBG). The Directive provides a structured dispute resolution mechanism for intra-EU cross-border tax disputes arising from differing interpretations or applications of DTTs or the EU Arbitration Convention, and ultimately allows for a binding decision if the competent authorities fail to reach an agreement. Once a taxpayer submits a request under this Act, access to the MAP under the relevant DTT or the EU Arbitration Convention is barred for the same dispute. 

In general, taxpayers have three years from the date of the first notification of a measure that results or may result in taxation that does not comply with the relevant treaty (eg, issuance of the relevant tax assessment) to request a MAP. This time limit applies both under Article 25 of the OECD Model Tax Convention and under the EU Tax Dispute Settlement Act, whereas certain DTTs concluded by Austria contain deviating deadlines.

In some cases, Austria’s DTTs also contain arbitration clauses similar to Article 25 paragraph 5 of the OECD Model Tax Convention. These clauses allow for the binding resolution of disputes where the relevant authorities are unable to reach a mutual agreement.

Taxpayers may also rely on the EU Arbitration Convention for disputes relating to transfer pricing. While the MAP under the EU Arbitration Convention is similar to that under DTTs, its key feature is the automatic and mandatory referral of the case to an arbitration panel if the competent authorities fail to reach an agreement within two years. The arbitration panel’s opinion is binding and ultimately ensures the elimination of double taxation. In contrast, arbitration under a DTT is only available where the respective DTT expressly provides for it.

Furthermore, as mentioned under 8.1 Availability and Legal Basis, the EU Tax Dispute Settlement Act provides for a MAP that can result in a binding decision being made in cases of intra-EU cross-border tax disputes that arise from different interpretations or applications of DTTs or the EU Arbitration Convention. Unlike the EU Arbitration Convention, the scope of the EU Tax Dispute Settlement Act is broader, as it does not only apply to transfer pricing disputes.

Since 2011, taxpayers in Austria have been able to apply for legally binding advance tax rulings under Section 118 of the Austrian Federal Fiscal Code, in order to obtain a unilateral advance pricing agreement (APA) which specifies transfer pricing criteria.

To ensure consistent treatment abroad, taxpayers can also seek bilateral or multilateral APAs. Bilateral APAs are based either on the MAP provisions of the DTTs (pursuant to Article 25 of the OECD Model Tax Convention) or on the EU Dispute Resolution Directive (implemented in Austria through the EU Tax Dispute Settlement Act). Bilateral APAs are usually requested by the taxpayer. However, taxpayers have no legal right to a successful MAP.

Taxpayers may also obtain informal, unilateral “good faith” rulings in circumstances where the above options are not available.

The most relevant route to obtain tax certainty in relation to international tax matters in Austria is through advance tax rulings under Section 118 of the Austrian Federal Fiscal Code, since such rulings are legally binding on the tax authority, provided that the facts and legal framework presented by the taxpayer are complete and accurate. These rulings are generally only available for matters expressly listed in the law, which include international tax issues.

Taxpayers can also obtain a short opinion through an Express Reply Service on matters of international tax law (EAS) provided by the Austrian MoF, which is made publicly available. However, these opinions are issued on an anonymous and non-legally binding basis.

Austrian tax law also allows certain taxpayers (companies with a turnover above EUR40 million) to apply for a co-operative compliance programme in the form of a so-called “accompanying control” (begleitende Kontrolle), which is intended as an alternative to tax audits. This programme involves regular communication with the tax authorities, thereby enhancing legal certainty and planning security, where more extensive information than rulings may be provided. However, it also requires increased disclosure from participating companies.