Austria
Legal
Country code – AT
Legal Basis – Civil law (German)
Legal framework – Austrian Private Foundation Act (Privatstiftungsgesetz, PSG) 1993 (Amended in 2017)
Regulatory board - Financial Market Authority Austria
Entity – Privatstiftung (Private Foundation)
Liability - A foundation has its own separate legal personality, the properties and resources of it constitute an independent patrimony from that of the Founders, the Board of Trustees, Supervisory board and Beneficiaries.
Dedication of assets – A Foundation must have an initial endowment of assets or cash equivalent of €70,000.
Founder – The founder of a Private Foundation may be one or several natural or legal persons. The founder is free to choose the purpose of the private foundation which serves the purpose of managing, increasing and securing the assets of the private foundation.
Board of Trustees – The board of trustees administers and represents the Private Foundation and is charged with responsibility for fulfilling its purpose. The activities of the board are guided by the intentions of the founder as expressed in the declaration of establishment. The first board of directors is appointed by the founder. During his lifetime, the founder can retain the right to remove and appoint directors (but in this case the founder cannot be a beneficiary).
The board of trustees consists of at least three members, two of whom must have their permanent residence in the EU or EEA.
Beneficiaries, their spouses or partners, next of kin of beneficiaries and relatives as distant as third cousins, as well as legal persons, are excluded from serving on the board of trustees.
Supervisory board - The supervisory board is mandatory only for Private Foundations of a size defined by law (if the number of employees of a Private Foundation or of a corporation(s) managed by a Private Foundation exceeds 300).
The declaration of establishment may nevertheless also appoint bodies with supervisory or advisory responsibilities for any type of Private Foundations.
Beneficiaries – The beneficiaries may be determined in the addendum to the deed. This addendum is not filed with the court. Therefore, the names and identities of the beneficiaries are not accessible to the public and a third party inspecting the Austrian Register of Companies will usually only learn that a person has formed a private foundation and has paid up the minimum amount.
Beneficiaries’ right to information - A beneficiary is entitled to request and receive information from the Private Foundation on the execution of its purpose and may also inspect its annual financial statements, books, the deed of establishment, etc. A beneficiary may bring suit against the Private Foundation only if the declaration states this is possible.
Declaration of Establishment – The declaration of establishment documents the legal intent of the founder to dedicate assets to a defined purpose.
The declaration of establishment must include, in particular, details of the contribution of assets, the purpose of the Private Foundation, beneficiaries, the name and domicile of the Private Foundation, duration.
The declaration of establishment may also contain, rules governing the board of trustees, rules governing the auditor of the Private Foundation and other executive bodies, conditions concerning the revocation of the declaration of establishment, designation of a final beneficiary in the event of the dissolution of the Private Foundation, supplementary contributions.
Certain elements can be made private by using a supplementary form. The entry in the register of firms of such a supplementary declaration of establishment is not required, as no reasonable public interest exists which would justify such a far-reaching disclosure of the details of a Private Foundation.
Re-domiciliation – Not permitted.
Mergers - There is no ability for an Austrian foundation to merge with any other entity.
Charitable/Philanthropic Purposes - Permitted.
Compliance – The law mandates additional control mechanisms for all Private Foundations, for example, the auditing of a Private Foundation’s books by a certified public accountant or auditor. Any member of an executive body of a Private Foundation may request the courts to order a special audit to ensure that the purpose of the Private Foundation is being fulfilled.
- Corporate founder permitted
- Corporate council members permitted
- Protector/Guardian required
- Local regulated person required
- Founder not disclosed in a public registry
- Council members not disclosed in a public registry
- Protector/Guardian not disclosed in a public registry
- Beneficiaries not disclosed in a public registry
- Beneficiaries have right to information
- Merge permitted
- Redomiciliation permitted
- Charitable purposes permitted
- Registered agent required
- Civil law (German) Legal basis
- EUR 70,000 Initial endowment of assets
- 3 Minimum council members
- 2018 AEOI
Taxes
Private foundations in Austria are subject to tax on their assets transferred, on their income received and on their income/assets distributed.
Transfer of assets tax – Assets contribution to a Foundation are taxed at 2.5% rate (plus 3.5% in the case of real estate).
Income earned taxes - Private foundations are treated as corporate entities for tax purposes and therefore subject to corporate income tax at the standard rate of 25%.
Dividend income received by a private foundation on a shareholding held in a resident entity is exempted from corporate income tax. Dividends received from foreign entities are tax-exempt, provided that withholding taxes have not been reduced under a tax treaty.
Interest income from bank deposits, bonds or mutual funds, as well as capital gains, are subject to tax at standard rates, but it may be credited against withholding tax on distributions to beneficiaries.
Income distribution tax – Income distributed by the foundation is subject to a final withholding tax of 25%. Withholding tax may be reduced under a tax treaty.
- Offshore Income Tax Exemption
- Offshore capital gains tax exemption
- Offshore dividends tax exemption
- CFC Rules
- Thin Capitalisation Rules
- Patent Box
- Tax Incentives & Credits
- Property Tax
- Wealth tax
- Estate inheritance tax
- Transfer tax
- Capital duties
- 25% Offshore Income Tax Rate
- 25% Corporate Tax Rate
- 25% Capital Gains Tax Rate
- 0% Dividends Received
- 28% Dividends Withholding Tax Rate
- 27.5% Interests Withholding Tax Rate
- 20% Royalties Withholding Tax Rate
- 0 Losses carryback (years)
- Indefinitely Losses carryforward (years)
- FIFOLIFO Inventory methods permitted
- 18.12% Social Security Employee
- 21.48% Social Security Employer
- 55% Personal Income Tax Rate
- 20% VAT Rate
- 93 Tax Treaties
Country details
The Republic of Austria (in German, Republik Österreich), is a landlocked Central European state, traversed by the river Danube. It is a member of the European Union and it has a population of 8.5 million people. Austria borders with the Czech Republic and Germany to the north, Slovakia and Hungary to the east, Slovenia and Italy to the south, and Switzerland and Liechtenstein to the west. Its capital is Vienna, its official language is German and its official currency is the Euro (EUR).
Austria is a federal and democratic republic governed by the Constitution of 1920, which has been extensively amended later.
Austria is composed of nine federal states. The head of state is the Federal President, elected by direct popular vote for a term of six years. The president appoints the head of government, who holds the title of chancellor; and on the proposal of him or her, appoints the other ministers. The president may also dismiss the chancellor or cabinet, without the need for ministerial endorsement.
The head of government is the Federal Chancellor, who heads the Council of Ministers, and is responsible to the Austrian Parliament.
Austria has one of the highest per capita incomes worldwide. The country also has one of the highest Human Development Index rates, with a high standard of living and a high-quality health and education system.
Austria is an industrially developed country with an important service component. Services account for 67.5% of the economy; however, the remaining 30.3% includes important industrial sectors such as machinery manufacturing, the steel sector, and the chemical and automotive industries.
Austria is known internationally for the sophistication of the electronics sector, especially for its custom-made electronics.
Although some industries, such as iron and steel and chemical plants, are large companies employing thousands of people, businesses in Austria are relatively small on an international scale. In general, small and medium-sized enterprises predominate. Only 167 companies have more than 1,000 employees.
The Austrian industrial sector has a strong development in the arms, machinery, and textiles sectors.
As for the service sector, regarding tourism, Austria is one of the 10 most popular destinations in the world. Finance and telecommunications are the largest sources of capital.
Tax treaties
Tax treaties Map
Services
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