The Austrian Participation Exemption Regime

A corporation is tax resident in Austria if it has its legal seat and/or its place of effective management in Austria. The legal seat of a corporation is the place normally defined in its articles of association. The place of effective management of a corporation is the place where all the measures are taken that are required and essential for the management of the corporation. Resident companies are taxable on their worldwide income, including capital gains, at a flat tax rate of 25 per cent. Apart from corporate income tax, no other taxes or surcharges are levied on a corporation’s income. Certain exemptions exist for participations (see below). However, attention must also be paid to the Controlled Foreign Company (CFC) rules and to the switch-over rule (see below).

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