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Group Taxation

Tastatur Euro © photocase.com/Lukas Dorn-Fussenegger

© photocase.com/Lukas Dorn-Fussenegger

With the Tax Reform Law 2005 Austria has introduced a modern system of company taxation, which makes it possible for companies that are interconnected to balance their profits and losses with one another.

In 2005 Austria introduced a modern taxation concept for modern companies, which was internationally well received: group taxation - Gruppenbesteuerung.

In Austria public limited companies have to pay a corporate tax of 25% of income (profit) instead of income tax. By introducing group taxation it has been made possible for companies that are interconnected to balance their profits and losses with one another; foreign companies of the group can only valorize losses. The parent company of the group has to totalize the result of the group members with its own result. The total result is subject to corporate tax.

Group taxation offers the following possibilities:

  • Valorisation of (foreign) losses
  • Creation of corporate groups with several parent companies (e.g. for joint-ventures)
  • Goodwill amortization when acquiring domestic managing coporations


The group can be lead by more than one company which is particularly important for joint-ventures. It is require, however, that one main shareholder keeps at least 40%.

Source: BMF (2011): Investing in Austria. Yearbook on the Financial Center. p. 20f.

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