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Corporate income tax
The standard corporate income tax (CIT) rate in Austria is 25% for 2006. This will apply to an Austrian incorporated company or a foreign company trading in Austria through a branch or agency, or having income deriving from real estate situated in Austria. Minimum CIT of €1,750 and €3,500 is due in loss-making periods (dependant on the legal status of the corporation) and can be credited in future periods. Losses can be carried forward indefinitely against up to 75% of annual profits.
Capital gains
Capital gains arising on the disposal of real estate or the disposal of shares in an property holding company are subject to 25% CIT for 2006. However, under the Austrian double tax treaty, the disposal of shares in a property holding company by a foreign person is usually exempt. The direct disposal of real estate itself is not exempt.
Property transfer tax
The transfer of real estate is subject to 3.5% property transfer tax plus a 1% registration fee based on the consideration. The transfer of real estate under the Reorganisation Tax Act (e.g. via a merger) triggers 7% property transfer tax plus a 1% registration fee based on the tax assessed value of the underlying real estate. The transfer or the unification of 100% of the shares of an asset owning company triggers 10.5% property transfer tax based on the tax assessed value of the underlying real estate.
Property tax
Annual property tax of up to 1% is levied on the tax assessed value of Austrian property. An additional tax of 1% of the tax assessed value of land is payable for land without buildings, meaning that tax on undeveloped land is effectively up to 2% of the tax assessed value of the land. Both taxes are deductible for CIT purposes.
VAT
The standard rate of VAT in Austria is 20% (or 10% for private use). In general, income deriving from the disposal or the tenancy of real estate is exempt from VAT. However, under certain circumstances the option to tax (20%) can be exercised, allowing the recovery of input VAT.
The above is for general information purposes only. It is not intended to be comprehensive or to provide any specific tax advice.
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