Austria: Country and Foreign Investment
Business Investment Incentives
Austria offers a comprehensive system of both national and local incentive programs. The incentives available for a specific project vary, depending on the geographic location, the number of jobs created, the technology used and various other factors. Even the range of incentives is wide: from cash grants and low interest loans to export guarantees. Therefore individual consultations are required to determine the available incentives. Austria, however, must not grant subsidies in excess of the level accepted by the EU.
Incentive Cash Grants
Jobs must be created in economically depressed areas. Companies invest a negotiated amount for each job created and the employment must last for at least 3 years.
- Grants for company premises, machinery and equipment are not taxed as income;
- Grants or subsidies to create or maintain jobs may be tax free depending on circumstances.
The Tax Reform Act 2000 provided for a substantial enhancement of the tax incentives for R&D. After the reform, Austria found itself among the most generous countries with respect to tax incentives to R&D.
Within the framework of the Tax Reform Act 2000, the allowance for research expenditures in connection with “economically valuable” inventions was increased from 18% to 25% (maximum) and the allowance for additional research expenditures (over and above a moving average of the expenditure over the past three years) was increased to 35%. The aim of the regulation was to give incentives to increase R&D expenditures.
R&D expenditure is limited to EUR1m per year from tax years beginning in 2012. Applications for the deduction are subject to stringent tests set by the Austrian Research Promotion Agency. Prior to 2012 the limit was EUR100,000 and no checks were carried out by the Research Promotion Agency.
Alternatively, a company can apply for a cash bonus of 8% of R&D expenditure.
Until 2006, 41% of Austria's land area was eligible for support under various EU structural fund programs. The Austrian federal, provincial, and local governments also provide financial incentives within EU guidelines to promote investments in Austria.
Incentives under these programs are equally available to domestic and foreign investors, and range from tax incentives to preferential loans, guarantees and grants. Most of these incentives are available only if the planned investment meets specified criteria (e.g., implementation of new technology, reducing unemployment, etc.). Tax allowances for advanced employee training and R&D expenditures are available.
The government has merged various institutions providing financial incentives into a “one-stop shop” named the Austria Wirtschaftsservice.
The Innovation & Technology Fund
Grants are given up to a maximum of 50% of project costs for technology transfer, IT costs, transport projects, software engineering or energy projects.
European recovery programme (ERP)
SMEs are offered subsidised loans (2-4% benefit) for up to 70% of investments made into environmental protection technology and for some other purposes; both tangible and intangible assets are covered.
The ERP Fund will prepare a package of subsidies for investors tailored to individual planned investment:
Tel: 00 43 1 53464 x 4000