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Austria: Related Information

Capital Gains Tax on the Sales of Shares

In Austria capital gains are taxed as corporate income. Capital gains made by an Austrian holding company on the profitable sale of its shareholding in a foreign subsidiary are subject to the standard rate of Austrian corporate income tax unless the Austrian holding company meets the criteria known as the "International Participation Exemption rules." To satisfy the "international participation exemption rules" for capital gains purposes a holding company must meet the following 3 conditions:

  • Corporate Form: The foreign subsidiary must be a corporate body as per the definition set out in the EC Parent-Subsidiary directive whereas the Austrian company must be a corporate body as per the definition set out in its national laws.
  • 10% Shareholding: The Austrian holding company must hold a minimum of 10% of the shares of the foreign subsidiary prior to the sale of those shares.
  • 12 Months Time Period: The Austrian holding company must hold the 10% shareholding in the foreign subsidiary for a minimum of 12 months prior to the sale of the shares.

Where however the foreign subsidiary – Austrian holding company structure falls foul of Austrian anti-avoidance legislation (see above) the "international participation exemption rules" are suspended and any capital gains made on the profitable disposal of shares in the foreign subsidiary would be treated as corporate income and subject to standard Austrian corporate income tax at 25%.

Gains on the sale of shares in non-resident companies are exempt where the parent company holds 10% for at least one year. Tax on gains from the sale of movable or immovable property may be deferred, subject to certain conditions. Corporations, however, are not eligible for this tax deferral.

(N.B. Capital gains realized by an Austrian holding company on the profitable sale of shares in a resident subsidiary are subject to standard Austrian corporate income tax rates).

 

 

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