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Austria: Related Information

Withholding Taxes on Incoming Dividends

As a member of the EU, Austria is governed by the provisions of the EU's Parent-Subsidiary directive, whose effect is that where an Austrian holding company controls at least 10% of the shares of an EU subsidiary for a minimum period of 12 months any dividends remitted by the EU subsidiary to the Austrian holding company are free of withholding taxes.

(N.B Under changes to the Parent-Subsidiary directive, the minimum shareholding level was reduced from 25% to 20% between 1st January 2005 and 31st December, 2006, and to 15% until 31st December 2008. It was cut again to 10% from 1st Janaury 2009).

Where the provisions of this directive do not apply (or where anti-avoidance provisions are in place) Austrian holding companies can rely on an extensive network of double taxation treaties the effect of which is to obtain a reduction in withholding tax rates on dividends remitted to Ausdtia from the subsidiary jurisdiction.

Austria has more than 65 double taxation treaties in place. The greater a country's network of double taxation treaties the greater its leverage to reduce withholding taxes on incoming dividends. An elaborate network of double taxation treaties is thus a key factor in the ability of a territory to develop as an attractive holding company jurisdiction.

 

 

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