Austria: Recent Tax and Corporate Law Changes
Austria has recently enacted a slew of changes to its tax and corporate laws. Significant highlights include the following:
Changes to rules governing Limited liability companies
- Increase in the minimum share capital for a GmbH to EUR 35,000 (~USD 48,186) (from EUR 10,000 (~USD 13,767)). Further, where share capital is paid up in cash, an amount of EUR 17,500 (~USD 24,093) (earlier EUR 5,000 (~USD 6,884)) must be paid.
- It is possible to establish a GmbH with a share capital paid in cash of EUR 5,000 (~USD 6,884) under certain conditions.
- The threshold of EUR 150 (~USD 207) for certain simplifications in respect of invoices is increased to EUR 400 (~USD 551) with effect from March 1, 2014.
Deductions (Salary Payments, Interests and Royalties)
- No deductions will be allowed for salary payments made after February 28, 2014, concerning the amount exceeding EUR 500,000 (~USD 688,370) per individual recipient per tax year.
- Interest and royalties paid to a sister concern or a related entity shall not be deductible, subject to certain conditions.
- However, half of the amount of such payments would be deductible if the income from such payments is at least taxed at a rate of 10%.
- The 75% limitation rule for set off of losses is abolished from assessment year 2014.
- The profit allowance (Gewinnfreibetrag) will be restricted to the acquisition or production cost of depreciable tangible assets.
Multinationals planning to set a GmbH and those who recently set up GmbH may be required to comply with the increased capital limits.