Austria: Fiscal aspects

When choosing the legal form of a company, not only questions related to costs, limitation of liability, obligations of publication and the possibility to withdraw assets are important elements to be considered, but also the amount of taxes to be paid.

Members and partners of corporations and partnerships have to face up to a taxation between corporate income taxes and capital gains taxes applied to the distribution of profits of a total of 43.75%. The sole proprietor or the partner of a partnership are on the contrary liable to income tax where the tax rate increases progressively between 0% and 43% for income up to 60,000 euro and amounts to 50% for incomes above 60,000 euro.

When calculating the average tax rate it becomes clear that in case of an annual income of 160,000 euro, the tax rate exceeds 43.75%. Thus, from this income level on the corporation is more convenient in terms of taxes to be paid. When determining the exact income limit, it is, however, necessary to take into account also the private situation of the taxpayer (children, allowance on profits etc.).

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