Austria:amortization of goodwill

Following the introduction of the system of group taxation in 2005, the amortization of goodwill is extended for the first time also to the acquisition of shareholdings in corporations. If a company acquires a shareholding in a (future) member of the group, up to 50% of the acquisition costs may be deducted through the amortization of goodwill over a period of 15 years.

In order to be able to implement the amortization of goodwill, several conditions must be met and the following circumstances have to be particularly considered: the company acquiring the holding and the acquired company must form a group of companies. The shareholding cannot be acquired by another company of the group or by a controlling shareholder. The acquired company must be an Austrian corporation managing a company.

Previously it was not possible to apply the amortization of goodwill to the acquisition of holdings in foreign companies. Following a ruling by the Independent tax tribunal of Linz, this limitation could be abolished and thus the amortization of goodwill applied also to the acquisition of holdings in foreign corporations.Alessandro Pasut 2

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