Austria: dividend distributions

Dividend distributions received by an Austrian corporation are tax-free. Capital gains from the alienation of Austrian shares are taxable. If profits are not distributed but instead are retained by the Austrian entity, the fair value of the corporation increases, resulting in higher capital gains upon disposal of the shares.
Up to now, dividends paid out to the (previous) shareholder after a share sale have been regarded as tax-free dividends by the Austrian tax authorities.

According to the revised Corporate Income Tax-Guidelines 2013 recently published by the Ministry of Finance, dividends are only tax-free if the recipient of the dividend is still the owner of the shares as of the date when the respective resolution for the dividend distribution is passed. If, however, the recipient of the dividend has sold the shares before the dividend distribution resolution date, the dividend payment is considered a part of the sales price and, therefore, increases taxable capital gains.

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