Holding a residency permit in Austria triggers your tax liability there on any income generated, as is the case with every country within the EU. Depending on what terms you are residing in Austria, you may be eligible to take advantage of certain tax incentives and benefits.
What if I am a Private Resident in Austria?
A key benefit for those who are living in Austria through the residency permit for private purposes is that there is no related tax: this is because only income is taxable in Austria, and holders of this permit are without the need of a workplace.
You may be living in Austria as a private resident but running your business in another part of the world. As a general rule, the Austrian Financial Authorities have very little bearing on your fiscal situation outside of the European Union, and therefore will rely on the information provided to the Authorities based on your application.
If you are applying for a private residence permit in Austria, you will rarely encounter the Tax Authorities directly, since you are neither registering a company there nor seeking employment. We would advise that, as a matter of practice, applicants disclose all foreign assets and companies to the Austrian Tax Authorities in order to receive official documentation regarding tax liability.
A corporation is resident in Austria if it is incorporated, managed and controlled there, and is based upon a company’s profits, which consist of buying/ trading income, passive income and capital gains. If you are undertaking a business in Austria, you will be liable to pay corporate tax, with branch tax set at the same rate as for subsidiaries. Corporate taxation rates in Austria are relatively low at 25%, – a key incentive which often attracts foreign investors.
Provided that they conform to EU policies on regional investment and state aid, foreign direct investments which involve a substantial transfer of technology and leads to job creation may be entitled to investment incentives. Research & Development (R&D) may also offer motivations in this respect: tax payers pay claim a subsidy in the form of a tax cash premium equal to 10% of the qualifying R&D expenses – with a huge 20% deduction for available for costs of external training.
Here is a link with a list regarding all countries which have entered into a Double Taxation Agreement with Austria:
We can assist with a unique opportunity for permanent residency in Austria for those without the need of employment.
Contact us at [email protected] today to learn more about the Austrian residency program for private purposes.