The Corporate Income Tax Act provides for a participation exemption, which is applicable - under certain conditions - to both domestic and foreign shareholdings. A participation is regarded to exist if the taxpayer holds at least 5% of the nominal paid-up capital of a company of which the capital is partially or wholly divided into shares.
All benefits gained from shareholdings are exempt under the participation exemption, in order to avoid economic double taxation when the profits of a subsidiary are distributed to its parent company. The term 'benefits' covers dividends received, value increase as well as value decrease of the shares and capital gains and losses. Losses arising from liquidation of the company in which the taxpayer holds a share, may be set off under certain conditions.
Investment: Investing in assets up to EUR 309,693 p.a. (KIA), assets that are considered environmental friendly (MIA) and in assets for an efficient use of energy (EIA). The relevant rules for the corporation tax are largely corresponding to those for the Personal Income Tax Law.
60% of capital costs and current expenses for R&D can be deducted from profits (R&D Deduction)