Taxes in Europe Database v2
1988 Income Tax Law, BGBl. (federal law gazette) No 400/1988 as last amended by BGBl. 85/2008 and Law on final withholding tax on capital yields (federal law gazette) No 1993/11 as last amended by BGBl. I No 112/2012.
The beneficiaries of the tax are the federal government (67.8 %), the provincial governments (20.5 %) and the local authorities (11.7 %).
Withholding tax; withheld by payer of capital yields.
Yields and gains of capital.
Basis of assessment:
The main categories subject to withholding tax are: Profits from capital investments (dividends, interest, benefits from foundations etc.); profits from capital gains arising from these capital investments (sale of shares or participations in corporations as well as income from derivatives).
General exemption in all cases where debtor and creditor of the capital yields is identical.
The most common exemption in the area of corporate taxation is the exemption for profit distributions from corporations to corporations (domestic or EU or countries of European Economic Area); it applies if the corporation holds a direct investment of at least 10 %; however a withholding tax levied in cases the holding quota does not exceed 10% can be credited. For dividends that paid to corporations being residents of a third country, a withholding tax of 25% applies.
As far as the withholding tax for capital gains is concerned, the withholding tax of 25% does not apply to the sale of participations in corporations with limited liability; however, they are not exepted from tax; the tax has to be assessed in the annual tax return of the shareholder.
Withholding tax of 25% also applies to capital gains (in general, also final).
Uniform tax rate of 25%
When withholding tax is levied, it is generally due within a week after capital yield accrued.
Tax withheld by payer of capital yields and deposit facility and transmitted to Federal tax administration.
Where dividends or interests are paid to individuals, the capital yields tax deducted is a final tax charge for income tax and for inheritance tax.
There is an option for including these incomes in income tax assessment. In this case distributed profits are taxed at the general "normal" tax rate (up to 50%). The option can however only be claimed for all capital yields.
By income tax assessment the capital yields taxes are considered as income tax prepayments and will be deducted from the total assessed tax.