AUSTRIA 2016
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Web Site: www.shermannigretti.it E-mail: info@shermannigretti.it Tel. +39 (0)2 7722951 Mob. +39 335 6030346 Twitter: @ShermanNigretti Linkedin: Gianmauro Sherman Nigretti
GEOGRAPHY AND POPULATION CAPITAL:
WIEN
POPULATION:
8,22 MILLION
POLITICAL SYSTEM:
FEDERAL REPUBLIC
FORMS OF BUSINESS ORGANIZATIONS Sole Proprietorship This is the simplest method of setting up a company. The business is carried out by a sole owner. The sole proprietorship is not a legal entity apart from its owner. The owner is both the owner and manager of the company. He/she is also subject to unlimited personal liability with all his/her personal assets.
Partnerships General Partnership (OG) – In order to form a general partnership, the partners enter into a contract of association in order to operate an enterprise based on commercial principles. Each partner is individually subject to taxation and each partner is personally liable, with his own private assets, for all the business debts. Partners can be individuals and legal entities (eg corporations). Limited Partnership (KG) - A limited partnership has two kinds of partners. At least one of these must be personally liable for all business debts without limitation. However, the other partners are only liable to the extent of their capital contribution. Partners can be individuals and legal entities (eg corporations).
GMBH and Co KG : a special case of Limited Partnership - The GmbH & Co KG is a form of business organisation unique to Austria and Germany. A limited liability corporation (GmbH) is the partner with unlimited personal liability in the limited partnership (KG). The corporation has an administrative role and generally provides for no capital. The limited partnership (KG) owns the company’s assets and runs the business. The civil law Partneship - The civil law Partnership is defined as an agreement between two or more partners putting together their funds for a common purpose. The civil law Partnership will have internal effect only between the Partners. Corporations A corporation is a legal entity distinct from the individuals who own it. The privately owned corporation is a limited liability company (GmbH). The publicly owned corporation is a public corporation (AG). Limited Liability Company (GMBH) - The limited liability company (GmbH) is an incorporated enterprise, where the liability of the shareholders is limited. Public Corporation (AG) - Like the GmbH, the AG is a legal entity limiting the liability of its shareholders. Unlike the GmbH, the shares of an AG can be transferred without a notarial deed.
Foundation/Trust (PS) A Foundation can be used for charitable purpose or for private security. The protection (asset protection vehicle) of a family-owned business is the main application for a private Foundation.
ACCOUNTING Must be provided annually and must disclose all assets, provisions, liabilities, prepayments accruals, income and expenses. They must give a ‘true and fair’ view of a company’s assets, its financial condition and earnings. Financial statements include: •
A Balance Sheet with the director’s note
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Profit and Loss
AUDITING A statutory audit is mandatory required for: •
Banks, insurance companies and investment funds
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Every AG (public corporation)
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‘Large’ and ‘medium-sized’ GmbHs (limited liability companies) or GmbH & Co KGs (partnerships where the fully liable partner is a GmbH )
CORPORATE TAXATION Public and private limited Companies and some other entities, such as cooperative purchasing societies and mutual insurance companies, are subject to corporate income tax at 25%. There is a general withholding tax of 25% on domestic dividends. Withholding tax does not apply to dividends received by: •
An Austrian company having an interest of at least 10% in the distributing company;
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A foreign resident company having an interest of at least 10% in the distributing company for a minimum period of one year.
INDIVIDUAL TAXATION Austrian resident individual persons are subject to taxation on their worldwide income. Nonresident individuals are only required to pay tax on Austrian-sourced income. The current average tax rates are as follows: TAXABLE INCOME
RATE
EURO
%
0 – 11.000
0
11.001 – 25.000
0 – 20.4
25.001 – 60.000
20.4 – 33.70
Income exceeding EUR 60,000 per annum is taxed at 50%.
VAT AND INDIRECT RATES The standard VAT rate is 20%. A reduced rate of 10% applies to some basic goods such as food. Austria imposes a number of other taxes such as: •
A 1% capital transfer tax on contributions to company capital (will be abolished by Jan 1, 2016).
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A real estate transfer tax of 2% to 3.5% of the real estate value or, alternatively, based upon a deemed tax value for some transactions.
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Insurance tax on insurance premiums, ranging from 1% to 11%.
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Social security is payable both by employers and employees. The employee rate ranges from 15.1% to 18.9% depending upon the employee’s status, age and type of income. The employer rate ranges roughly from 16.8 to 25.9%.
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Stamp duties are due on certain transactions and documents.
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Austria does not levy any tax on inheritance or gifts. No tax is imposed on gratuitous transfers (except for land transfer tax) but mandatory reporting on such transfers exceeding certain limits has been implemented.
Local Taxes •
A municipal tax of 3% is levied on the gross payroll of enterprises. In addition, municipalities levy land and property taxes.
DISCLAIMER This publication must not be regarded as offering a complete explanation of the taxation and corporate matters that are contained within this publication. This publication has been prepared on the express terms and understanding that the publishers are not responsible for the results of any actions which are undertaken on the basis of the information which is contained within this publication. The publishers and the authors expressly disclaim all and any liability and responsability to any person, entity or corporation who acts or fails to act as a consequence of any reliance upon the whole or any part of the contents of this publication. Accordingly no person, entity or corporation should act or rely upon any matter or information as contained or implied within this publication without first obtaining advice from an appropriately qualified professional person, and ensuring that such edvice specifically relates to their particular needs.