How an Austrian GmbH Is Taxed: KöSt, the Minimum Corporate Tax and Distributions

The corporate income tax rate

An Austrian GmbH is taxed as a corporation: it pays corporate income tax (Körperschaftsteuer, KöSt) on its taxable income at 23 percent for calendar years from 2024 (24 percent for 2023, § 22 Abs. 1 KStG). A minimum tax of EUR 125 per full calendar quarter applies whatever the profit, and distributions to individual shareholders carry 27.5 percent withholding tax.

This page explains how the Corporate Income Tax Act (Körperschaftsteuergesetz, KStG) and the Income Tax Act (Einkommensteuergesetz, EStG) tax a GmbH. It does not apply them to any particular company. In Austria, tax advice is reserved to licensed tax advisers (Steuerberater) under the WTBG 2017, and applying these rules to a specific GmbH is a licensed tax adviser's work.

The rate sits in § 22 Abs. 1 KStG, in the Act's own words: the tax "beträgt für das Kalenderjahr 2023 24% und für die Kalenderjahre ab 2024 23%". It is one rate, applied to the company's taxable income, which the Act calls its Einkommen (income).

The start-up section of the Austrian business service portal (USP) states the same figure: corporate income tax amounts to 23 percent of the taxable income (profit). The tax is assessed and collected by the tax office, Finanzamt Österreich, under the Federal Ministry of Finance.

One rule in the same paragraph adds to the tax. Under § 22 Abs. 3 KStG, a surcharge of 25 percent applies to amounts whose creditor or recipient the company does not name precisely when the tax office asks.

KöSt is the company's own tax. The GmbH as a company form, with its share capital and its organs, is explained in what a GmbH is. Value added tax is a separate tax with a registration of its own, covered under when an Austrian GmbH must register for VAT.

Austrian GmbH tax figures at a glance

Every figure on this page, with the provision that sets it. Figures are those in force on 28 September 2026; the last row is forthcoming law.

Austrian GmbH tax figures, each with its paragraph, as in force on 28 September 2026 plus the change from 2028.

The minimum corporate tax, even at a loss

A GmbH owes a minimum corporate tax (Mindestkörperschaftsteuer) whether or not it makes a profit. § 24 Abs. 4 Z 1 KStG sets it, for each full calendar quarter of unlimited tax liability, at "5% eines Viertels der gesetzlichen Mindesthöhe des Grund- oder Stammkapitals": 5 percent of one quarter of the statutory minimum capital of the legal form.

The minimum capital is taken from the statute of each form: § 7 AktG for the AG, § 6 GmbHG for the GmbH and Art. 4 of the SE Regulation for the European company. For a GmbH the arithmetic runs in three steps. The statutory minimum share capital is EUR 10,000; one quarter of it is EUR 2,500; 5 percent of that is EUR 125. The minimum tax is therefore EUR 125 for each full calendar quarter, or EUR 500 for a year with four full quarters.

The amount depends on the legal form and on the number of full quarters. It does not depend on the profit. In a year whose KöSt at 23 percent comes to less than the minimum, including a year with no taxable income at all, the minimum tax applies instead.

Older descriptions of the minimum tax still mention reduced amounts for a company's first years. Those amounts sat in § 24 Abs. 4 Z 3 KStG, and that provision was repealed by BGBl. I Nr. 200/2023. Since the minimum share capital itself is now EUR 10,000, EUR 125 per quarter is the ordinary amount in every year, the first year included.

Minimum tax paid is not simply lost. Under § 24 Abs. 4 Z 4 KStG, the part that exceeds the actual KöSt of the year is credited "wie eine Vorauszahlung", like an advance payment, in later years. The credit has no time limit. It is capped each later year by the amount by which the actual KöSt exceeds the minimum amount, so the minimum tax works as a prepayment against later KöSt within that limit.

Tax on distributions to shareholders

Profit that a GmbH pays out meets tax at two levels. The GmbH pays KöSt on its income. When it distributes profit, the distribution is subject to withholding tax on capital income (Kapitalertragsteuer, KESt), and who owes what at that second level depends on who the shareholder is.

For an individual shareholder, distributions are subject to KESt at 27.5 percent "mit Endbesteuerungswirkung", with final-taxation effect: the income does not have to be entered in the shareholder's income tax return (USP, GmbH and FlexCo). The shareholder may instead opt for assessment at the ordinary income tax tariff.

The 27.5 percent is the special rate in § 27a EStG. The same paragraph has a second special rate of 25 percent, which applies to bank deposits and unsecuritised money claims against credit institutions, not to distributions from a GmbH.

A gain from selling a shareholding is taxed at the same flat 27.5 percent, according to the USP. The sale is also a company-law transaction with its own form, covered under the notarial deed for a share transfer.

For a corporate shareholder, the rules differ. Under § 94 Z 2 EStG, no KESt is withheld on dividends from shares in an AG, a GmbH, a FlexCo or a cooperative where the receiving corporation holds, directly or indirectly, "mindestens zu einem Zehntel", at least one tenth, of the nominal capital.

The same paragraph extends the exemption to foreign corporations that meet the conditions of the EU Parent-Subsidiary Directive (2011/96/EU) listed in Annex 2 to the EStG. For them, the holding must have existed "während eines ununterbrochenen Zeitraumes von mindestens einem Jahr", for an uninterrupted period of at least one year. It is the rule that concerns an EU parent company setting up an Austrian subsidiary GmbH.

There is a limit to the exemption. Where the Federal Ministry of Finance has ordered it by regulation to prevent avoidance and abuse (§ 22 BAO), and in cases of hidden distributions, KESt must be withheld. The relief the directive provides is then obtained afterwards, through a refund procedure on the parent company's application.

Carrying losses forward

A GmbH that makes a loss can deduct it from the income of later years, within a cap. Under § 8 Abs. 4 Z 2 lit. a KStG, the loss deduction (Verlustabzug) is taken as a special expense, and "der Verlustabzug steht nur im Ausmaß von 75% des Gesamtbetrages der Einkünfte zu": it is available only up to 75 percent of the total amount of income in a year.

What the cap leaves undeducted is not lost. The losses "sind … in den folgenden Jahren unter Beachtung dieser Grenze abzuziehen": they are deducted in the following years, subject to the same limit. The quoted provision sets no time limit on the carry-forward period.

Mechanically, the cap means that in a profitable year with older losses still open, at least 25 percent of the total amount of income remains in the tax base, outside the exceptions below. That remainder is taxed at the ordinary KöSt rate.

The 75 percent cap does not apply to the extent that the income contains the following gains, listed in § 8 Abs. 4 Z 2 lit. b KStG:

• gains from a debt waiver and restructuring gains;
• gains in years affected by insolvency proceedings;
• gains from disposing of or giving up a business, a part of a business or a co-entrepreneur interest;
• liquidation gains under § 19 KStG.

The last item concerns a company being wound up; the procedure itself is set out in GmbH Liquidation in Austria.

Filing and advance payments

KöSt is an annual tax. Under § 24 Abs. 1 KStG, it is assessed after the end of the calendar year, the assessment period (Veranlagungszeitraum), on the income the company earned in that period.

The return is filed electronically. § 24 Abs. 3 Z 1 KStG states: "Die Körperschaftsteuererklärung für unbeschränkt Steuerpflichtige ist elektronisch zu übermitteln." A paper return is allowed only where electronic filing is unreasonable because the company lacks the technical means.

For assessment and payment, the KStG refers to the rules of the EStG, which apply by analogy. When the tax office fixes the company's advance payments (Vorauszahlungen), the minimum tax is taken into account.

Tax filings sit beside the register filings a GmbH owes every year, which are set out in the GmbH compliance calendar. The practical side of a new company's money, such as the business account through which it pays, is covered by our bank account service.

A change coming in 2028

The rate described above is the law in force today. An amendment already published in the Federal Law Gazette changes § 22 Abs. 1 KStG from 1 January 2028; it is forthcoming law, not current law.

From 1 January 2028, income parts above EUR 1,000,000 are taxed at 24 percent, and income parts up to that amount stay at 23 percent (§ 22 Abs. 1 KStG in its version from 1 January 2028, BGBl. I Nr. 62/2026). The transitional provision is § 26c Z 102 lit. a KStG.

The 24 percent applies only to the part of the income above EUR 1,000,000. The part up to that amount is taxed at 23 percent under both the current and the 2028 version of the paragraph. For calendar years up to and including 2027, the 23 percent rate applies to the whole taxable income.

The 2028 amendment does not change the minimum corporate tax. For a GmbH it remains EUR 125 for each full calendar quarter.

From our practice

Two points come up again and again with new GmbHs. Founders meet older descriptions of a reduced minimum tax in the first years, which is repealed law. And the two headline percentages get merged: 23 percent is the company's tax on its profit, 27.5 percent the tax on what reaches an individual shareholder.

Sources

The rules on this page are taken from these official sources, consulted in September 2026:

• Austrian Federal Legal Information System (RIS), Corporate Income Tax Act 1988 (KStG), consolidated version: § 8 Abs. 4 (loss carry-forward), § 22 Abs. 1 and 3 (rate and surcharge), § 24 Abs. 1, 3 and 4 (assessment, electronic return, advance payments, minimum tax).
• RIS, KStG § 22 Abs. 1 in its version in force from 1 January 2028, BGBl. I Nr. 62/2026: the 2028 rate on income parts above EUR 1,000,000.
• RIS, Income Tax Act 1988 (EStG), § 27a (special rates of 27.5 and 25 percent) and § 94 (no KESt on dividends to qualifying corporate shareholders).
• Austrian business service portal (USP), start-up section, GmbH and FlexCo: the 23 percent rate, KESt at 27.5 percent with final-taxation effect, and the 27.5 percent rate on gains from selling a shareholding.

FAQ

Related service

GmbH Compliance in Austria: WiEReG, Firmenbuch Filings and the Annual Calendar. The register filings and the yearly cycle an Austrian GmbH runs on, beside its tax returns. See the GmbH compliance calendar.