The corporate tax rate is 25%. There is a minimum corporate income tax of EUR 1,750 for limited liability companies and EUR 3,500 for joint stock companies. Corporations with a legal seat and/or place of effective management in Austria are deemed to be tax residents and are subject to unlimited corporate income tax liability in Austria on their worldwide income. Non-resident corporations are subject to limited corporate income tax liability only on specific types of income with a nexus to Austria.
The Austrian Income Tax Act contains the arm's length principle dealing with transfers of assets (tangible or intangible) or services into and out of the country. Thereupon it is provided that assets transferred to a foreign PE or business of the same taxpayer, as well as to a group of companies, must be valued at the price that would be realized if the assets were sold to unrelated parties.
Furthermore, Section 8 paragraph 2 of the Austrian Corporate Tax Act provides that hidden profit distributions do not reduce the taxable profit of the corporation and Section 8 paragraph 1 of the Austrian Corporate Tax Act correspondingly provides that hidden contributions by a shareholder do not increase the taxable income of the corporation.
Sections 21 et seq. of the Federal Procedural Tax Act provide for as a general rule the principle of substance over form which entitles the tax administration to look through artificial arrangements of civil law and to apply taxation measures on the basis of the factual economically intended fact pattern rather than the civil law construction chosen.