Taxes & accounting for Austrian businesses

Income tax, corporate tax, VAT, the small-business rule and bookkeeping obligations — the basics for founders.

1. Which taxes exist?

Income tax (ESt): natural persons (sole proprietorship, OG, KG, GesbR). Progressive 0–55%.
Corporate tax (KöSt): legal entities (GmbH, FlexKapG, AG). Flat 23% (reduced in 2024 from 24%).
VAT (USt): standard 20%, reduced 10% (food, rent) and 13% (culture etc.).
Municipal tax: 3% on wages, paid to the municipality.
Employer contributions (DB, DZ): payroll-related levies.

2. Small-business rule

Businesses with annual net turnover up to €35,000 (from 2025: €55,000) are exempt from VAT. No VAT on invoices, but no input VAT deduction either. You can opt to regular taxation, binding for 5 years, which often pays off if you plan major investments.

3. Bookkeeping obligations

Cash-basis accounting (EAR): sole proprietorships and partnerships up to €700,000 turnover.
Double-entry bookkeeping: mandatory for GmbH, FlexKapG, AG and for sole proprietorships / partnerships above €700,000.
Retention period: 7 years for records; 22 years for real estate.

4. Tax registration

After trade registration, file with the tax office (Verf 24 / Verf 26).
Obtain a tax number.
Apply for a VAT ID if needed (U 15).
Set up FinanzOnline — nearly all filings are electronic.

5. Key deadlines

VAT return (UVA): monthly, by the 15th of the second following month (quarterly under €100,000 turnover).
Income tax return: 30 April (paper) or 30 June (electronic).
Corporate tax return: 30 June electronically.
Annual financial statements: 9 months after the balance-sheet date for capital companies.

6. SVS social insurance

The self-employed are compulsorily insured with the SVS covering pension, health, accident and self-employed pension provision. The first three years use provisional contributions that are retrospectively adjusted — unexpected back-payments are common, so always keep a reserve.

7. DIY or outsourced bookkeeping?

For small sole proprietorships with cash-basis accounting simple software (FreeFinance, BMD, Bexio) is enough. Once payroll, VAT groups or full accounting are involved, a tax advisor is practically required. Typical monthly fees for a micro-business: €80–150 plus year-end work.

8. Typical mistakes

No cash reserve for SVS back-payments in year 3.
Invoice details (recipient VAT ID, sequential number, service period) not compliant — lost input VAT.
Choosing the small-business rule despite major investments — input VAT forfeited.