Holding Structures in Austria: Tax Benefits and Practical Considerations

Austrian holding companies benefit from one of the most favourable participation exemption regimes in the EU. Combined with Austria's extensive tax treaty network, this makes Austria an attractive location for holding structures within international groups.

The Participation Exemption (Schachtelbegünstigung)

Austria offers two types of participation exemption:

• International participation exemption — dividends from qualifying foreign subsidiaries are 100% exempt from corporate income tax. Capital gains may also be exempt under the international participation exemption.
• Domestic participation exemption — dividends from Austrian subsidiaries are exempt if the holding is at least 10%.

Withholding Tax Reduction via Treaties

Austria has double tax treaties with 90+ countries. Treaty rates on dividends, interest, and royalties are often reduced to 0–15%, significantly improving cash flow within the group.

Substance Requirements

To benefit from treaty protection and avoid BEPS challenges, Austrian holding companies must have genuine economic substance: real office space, local directors with decision-making authority, and documented management activities.

AT–UA Holding Structures

The Austria–Ukraine tax treaty provides favourable withholding tax rates (5% on dividends with 20%+ shareholding). This makes Austrian holding companies particularly attractive for Ukrainian business owners with international operations.

NEXORA structures compliant holding arrangements and provides ongoing tax advisory for your international group. Contact us for a free initial consultation.