Foreign tax credit (matching credit)
Generally, foreign WHT can be credited against Austrian CIT (see Foreign income in the Income determination section). In special cases (e.g. Brazil, China, Korea), the DTT provides for a matching credit, which allows the credit of a pre-defined amount that exceeds the actually paid foreign WHT.
Research and development (R&D) incentives
R&D costs are fully deductible at the time they accrue. An R&D premium of 14% (i.e. R&D expenses x 14% = R&D premium) may be claimed for R&D activities performed in Austria.
In order to receive the current R&D premium of 14%, an expert report (issued by the Austrian research promotion organisation [FFG]) is required that confirms the nature of the expenses in question as R&D expenses. The definition of privileged R&D expenses is taken from the Frascati Manual.
The R&D premium is also available in case of contract R&D; however, R&D incentives cannot be claimed by both principal and agent (the agent is just able to apply for the premium if the principal does not). In case of contract R&D, the privileged R&D costs are capped at EUR 1 million per year.
Austria has no ‘patent box regime’.
Incentives related to COVID-19
The Austrian Parliament passed several COVID-19 packages in connection with COVID 19 support measures. Additionally, the Austrian Ministry of Finance, the Austrian Social Security Institution for Self-Employed, the Austrian Health Insurance Fund as well as the Austrian federal states, municipalities and professional organisations have introduced facilitations for tax payments, e.g.:
- Reduction/non-assessment of pre-payments of PIT and CIT
- Deferral of payments and payment plans
- Reduction/non-assessment of surcharges for late payment and claim interest
- Postponement of annual income tax return due dates, as well as the disclosure of deadlines for the annual financial statements
- Special corona short-time work model
- Guarantees and Subsidies (e.g. Subsidy for Fixed Costs)