Withholding Tax in Austria: Overview for International Entrepreneurs

Aus­tria applies a broad set of with­hold­ing tax reg­u­la­tions that often affect for­eign entre­pre­neurs doing busi­ness with Aus­tri­an part­ners. In many cas­es, the Aus­tri­an pay­er is required to with­hold tax direct­ly from the pay­ment. This ensures that income derived in Aus­tria is prop­er­ly taxed at source. Here are the key cas­es:

1. Non-Resident Income Tax Cases

Accord­ing to § 99 of the Aus­tri­an Income Tax Act (EStG), for­eign indi­vid­u­als or enti­ties are sub­ject to with­hold­ing tax when earn­ing income from:

• Artists, per­form­ers, lec­tur­ers: 20 %, if the activ­i­ty is per­formed in Aus­tria.
• Licens­ing: Rights usage for IP, espe­cial­ly soft­ware, brands or patents (exclud­ing stan­dard soft­ware): 20 %.
• Consulting/technical ser­vices: Includ­ing mar­ket research, strat­e­gy devel­op­ment or tech­nol­o­gy trans­fer: 20 %.
• Super­vi­so­ry board remu­ner­a­tion and part­ner­ship shares: 20 %.
• Per­son­nel leas­ing: Non-Aus­tri­an employ­ers leas­ing staff into Aus­tria must with­hold 20 %.

Addi­tion­al tax­es of 25 % or 27.5 % may apply to div­i­dends or income from spe­cif­ic finan­cial prod­ucts.

2. Easement Rights Compensation (Leitungsrechte)

Ease­ment pay­ments for lay­ing cables or pipes across land in Aus­tria are sub­ject to with­hold­ing:

• 10 % for indi­vid­u­als
• 7.5 % for cor­po­ra­tions

This tax is final and may be includ­ed in a lump sum or amor­tized over time.

3. Treaty Relief (Double Tax Agreements)

Aus­tria has signed many DTAs that may reduce or elim­i­nate the with­hold­ing tax. How­ev­er, the pay­er must receive and sub­mit:

• ZS-QU1 (for indi­vid­u­als)
• ZS-QU2 (for com­pa­nies)

These include proof of res­i­den­cy and must be sub­mit­ted with­in one year before or after the pay­ment. For small­er pay­ments (€10,000/year), sim­pli­fied doc­u­men­ta­tion is suf­fi­cient.

In cas­es where only trav­el reim­burse­ments are paid with­out an hon­o­rar­i­um, tax may not apply.

4. Procedural Requirements & Liability

With­hold­ing tax must be report­ed using Form E 19 and paid to the Aus­tri­an tax office by the 15th of the month fol­low­ing the pay­ment. The Aus­tri­an client is legal­ly liable for cor­rect deduc­tion and fil­ing. Errors in this process can lead to penal­ties and crim­i­nal tax lia­bil­i­ty.

Heinz Kobled­er — Tax Advi­sors is your Aus­tri­an fis­cal rep­re­sen­ta­tive for all with­hold­ing tax issues, DTA eval­u­a­tions, and com­pli­ance mat­ters. Trust our long-stand­ing exper­tise and local insight.