Enhanced Principal Liability for Construction Services in Austria from 2026: Key Risks, Liability Limits and Compliance Tips

Introduction

Start­ing Jan­u­ary 1, 2026, Aus­tria has tight­ened its prin­ci­pal lia­bil­i­ty (AGH) rules for con­struc­tion ser­vices. Con­trac­tors and devel­op­ers can now be held liable for unpaid tax­es and social secu­ri­ty con­tri­bu­tions of their sub­con­trac­tors.

The new regime par­tic­u­lar­ly impacts for­eign com­pa­nies oper­at­ing in the Aus­tri­an con­struc­tion sec­tor.

As expe­ri­enced Tax Advis­ers in Aus­tria, Heinz Kobled­er – Tax Advi­sors explain what has changed and how busi­ness­es can stay com­pli­ant.

1. Purpose of the Principal Liability System

The AGH sys­tem oblig­es a prin­ci­pal com­pa­ny to assume respon­si­bil­i­ty for unpaid tax­es and social con­tri­bu­tions of its sub­con­trac­tor when con­struc­tion or main­te­nance ser­vices are sub­con­tract­ed.

Its pur­pose is to strength­en com­pli­ance, pre­vent wage tax eva­sion and secure equal com­pe­ti­tion with­in the con­struc­tion indus­try.

2. New Liability Percentages (Effective 2026)

Since 2026, two dis­tinct lia­bil­i­ty lev­els apply:

a) Construction Work (Standard Case)

• Total lia­bil­i­ty: 25 % of the con­tract val­ue
  • 20 % for social secu­ri­ty con­tri­bu­tions
  • 5 % for wage-based tax­es

b) Labour Leasing

• Total lia­bil­i­ty: 40 % of the con­tract val­ue
  • 32 % for social secu­ri­ty con­tri­bu­tions
  • 8 % for wage-based tax­es

This high­er lia­bil­i­ty applies when per­son­nel are pro­vid­ed rather than a spe­cif­ic con­struc­tion result is deliv­ered.

3. When Does the Liability Apply?

Lia­bil­i­ty only aris­es if the sub­con­trac­tor fails to pay and enforce­ment is unsuc­cess­ful or insol­ven­cy occurs. Prin­ci­pals are there­fore not auto­mat­i­cal­ly liable but should ensure prop­er doc­u­men­ta­tion and due dili­gence at every stage.

4. How to Avoid Liability Risks

To stay pro­tect­ed, prin­ci­pals can take three prac­ti­cal steps:

a) Verify the HFU List

Before any pay­ment, con­firm that the sub­con­trac­tor is list­ed in the HFU List (lia­bil­i­ty-exempt com­pa­nies). If list­ed, no lia­bil­i­ty applies.

b) Transfer a Liability Waiver Amount

If not list­ed, prin­ci­pals can pay a lia­bil­i­ty waiv­er amount direct­ly to the AGH Ser­vice Cen­tre (DLZ-AGH) –

• 25 % for con­struc­tion work
• 40 % for labour leas­ing

This pay­ment ensures full pro­tec­tion from sub­se­quent lia­bil­i­ty.

c) Maintain Documentation

Accu­rate records of the tim­ing and basis of each pay­ment are crit­i­cal for legal pro­tec­tion.

5. Example

For a sub­con­tract worth € 100,000:

• Con­struc­tion work → lia­bil­i­ty up to € 25,000
• Labour leas­ing → lia­bil­i­ty up to € 40,000

The finan­cial dif­fer­ence high­lights the impor­tance of prop­er clas­si­fi­ca­tion and doc­u­men­ta­tion.

6. Conclusion & Practical Advice

The new AGH frame­work sig­nif­i­cant­ly increas­es com­pli­ance require­ments in Austria’s con­struc­tion sec­tor. For­eign investors and com­pa­nies should ensure robust pro­ce­dures for sub­con­trac­tor ver­i­fi­ca­tion and pay­ment han­dling.

Heinz Kobled­er – Tax Advis­ers in Aus­tria assist inter­na­tion­al and local busi­ness­es with:

• AGH com­pli­ance and reg­is­tra­tion
• Con­tract reviews and HFU ver­i­fi­ca­tion
• Doc­u­men­ta­tion and audit prepa­ra­tion

Con­tact our team to ensure your projects in Aus­tria remain secure and com­pli­ant.