Taxing Director Salaries in Austria – A Comprehensive Guide by Heinz Kobleder Tax Advisors

„Those who lead inter­na­tion­al­ly must also stay on top of tax mat­ters – clar­i­ty in the con­tract saves real mon­ey.“

Are you a for­eign entre­pre­neur plan­ning to set up or man­age an Aus­tri­an com­pa­ny? Then one big ques­tion aris­es: Where and how will the director’s salary be taxed? This lay‑friendly guide from Heinz Kobled­er Tax Advi­sors walks you through the essen­tials, so you avoid dou­ble tax­a­tion and cost­ly sur­pris­es.​​

1. Two legal pillars explained

Pil­lar	What it cov­ers	Prac­ti­cal impact
Aus­tri­an Income Tax Act (EStG)	Dis­tin­guish­es employed, self‑employed and shareholder‑directors (§§ 22–25 EStG).	Deter­mines whether pay­roll with­hold­ing or per­son­al income tax applies and if Aus­tri­an social secu­ri­ty is due.
Dou­ble Tax Treaties (DTTs)	Aus­tria has treaties with near­ly all major trad­ing part­ners.	Make sure income is not taxed twice – cru­cial for inter­na­tion­al direc­tors.​​

2. Types of taxing directors & effects

1. Employed direc­tor
   • Stan­dard employ­ment con­tract, fol­lows instruc­tions.
   • Aus­tria with­holds pay­roll tax when work is done here.
2. Inde­pen­dent direc­tor
   • Acts autonomous­ly or owns more than 25 % of shares.
   • Pays Aus­tri­an income tax like a sole trad­er; quar­ter­ly pre‑payments com­mon.
3. Cross‑border or short‑term direc­tor
   • Spends less than 183 days a year in Aus­tria – under most DTTs, the home coun­try may tax. Keep evi­dence!
4. Remote direc­tor (home office in AT)
   • If the com­pa­ny is main­ly run from Aus­tria, the place of effec­tive man­age­ment can shift here, mak­ing the whole enti­ty sub­ject to Aus­tri­an cor­po­rate tax.​​

3. Key treaty articles in simple words

Arti­cle	Typ­i­cal use‑case	Tax result
Art 15 – Employ­ment income	Sub­or­di­nate direc­tors.	Taxed where the work is phys­i­cal­ly per­formed; 183‑day rule can lim­it Aus­tri­an rights.
Art 7 – Busi­ness prof­its	Inde­pen­dent direc­tors act­ing like entre­pre­neurs.	Taxed in the source state if there is a per­ma­nent estab­lish­ment or effec­tive man­age­ment there.
Art 16 – Direc­tors’ fees	Any remu­ner­a­tion for board mem­bers, incl. exec­u­tives.	Usu­al­ly taxed in the company’s coun­try of res­i­dence, regard­less of work loca­tion. Recent case law con­firms this applies to man­ag­ing direc­tors too.​​

4. Remote work – the new hotspot

• Pan­dem­ic expe­ri­ence shows direc­tors may man­age com­pa­nies from home abroad or in Aus­tria for months.
• If this becomes long‑term, Aus­tria may be seen as the place of effec­tive man­age­ment, trig­ger­ing full cor­po­rate tax here.
• Check­list
  1. Track home‑office days.
  2. Hold board meet­ings reg­u­lar­ly in the orig­i­nal head‑office coun­try.
  3. Keep min­utes and IT logs prov­ing where deci­sions were tak­en.
  4. Cre­ate a “pres­ence plan” togeth­er with Heinz Kobled­er Tax Advi­sors.

5. Four best‑practice tips from Heinz Kobleder Tax Advisors

1. Crystal‑clear con­tracts – spec­i­fy if the direc­tor is an employ­ee or an inde­pen­dent con­trac­tor.
2. Watch the 183‑day count – log trav­el and stays pre­cise­ly.
3. Itemise remu­ner­a­tion – salary, bonus­es, com­pa­ny car, stock options all have dif­fer­ent tax rules.
4. Seek advice ear­ly – have struc­tures reviewed before sign­ing. Sav­ings often reach six‑figure amounts.

6. Our services for foreign entrepreneurs

Heinz Kobled­er Tax Advi­sors sup­ports you from idea to day‑to‑day busi­ness:

• Choos­ing the cor­rect treaty arti­cle
• Draft­ing direc­tor and con­sul­tan­cy agree­ments
• Assess­ing whether home‑office cre­ates Aus­tri­an tax res­i­den­cy
• Ongo­ing pay­roll, cor­po­rate tax and com­pli­ance

Conclusion

With smart plan­ning, sol­id con­tracts and good doc­u­men­ta­tion you steer clear of dou­ble tax­a­tion and sur­prise bills. Heinz Kobled­er Tax Advi­sors is your trust­ed part­ner for safe and suc­cess­ful oper­a­tions in Aus­tria.