Significant Changes Regarding Corporate Income Tax.

Extract

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Significant Changes Regarding Corporate Income Tax.

1. General

Recently, the Austrian Parliament adopted the Tax Reform Act of 2005 (Steuerreformgesetz 2005), which will have a significant impact upon the taxation of corporations in Austria. The most important elements of the Act include:

a considerable reduction in the corporate income tax rate;

the introduction of new group taxation rules, which allow setting off the profits of group members with the losses of other group members for tax purposes;

the introduction (within the framework of the new group taxation rules) of the amortization of goodwill acquired in a share deal;

the statutory recognition of recent case law regarding the application of the losses of foreign permanent establishments against the income of their Austrian head offices; and

the introduction of the deductibility of interest on loans taken out in connection with the acquisition of shares.

2. Corporate Income Tax Rate

In the last few years, more t...

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