To facilitate the creation of start-ups in Austria, the turquoise-green federal government introduced a bill on Friday. This is now under review. Key points are tax deductions and employee participation schemes.
Start-ups often try to involve their employees in the company so that they do not migrate to other companies. However, under current law, payroll tax is payable immediately upon transfer of the shares, although remuneration is often very low shortly after incorporation or no salary is paid at all, ie the beneficiaries have no income from which to pay the tax.
Going forward, the tax will be deferred, usually until the shares are actually sold, the proposal said. Taxes are not paid until money flows.
Proceeds from the sale of the shares must be taxed at a fixed rate
In addition, three quarters of the proceeds from the sale of the shares must be taxed as capital gains at a flat rate of 27.5 percent. The rest falls under the income tax rate. As a rule, the increase in the value of the shares over the years is the stimulus of this instrument – this increase in value is thus equated to 75 percent income from capital goods.
In addition, the start-up saves itself the time-consuming process of determining the enterprise value at the start of its existence so that the share transfer can be taxed.
Minimum share capital 10,000 euros
To support the start-up phase of start-ups, a “flexible company” (FlexKap) is being established as a new legal form. Here, the minimum share capital is 10,000 euros, instead of 35,000 as in a public limited company.
Ministry of Finance: Startups save a total of 50 million euros per year
This reduces the minimum corporate tax – five percent of the share capital per year – by about two thirds or 1250 euros per year. The Ministry of Finance estimates that all start-ups together save 50 million euros annually.
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.