Austria's government has submitted a draft budget bill for 2027–2028 introducing a progressive corporate tax rate, increased alcohol duty, new anti-abuse rules and reduced family benefit indexation as part of efforts to exit the EU's excessive deficit procedure.
Austria’s government has submitted the Draft Budget Accompanying Act 2027–2028 to Parliament, introducing a range of tax measures under the dual budget framework for 2027 and 2028. The proposals aim to strengthen fiscal consolidation efforts, including reducing Austria’s Maastricht deficit and enabling the country to exit the EU excessive deficit procedure after 2028.
The bill is awaiting approval by parliament.
Key measures include the temporary suspension of inflation adjustments for family and childcare benefits, alongside significant tax adjustments such as increased corporate and alcohol tax rates. The proposal details funding reallocations within the research and university sectors to prioritise innovation despite a tightening fiscal environment.
It also introduces targeted savings in public broadcasting and party funding while implementing new digital initiatives, such as providing citizens with free access to land registry data. Additionally, the text addresses legal and administrative efficiencies, including stricter measures to combat social and tax fraud and modernised regulations for judicial procedures.
Corporate and shareholder taxation
- Progressive corporate income tax (CIT): Starting with financial years beginning after 31 December 2027, a progressive CIT rate will be introduced. While the standard rate remains 23% for taxable income up to EUR 1 million, a higher rate of 24% will apply to income exceeding this threshold. In the case of tax groups, this EUR 1 million threshold is applied solely at the level of the group parent based on the total group income.
- Shareholder current account rules: To prevent “tax saving models,” a new deemed distribution rule will apply to receivables recorded on current accounts of individual shareholders. If these amounts are not settled by the balance sheet date or converted into arm’s length loans, they will be treated as an open distribution subject to withholding tax on the day following the balance sheet date. For shareholders holding at least 10%, a “de minimis” threshold of EUR 50,000 applies. This rule takes effect for financial years ending in 2027.
Sector-specific tax measures
- Electricity companies: For assets acquired or produced between 30 June 2020 and 1 January 2026, the maximum rate for declining-balance depreciation (degressive Abschreibung) will be temporarily reduced from 30% to 10%. This reduction applies for the years 2027 through 2029.
- Banking sector (stability levy): The current increased rates for the stability levy will be extended through 2029. The special payment introduced for 2025 and 2026 will also be maintained at its current level through 2028, significantly reduced in 2029, and finally abolished in 2030.
- Alcohol Excise Tax: Effective 1 January 2027, alcohol tax rates will increase by 30%, bringing the standard rate to EUR 1,560 per 100 litres of pure alcohol.
Real Estate and family-related measures
- Real estate income tax: Taxable gains on “old assets” will face a higher tax burden starting in 2027 due to a reduction in deemed acquisition costs. For standard old assets, the percentage is reduced from 86% to 80%, and for reclassified land, it drops from 40% to 30%.
- Employer contributions (FLAF): From 2028, the employer contribution to the Family Burdens Equalisation Fund will be reduced by one percentage point (from 3.7% to 2.7%). Simultaneously, the current contribution exemption for employees aged 60 and over will be abolished.
- Suspension of benefit indexation: The annual valorisation (inflation adjustment) for several family benefits—including family allowance, childcare allowance, and the family time bonus—will be suspended for the year 2028.
Additional measures and anti-abuse provisions
- Package tax: A new tax of EUR 2 per package or order will be introduced for mail-order deliveries to non-business recipients in Austria, effective for tax liabilities arising after 30 September 2026.
- VAT and fraud prevention: Authorities will be empowered to exclude companies from deferred import VAT procedures if there is a suspicion of tax offences. Furthermore, specific anti-abuse rules will be added to the Financial Crimes Act to target the misuse of these import procedures.
- Security and share Valuation: The rules for determining the “common value” of securities and shares will be amended to allow values to be derived from single sales transactions under certain conditions, aiming for a valuation closer to actual market conditions.
- Infrastructure: The scope of the Rail Infrastructure Service Company (SCHIG) will be expanded to include the central coordination of interregional bus lines (IR-Bus) and the “Rolling Motorway” (RoLa) for freight transport.
