Pillar Two Dashboard: Austria

On October 16, 2025 Austria issued a draft law to amend the Minimum Tax Act for the December 2023, June 2024 and January 2025 OECD Administrative Guidance.

On July 19, 2024, the Tax Amendment Act 2024 was published in the Official Gazette, which includes various amendments to the Minimum Tax Act arising from the OECD Administrative Guidance, including currency provisions, extending the Transitional CbCR Safe Harbour to cases where an MNE is not required to prepare CbC Reports, and MTTCs.

On December 30, 2023, the Austrian Federal Law Gazette No. 187/2023 published the Minimum Taxation Reform Act to implement the EU Minimum Tax Directive from January 1, 2024.

On December 14, 2023, the Austrian National Council passed the Draft Pillar Two Law.

On October 3, 2023, the Austrian Federal Ministry of Finance issued the ‘Federal law enacting the Federal Act to Ensure a Global Minimum Taxation for Groups of Companies’ to implement the Pillar Two GloBE rules/EU Minimum Tax Directive.

OVERVIEW

On October 3, 2023, the Austrian Federal Ministry of Finance issued the Minimum Taxation Reform Bill to implement the Pillar Two GloBE rules/EU Minimum Tax Directive.

It was approved by the Austrian National Council on December 14, 2023. The original Draft Law was updated during the Parliamentary process to include a number of aspects of the second set of OECD Administrative Guidance. 

On December 30, 2023, the Austrian Federal Law Gazette No. 187/2023 enacted the Minimum Taxation Reform Act.

As provided in the EU Directive, the Law includes an income inclusion rule (IIR) and an under-taxed profits rule (UTPR).

The IIR is to apply to financial years beginning on or after December 31, 2023. The UTPR will generally apply to financial years beginning on or after December 31, 2024.

Section 6 of the Law provides that Austria will apply a domestic minimum top-up tax (intended to be a QDMTT) for financial years beginning on or after December 31, 2023.

On July 11, 2024, Austria’s Federal Council approved the Tax Amendment Act 2024 (AbgÄG 2024), which includes various amendments to the Minimum Tax Act arising from the OECD Administrative Guidance, including currency provisions and extending the Transitional CbCR Safe Harbour to cases where an MNE is not required to prepare CbC Reports.

On October 16, 2025 Austria issued a Draft 2025 Tax Amendment Law to amend the Minimum Tax Act for the December 2023, June 2024 and January 2025 OECD Administrative Guidance, EU DAC 9 implementation and other sundry changes. The changes will apply retrospectively from fiscal years beginning from December 31, 2023.

GLOBE APPLICATION

General

As expected, the Law closely follows the EU Directive. There are very few options given to member states in the EU Directive in terms of flexibility over national implementation.

As noted below, most aspects of the provisions of the First and Second Set of OECD Administrative Guidance are included in the Law.

Administrative Guidance

Aspects of the February and July 2023 OECD Administrative Guidance included in the Law are:

-Rebasing monetary thresholds in the GloBE Rules (Article 1.1 – included by the July 2024 Amendment Act)

– Excluding State Entities from the definition of Entity (Article 1.2 – included by the July 2024 Amendment Act)

-Sovereign wealth funds and the definition of Ultimate Parent Entity (Article 1.4)

-Clarifying the definition of ‘Excluded Entity’ (Article 1.5)

-Meaning of “ancillary” for Non-Profit Organisations (Article 1.6)

-Forex hedge election (Article 2.2)

-Debt release election (Article 2.4)

-Accrued Pension Expenses (Article 2.5)

-Excess negative tax carry-forward guidance (Article 2.7)

-Substitute Loss carry forwards (Article 2.8)

-Equity Gain or loss inclusion election (Article 2.9)

-Allocation of taxes arising under a Blended CFC Tax Regimes (Article 2.10)

-The extension of the taxable distribution method election to insurance investment entities (Article 3.1)

-Exclusion of Insurance Investment Entities from the definition of Intermediate Parent Entity and Partially-Owned Parent Entity (Article 3.2)

-Restricted Tier One Capital (Article 3.3)

-Liabilities related to Excluded Dividends and Excluded Equity Gain or Loss from securities held on behalf of policyholders (Article 3.4)

-Portfolio shareholding election (Article 3.5)

-Application of Tax transparency election to Mutual insurance companies (Article 3.6)

-Transitional rules (Article 4)

-MTTCs (Second Set of OECD Administrative Guidance)

-Meaning of “ancillary” for Non-Profit Organisations (Second Set of OECD Administrative Guidance)

-Additional rules (such as the deemed 50% requirement where employees perform work outside the employer’s jurisdiction for the SBIE) (Second Set of OECD Administrative Guidance).

No aspects of the Third Set of OECD Administrative Guidance (issued in December 2023) or the Fourth Set (issued in June 2024) are included in the initial Law. The 2024 Amendment Act includes aspects of the updated Transitional CbCR Guidance from the December 2023 OECD Administrative Guidance.

The Draft 2025 Tax Amendment Law includes the following aspects of the December 2023, June 2024 and January 2025 OECD Administrative Guidance:

Safe Harbour and Penalty Relief Guidance

The Law provides for the application of all OECD Safe Harbours.

This includes the:

-Transitional CbCR Safe Harbour,

-QDMTT Safe Harbour

-Transitional UTPR Safe Harbour; and the

-Simplified calculation for Non-Material Constituent Entities Safe Harbour

Article 53 of the Law provides for the application of the QDMTT Safe Harbour and includes a number of detailed rules.

In particular, it confirms that a foreign domestic minimum tax can still be a qualifying QDMTT for the Safe Harbour if it:

-does not provide for a substance-based income exclusion (or provides rates lower than under the GloBE rules)

-does not provide for a de-minimis exclusion (or a more limited exclusion than is provided for in the GloBE rules) or

-applies a tax rate to excess profit that is higher than the 15% minimum tax rate.

The following will not be able to claim the QDMTT Safe Harbour:

-transparent entities which are either a UPE or apply an IIR;

-investment entities taxed under Sections 66-68 of the Law;

-entities in jurisdictions where the exemption for entities in the initial phase of their international activities applies locally; and

-joint ventures, where the QDMTT is payable by the companies of the parent company participating in the joint venture.

Article 3(10) of the 2025 Draft Amendment Law also applies the QDMTT Switch-Off rule to jurisictions where the QDMTT does not apply to securitisation entities.

The 2024 Amendment Law includes various aspects of the Transitional CbCR provisions from the Third Set of OECD Administrative Guidance. This includes:

-Transitional CbCR – JVs (Article 2.2.1)

-Transitional CbCR – MNEs not required to file CbC Reports (Article 2.3.4)

-Transitional CbCR – Treatment of hybrid arbitrage arrangements (Article 2.6)

Whilst the 2025 Draft Amendment Law includes the deferred tax recognition amendments to Articles 9.1 of the GloBE Rules in the January 2025 OECD Administrative Guidance (including the grace period for DTA reversals), the consequential amendments to the Transitional CbCR Harbour (Article 3(12)) and the QDMTT Safe Harbour (Article 3(10) are also included.

ELECTIONS

Elections in the OECD Model Rules

All of the elections included in the OECD Model Rules and the EU Minimum Tax Directive are provided in the Law, including:

-Excluded Entity Election (Section 4(2) of the Law)

-Stock-Based Compensation Election (Section 25 of the Law)

-Election to use the Realization Method (Section 28 of the Law)

-Election to Spread Capital Gains (Section 29 of the Law)

-Consolidation Election (Section 31 of the Law)

-Unclaimed Accrual Election (Section 42(9) of the Law)

-GloBE Loss Election (Section 43 of the Law)

-Prior Year Adjustment Election (Section 45(3) of the Law)

-De minimis Election (Section 50(1) of the Law)

-Substance-Based Income Exclusion Election (Section 48(2) of the Law)

-Taxable distribution Election (Section 68 of the Law)

-Tax transparency Election (Section 67 of the Law)

-Distribution Tax Regime Election (Section 65 of the Law)

Elections in the Administrative Guidance

Other elections included in the OECD Administrative Guidance are included in the Law. This includes the:

-Debt Release Election (Section 24 of the Law);

-Equity Investment Inclusion Election (Section 18(4) of the Law);

-Foreign Exchange Hedge Election (Section 18(3) of the Law);

-Portfolio Shareholding Election (Section 17(2) of the Law);

-Excess Negative Tax Carry-Forward Election (Section 41 of the Law).

New Elections

There are no new elections in the Draft bill.

DEVIATIONS FROM THE OECD MODEL RULES/EU GLOBAL MINIMUM TAX DIRECTIVE

As expected, the Law closely follows the EU Directive. There are very few options given to member states in the EU Directive in terms of flexibility over national implementation.

The main options relate to the design of the QDMTT.

The key differences are with the OECD model rules, including the extension to  include large scale, purely domestic groups,

The OECD Model Rules allow flexibility as to how to apply the UTPR. Austria’s approach is to apply a UTPR top-up tax rather than a denial of deduction.

As such the carry forward provisions in Article 2.4.2 of the Model Rules for UTPR amounts not sufficient to provide for the additional cash tax expense are not relevant and these rules are not included in the Law.

DOMESTIC MINIMUM TAX

General

Article 6 of the Law includes a domestic minimum tax (intended to be a QDMTT) for financial years beginning on or after December 31, 2023.

QDMTT Design Features

The amount of top-up tax under the QDMTT is the top-up tax calculated under Article 47 of the Law. However, Article 6 of the Law provides for two adjustments:

Firstly, it applies irrespective of the shareholdings in the group entities located in Austria. This reflects the OECD Administrative Guidance that provides that Top-up Tax that is subject to the QDMTT is based on the whole amount of the jurisdictional Top-up Tax calculated, irrespective of the ownership interests held in the Constituent Entities located in the QDMTT jurisdiction by any Parent Entity of the MNE Group.

Article 61 of the Law extends this and provides that just as for Constituent Entities, Top-up Tax under a QDMTT in respect of Joint Ventures is the whole amount, irrespective of the fact that the UPE would only be subject to tax on its share of the Top-up Tax arising from Joint Ventures or JV subsidiaries.

Secondly, it applies the QDMTT to stateless entities or permanent establishments (with a place of business activity in Austria)

Under the OECD Administrative Guidance, a domestic minimum tax does not need to apply to Stateless Constituent Entities or permanent establishments to be a QDMTT. However, jurisdictions can impose a QDMTT on these entities when they are created under the domestic law of the jurisdiction (or where a permanent establishment has a place of business in the QDMTT jurisdiction).

Article 14 of the Law states that the accounting standard used in the preparation of the financial statements of the constituent entity can be used for QDMTT purposes if:

1. it is disproportionate to determine the net profit or loss for the constituent entity on the basis of the UPE accounting standard;
2. it is an acceptable or authorised accounting standard;
3. the information contained in the financial statements is reliable; and
4. permanent differences of more than EUR 1 million are conformed with the UPEs accounting standard.

Tax paid or incurred by a Constituent Entity-owner under a CFC Tax Regime that is pushed down to a domestic Constituent Entity in the GloBE Rules must be excluded, as provided in the OECD Administrative Guidance. This is included in Section 44(5) of the Law.

This preserves Austria’s primary right to tax income accruing to an Austrian member entity which is also a CFC. If there were no statutory derogation from the general GloBE rules for the calculation of the domestic minimum tax, and the CFC tax paid by the controlling company abroad were included in the included taxes of the Austrian CFC, the effective tax rate would be increased. Therefore, excluding the CFC tax from the Austrian CFCs covered taxes allows Austria to tax low-taxed income at a higher rate than would be the case under an IIR.

Section 44(5) also prevents the pushdown of tax to hybrids, PEs and for taxes on distributions (aside from Austrian withholding tax on distributions).

Any QDMTT that has not been paid within four years is usually taken into account for top-up tax purposes in the fifth year. This does not apply for the QDMTT calculation (just for tax under an IIR or UTPR). This is required to avoid circularity and ensure the QDMTT is not taken into account for the domestic minimum tax calculation.

Article 76 of the Law provides that the QDMTT will be charged on:

-the entity located in Austria nominated by the UPE;

-if no entity located in Austria has been nominated, the highest parent entity located in Austria; or

-if no entity located in Austria has been nominated and there is no parent entity located in Austria, the economically most important entity located in Austria.

Filing

The relevant aspects of the submission of a GloBE Information Return (GIR) are included, as provided in the EU Directive.

The proposed approach is that every Constituent Entity located in Austria will have an obligation to file a GIR in Austria. However, this obligation can be discharged if the GIR is filed by:

-The Ultimate Parent Entity, or

-The Designated Filing Entity.

Where the GIR is being filed by either the Ultimate Parent Entity or the Designated Filing Entity, the Constituent Entity, must file a notification with the Revenue.

The notification must contain:

-Details of the entity that is filing the GIR, and

-The jurisdiction in which such an entity is located.

Where the GIR is filed by the Designated Local Entity it needs to outline the Constituent Entities that it is filing on behalf of.

Both the GIR and associated notifications must be filed no later than 15 months after the end of the fiscal year (with an 18-month deadline for the Transition Year).

Article 77 of the Law also requires submission of an additional self- assessment return (a ‘GloBE Top-Up Tax Return’) and payment of top-up tax by December 31 of the second calendar year following the last day of the calendar year in which the financial year ends.

Articles 3(17)-(19) of the 2025 Draft Tax Amendment Law implement the EU DAC 9 amendments. This simplifies reporting in-scope groups by enabling central filing of a top-up tax information return (TTIR) and introduces a standard form for filing the TTIR across the EU, in line with the GIR.

Payment

Article 77 of the Law provides that the top-up tax payable is due by December 31 of the second calendar year following the last day of the calendar year in which the financial year ends.

Penalties

Article 75 of the Law provides that a person is liable to a fine of up to 100,000 Euros if they do not submit the GIR, in full or by the deadline.

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