Von Österreich nach Zypern

Austrian founders in 2026: 55% top PIT, 27.5% KESt on everything, 44% combined on distributed profits

Austria has one of Europe's most punitive combined structures: 55% top PIT (extended through 2026), 27.5% KESt (Kapitalertragsteuer) on dividends/CGT/interest with no participation exemption at individual level, and a 44.2% effective rate on profits distributed out of a GmbH. Plus §27(6) EStG exit tax on portfolio participations with no de-minimis threshold. Cyprus is the EU-law route without Austria's structural density.

✓55% top PIT above €1m — Cyprus 35% top, 0% to €22,000
✓27.5% KESt on dividends/CGT/interest, no participation exemption — Cyprus non-dom 0% SDC
✓44.2% combined KöSt + KESt on distributed profits — Cyprus ~17.5% non-dom
✓§27(6) EStG exit tax on portfolio participations — EU deferral into Cyprus

Book free consultation See relocation pricing

Austria vs Cyprus at a glance

All figures verified against primary sources listed at the bottom of the page. Estimates, not legal or tax advice.

What matters	Austria	Cyprus
Corporate tax (KöSt)	23% flat (down from 24% in 2024, 25% pre-2023)	15% flat from 2026; IP Box effective ~3%
Top personal income tax	55% above €1,000,000 (extended 2026); 50% €104,859–€1m; 48% €70,365–€104,859	35% top marginal; 0% up to €22,000
Dividend / CGT / interest (KESt)	27.5% flat on dividends & CGT; 25% on bank interest	Non-dom: 0% SDC on dividends/interest; 0% CGT on non-RE shares
Combined tax on distributed corporate profits	23% KöSt + 27.5% KESt = ~44.2% effective	15% CIT + 0% SDC (non-dom) ≈ 17.5% combined
Social security	Employer ~21% + employee ~18.12% (both uncapped on high salaries)	8.8% + 8.8% capped at €68,904 + 2.65% GESY each side
Wealth / IHT	No wealth tax; no IHT (abolished 2008, only Grunderwerbsteuer on real estate transfers)	No wealth tax; no IHT; no gift tax
Expat / flat-tax regime	§103 Zuzugsbegünstigung — discretionary Finance Minister benefit for researchers/artists; narrowly granted	Non-dom 17 years (no application fee); 50% exemption on salary >€55k for 17 years
Exit tax	§27(6) EStG: 27.5% KESt on unrealised gains in capital holdings; broad scope (portfolio covered); EU deferral available	No personal exit tax on shares
Days test	Wohnsitz (dwelling maintained for use) → residency from day one; Gewöhnlicher Aufenthalt >6 months retroactive	183-day rule OR 60-day rule with Cyprus ties

Why Austrian founders are looking at Cyprus in 2026

55% top rate — extended through 2026

The 55% 'Reichensteuer' on income above €1,000,000 was originally temporary (2016–2025) but has been extended through 2026. Combined with ~21% employer and ~18.12% employee social security (uncapped), the total wedge on high-salary earners is among Europe's worst. For founders drawing significant salary from a GmbH, this stacks with the 23% KöSt + 27.5% KESt on distributions to create a genuinely punitive combined burden. Cyprus tops at 35% with a €22,000 nil-rate band and 8.8% + 8.8% social insurance capped at €68,904. BMF/USP — 2026 tariff.

27.5% KESt on everything — no participation exemption for individuals

Austria's Kapitalertragsteuer is 27.5% flat on dividends (domestic and foreign), capital gains on securities (shares, ETFs, bonds, derivatives), and fund distributions. Bank-deposit interest: 25%. Crypto assets acquired from 1 March 2022: 27.5%. Critically, Austria has no participation exemption at the individual level — unlike many other EU jurisdictions, a substantial individual shareholder gets no discount. For a Cyprus non-dom receiving €500,000 of dividends: 0% SDC. For an Austrian receiving the same: €137,500 of KESt. The gap is structural.

~44.2% combined on distributed GmbH profits

Running profits through an Austrian GmbH: 23% KöSt on the corporate profit, then 27.5% KESt on the dividend distribution to the owner. Combined effective rate on distributed profit: 23% + (77% × 27.5%) = ~44.2%. For owner-managers, that's the real tax cost of extracting profits. A Cyprus company pays 15% CIT; for a non-dom shareholder, the distribution suffers 0% SDC + 2.65% GESY capped = ~17.5% combined. On €500,000 of distributed profits: Austria €221k, Cyprus €88k — roughly €133k/year of operating savings.

Wegzugsbesteuerung under §27(6) EStG — broad, no de-minimis for portfolio

Austria's exit tax (§27(6) EStG) applies at 27.5% KESt on unrealised gains in capital holdings when an individual transfers residence abroad. Critically, unlike Germany's §6 AStG (which requires ≥1% holding in a corporation), Austria's rule under §27 catches any portfolio participation — no minimum stake threshold for securities held privately. For EU/EEA moves, a Nichtfestsetzungsantrag (non-assessment application) defers the tax until actual disposal. Third-country moves: immediate assessment, payment may be split over 7 years for business assets (§6 Z6 EStG). Cyprus is EU — deferral is available. Planning usually includes (a) realising losses pre-departure to offset gains, (b) holding through a suitable structure, (c) timing key disposals. Gründungskanzlei — Wegzugsbesteuerung.

No non-dom regime — §103 is discretionary and narrow

Austria offers no broad non-dom or flat-tax regime comparable to Cyprus non-dom, Italy €300k, Greece Art. 5A, or Portugal's (closed) NHR. §103 EStG 'Zuzugsbegünstigung' allows the Finance Minister to discretionally tax foreign-source income of inbound scientists, researchers and artists at an average rate rather than top progressive rates — but it's application-based, selectively granted, and narrow in scope. For typical founders, Austria offers no holiday. Cyprus non-dom is codified, automatic (once you qualify as non-domiciled Cyprus resident), 17 years, with no minimum investment.

Leaving Austria: what breaks residency and what follows you

Residency test (§1(2) EStG). Unlimited Austrian tax liability arises if you have either (a) Wohnsitz — a dwelling maintained for continuous use, which triggers residency from day one (no day threshold), OR (b) Gewöhnlicher Aufenthalt — habitual abode >6 months (approximately 183 days), retroactive to day one once the 6-month mark is crossed. A retained Austrian apartment or house kept available can preserve Wohnsitz even if you spend most days in Cyprus.

§27(6) EStG — Wegzugsbesteuerung. 27.5% KESt on unrealised gains in capital holdings on transfer of residence abroad. Broader than Germany's §6 AStG — catches portfolio participations without a minimum stake threshold. EU/EEA moves: Nichtfestsetzungsantrag defers until actual disposal. Third-country: immediate, 7-year instalments for business assets.

Cyprus is EU — deferral is automatic on application. The relocation to Cyprus qualifies for Nichtfestsetzung; payment falls due on the actual disposal, gift, or other taxable event of the underlying holding.

No equivalent to Germany's §2 AStG 10-year tail. Austria does not apply a 10-year extended limited tax liability on citizens emigrating to low-tax jurisdictions in the same way. Once non-resident, non-residents pay Austrian tax only on Austrian-source income (Austrian real estate, Austrian-employment days, Austrian-company dividends with treaty reductions, etc.).

Abmeldung at Meldeamt. Civil deregistration at the Meldeamt is necessary but not sufficient. What ends unlimited tax liability is genuine abandonment of Wohnsitz and gewöhnlicher Aufenthalt — close or sublet the Austrian dwelling, document the Cyprus home as permanent residence, resolve the tie-breaker clearly in Cyprus's favour.

The Austria–Cyprus double tax treaty

The Austria-Cyprus DTT was signed on 20 March 1990, in force since 1 January 1991, amended by Protocol in 2012 (effective 2013) and MLI. Dividends (Art. 10): 10% maximum withholding (no reduced rate tier for substantial shareholders — this treaty is less favourable than some newer Cyprus treaties). Interest (Art. 11): generally 0% (some exemptions). Royalties (Art. 12): 0%. Tie-breaker (Art. 4): standard OECD cascade. For intra-EU corporate shareholdings ≥10%, the EU Parent-Subsidiary Directive delivers 0% at source independently of the treaty, subject to substance/anti-abuse requirements. Cyprus under domestic law imposes no outbound WHT on dividends or interest to non-residents.

FAQs

I have an Austrian GmbH. What's the cleanest path?

Three options: (1) keep the GmbH Austrian, draw dividends — 23% KöSt on profits + 27.5% KESt on distributions = 44.2% combined. Alternatively (if the Cyprus holding qualifies under PSD with ≥10% for ≥24 months and real substance), potentially 0% KESt at source via the Directive. (2) Interpose a Cyprus holding over the GmbH, migrate business activity gradually, and manage the §27(6) exit consequences. (3) Wind down the GmbH, pay the KESt on retained earnings distribution, and start fresh in Cyprus. Each depends on GmbH value, IP, customer contracts, and your timeline.

Austria's §27(6) covers all portfolio participations — so a small retail portfolio triggers exit tax?

Technically yes, but in practice the rule is oriented at meaningful portfolios. For a modest retail portfolio with small unrealised gains, the deferral (Nichtfestsetzung) into an EU move like Cyprus means no immediate tax outflow; you pay only if you sell while non-resident. If you never sell — the tax never falls due. For significant portfolios, the deferral is still the working mechanism, and planning typically includes harvesting losses pre-departure and stepping up cost basis where feasible.

I'm a non-Austrian-national. Does anything different apply to me?

Austria's Wegzugsbesteuerung under §27(6) applies to residents regardless of nationality. What distinguishes this from Germany's §2 AStG is that Austria doesn't add a post-departure nationality-based tail. Once you're non-resident (Wohnsitz and habitual abode genuinely abandoned), Austria taxes only Austrian-source income. Non-Austrian-nationals don't get extra exposure after departure.

What about Austrian pension rights?

Past contributions to ASVG/PVA remain credited — pension rights persist. On emigration, ongoing Austrian contributions stop (unless you keep Austrian employment). The 1990 DTT typically allocates pension taxation to the residence state. Austrian state pensions paid to a Cyprus resident are taxed in Cyprus, where Cyprus's 5% flat option on foreign pensions above €3,420 (or progressive PIT under €3,420) usually produces a lower outcome than 55% + social security.

Does the 1990 DTT give 0% on dividends?

Not from Austria — the treaty caps at 10% Austrian WHT on dividends paid to Cyprus beneficial owners (no reduced corporate-parent rate in this older treaty). For intra-EU shareholdings ≥10%, the EU Parent-Subsidiary Directive overrides to 0% if the Cyprus parent has genuine substance and meets §7 Abs. 1 Z 1 KVG anti-abuse. Cyprus side: 0% domestic outbound on dividends to Austria, so the Cyprus→Austria direction is clean.

How long does a Austria-to-Cyprus relocation typically take?

Usually 3–4 months end-to-end: 2–3 weeks for Cyprus company + tax residence, 4–6 weeks for immigration (Yellow Slip — Austrians as EU citizens move freely), 4–8 weeks for Cyprus banking, and parallel Austrian-side work (Abmeldung, Finanzamt notifications, §27(6) Nichtfestsetzungsantrag filing, potential final-year Einkommensteuererklärung). For GmbH owners add 1–2 months of corporate structuring.

Page last reviewed April 2026. This page provides general estimates only — not legal, tax or financial advice. No solicitor–client relationship is created by reading it. Personal situations depend on family, source of income and timing. Book a free consultation for written advice.

Considering the move from Austria?

Book a free 30-minute consultation with a licensed Cyprus lawyer. We send a written scope-of-work with fixed fees within 24 hours.

Book free consultation