Mergers & Acquisitions

Last reviewed 21 Aug 2023

Financing

Financial assistance by the subsidiary

Legal admissibility must be examined on a case-by-case basis ("hidden return of capital contributions")

Subordinate debt (mezzanine capital)

corresponding agreements are permissible. Interest from subordinated liabilities is generally tax deductible

Interest expenses for acquisition financing

no restrictions, restrictions on interest from shareholder financing

Interest expense on subordinate debt

restrictions exist in the case of shareholder loans. See thin capitalisation

EU interest barrier

the national provisions on the tax-recognised interest rate and thin capitalisation apply

Squeeze-out options

Buy-out of minority shareholders (squeeze-out)

Minority shareholders with an interest of up to 10% can be forced out of corporations. The taxation of the severance payment is based on the general taxation principles

Capital gains – corporations and partnerships

Capital gains are generally taxable. A reduction of the tax base from the sale of business entities (corporations and partnerships) to 50% is provided for (capital gains reduction). The prerequisite is that there must be an interest of at least 8% and the 6-month holding period must be fulfilled.
During the holding period, at least one full employment relationship (40 hours per week) must exist in the sold business entity.
In the case of sale by natural persons, the following applies: The tax rate of 25% is reduced in five-year intervals. After 5 years it will be 20%, after 10 years 15%. The tax exemption after 20 years was abolished as of 2023. No preferential treatment is provided for international holding companies

Sale of shares in a joint stock corporation

see above

Sale of shares in a limited liability company

see above

Sale of interest in a partnership

Disposals of partnerships are treated in the same way as corporations.

International participation exemption

There is no provision for international participation exemption in the event of shareholdings being sold

Sale of business

Definition

There is no legal legal definition. In addition to a share deal, an asset deal is always possible.

Valuation

Recognition at the contractually agreed values (acquisition costs); if applicable, recognition of goodwill

Goodwill

Goodwill is to be amortised according to its useful life. The partial value depreciation of goodwill acquired for consideration is recognised for tax purposes up to 20% of the original value. A partial value depreciation in excess of this can be claimed in the following years, applying the same restriction

Mergers and demergers

Types of mergers described by commercial law

In accordance with the Austrian Demerger Act (SpaltungsG) and the merger provisions in the regulations on the individual legal forms in the Business Corporations Act (Gesetz über Wirtschaftsgesellschaften)

Valuation

In the case of tax neutrality, book value continuation, otherwise fair value or book value in the case of group formations

Valuation in financial accounting

Fair value, group reorganisations at book value

Goodwill amortization

Not deductible in the context of tax-neutral reorganisations. In the case of tax-dependent reorganisations, see above

Tax treatment of revaluation

Tax neutrality only to the extent approved by the tax authorities (formal procedure)

Contributions (transfer of assets into the capital of a company)

Contributions in kind

Recognition at fair value. If necessary, an expert opinion is required

Tax treatment

Tax law follows commercial law

Goodwill amortisation

See above