Austria raises tax break on research to 14%


In line with the agreement in the 2017/18 government programme, the Austrian parliament resolved to increase the tax break on research by an additional 2% with effect from 1 January 2018.

Regardless of their size, companies conducting research can already claim 12% of their research and development (R&D) expenditure as tax exempt. As of 2018, 14% of R&D costs will be reimbursed in the form of a cash payment or tax credit.

The tax break on research was last increased at the start of 2016 from 10 to 12%. The tax incentives will also be accompanied by a broad range of direct funding and reductions in bureaucracy for start-ups and innovative companies. And this mix of measures is already proving successful: in 2017, R&D investment in Austria increased for the first time to 11.3 billion euros. With its research quota of 3.14% of GDP, the Alpine republic has now moved into second place within the European Union. Around half of this comes from the corporate sector and over 15% from abroad.

Research tax incentive model attracts international businesses
Examples like Infineon Technologies, Boehringer Ingelheim, BMW, Magna and Borealis demonstrate just how much Austria is in demand as a research location among many international businesses. In Carinthia, international corporations are also expanding their location. Intel Corporation, as well as the semiconductor group Infineon Technologies AG, which is the most research-intensive company in Austria.

European Commission: Austria is a leading ‘strong innovator’
Success within the competitive European environment is also a reflection of Austria’s success as a research location. In the recently published ‘European Innovation Scoreboard’, the Alpine republic climbed up to 7th place and now leads the group of ‘strong innovators’. When it comes to R&D investment from the private sector, Austria ranks behind Sweden in 2nd place in the EU-28. By 2020, Austria is planning to become one of Europe’s ‘innovation leaders’.