Consideration of Losses of Foreign Group Members

The "Consideration of Losses of Foreign Group Members" enables capital companies and comparable corporations operating Austria-wide within corporate groups to recognize losses of their foreign subsidiaries for tax purposes. Within the framework of a modern group taxation concept, foreign losses are attributed to the taxable income domestically, of which up to 75% of the sum of the own income of fully taxable group members can be deducted. The grant thus aims to strengthen location attractiveness and enhance the international competitiveness of Austrian corporate groups.

The funding is available indefinitely and is provided through tax savings. It is based on the Corporate Income Tax Act 1988 (§ 9 para. 6), which regulates the formation of a corporate group as well as the requirements for loss allocation. A prerequisite is the entry of foreign losses in Annex K1g to the corporate tax return K1 as well as the timely submission of the return by April 30 (or by June 30 in case of electronic submission via FinanzOnline). A formal application for group taxation must be submitted to the competent tax office using the official form. The tax effects of the loss allocation apply upon issuance of the assessment notice and are automatically part of the annual corporate tax assessment. Companies wishing to professionally utilize the exchange of domestic and foreign results benefit from this innovative solution to enhance the quality of the business location.