Income tax allowance
Invest your profits and benefit twice.
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Use your tax allowance to save taxes
Entrepreneurs and freelancers can reduce their tax burden by investing in certain securities or capital assets.
Please be aware that investing involves both opportunities and risks.
The profit allowance under Austrian law is a tax benefit available to individuals with business income. This regulation is defined in § 10 of the Austrian Income Tax Act (EStG).
The profit allowance consists of two parts:
- Basic Allowance: This applies to all taxpayers and is automatically considered.
- Investment-Based Profit Allowance: This can be claimed additionally, provided certain investments are made.
The investment-based profit allowance is tied to the purchase or production of specific assets. These assets must:
- Be depreciable tangible fixed assets
- Have a useful life of at least four years
- Belong to the fixed assets of a domestic business or permanent establishment
Alternatively, certain securities – such as specific investment funds – may qualify as eligible assets. These funds meet legal requirements for tax-effective investment. After a minimum holding period of four years, they can be sold without retroactive taxation.
Since January 1, 2022, the basic allowance is up to 15% of business profits.
For profits up to €33,000, the allowance is granted automatically without the need for investment (up to €4,950). For profits exceeding €33,000, the allowance can be increased up to €46,400 through eligible investments, such as qualifying securities.
- Natural persons with business income, including:
- Income from trade or business
- Income from self-employment
- Income from agriculture and forestry
- In partnerships (e.g., OG or KG), each partner can claim the allowance based on their share of the profit.
- The profit must be attributed to a natural person
- Business income must be present
- The profit must be determined via cash accounting or accrual accounting
Taxpayers using a fiscal year different from the calendar year may be able to claim the allowance earlier. It is recommended to consult with a tax advisor.
Opportunities and Risks
Opportunity for Value Growth
Your money is invested in promising sectors.
Increased Profit Allowance
With eligible investments, you can increase your allowance up to €46,400.
Building Reserves
You can create tax-advantaged reserves by purchasing or producing certain assets.
Price Fluctuations
Fund prices may fluctuate significantly due to various influencing factors.
Subject to Change
Legal or regulatory changes may affect the tax treatment.
Potential Capital Loss
Investing in capital markets may result in a loss of capital.
Which funds are eligible for tax allowances?
The funds listed below are eligible for the profit allowance under Section 10 of the Austrian Income Tax Act. These funds meet the legal requirements for a tax-effective investment. After a holding period of four years, you can sell the funds without incurring additional taxes. Please note that investing in securities involves not only the opportunities described but also risks.
In addition to the funds listed below, ERSTE IMMOBILIENFONDS and ERSTE RESPONSIBLE IMMOBILIENFONDS are also eligible to be held as securities coverage for Austrian pension provision requirements. ERSTE LAUFZEITFONDS KMU 2028 and ERSTE LAUFZEITFONDS KMU 2029 are not available anymore.
Please note that investments in securities entail risks in addition to the opportunities presented here.
Income tax allowance funds
Important information: Please note the disclaimer and legal notes at the bottom of each fund page. Further information and documents, as well as important legal information on the respective fund, in particular specific information on funds managed by other management companies, can be obtained by clicking on the fund name in the fund overview above.
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