Tax on Selling a Business in Austria: What Is Left After Tax

In Austria the tax bill on a business sale is decided above all by the legal form: selling a GmbH share (a share in an Austrian limited company) attracts a flat 27.5 per cent on the gain, while selling a sole trader business or a partnership interest attracts the progressive income tax tariff — mitigated by an allowance, the half average tax rate or a three-year spread.

For the sale of an Austrian limited company, our approach to selling a GmbH covers the process from valuation to the notarial deed.

The question "what is left after tax?" often does more to decide whether a sale is attractive than the purchase price itself. And the answer starts not with the tax office but with the legal form and the structure of the deal. This article sorts the cases for Austria; the detailed calculation belongs with your tax adviser in every instance.

The one factor that governs everything: structure

Before the amount comes the question of the how. Two switches shape the tax burden.

First, the legal form: an interest in a corporation (GmbH) is taxed differently from the business of a sole trader or an interest in a partnership (OG or KG, the Austrian general and limited partnership forms).

Second, the deal structure: are you selling shares (a share deal) or individual assets of the business (an asset deal)? The difference is set out in asset deal or share deal — in tax terms it separates two worlds.

Legal form / structure	Taxation of the gain
GmbH share held privately (share deal)	27.5 % special tax rate
GmbH share held via a holding company	23 % corporation tax, participation exemption may apply
Sole trader / partnership	Income tax tariff, with reliefs (§ 24, § 37 EStG)
Asset deal at the level of the GmbH	23 % corporation tax, then 27.5 % on distribution

Every decision that has to hold up rests on a company valuation.

Selling a GmbH: 27.5 per cent on the gain

Where a natural person sells GmbH shares, the gain on disposal — proceeds less acquisition cost — is subject to the special tax rate of 27.5 per cent (WKO, the Austrian Economic Chamber). Roughly three quarters of the gain remains. A worked example is in selling a GmbH: a tax calculation, and the underlying system in selling a GmbH: tax.

Instead of the 27.5 per cent, ordinary taxation at the tariff can be elected on application. That is only worthwhile where the personal average tax rate is lower — on a multi-million sale, practically never.

Where the share sits in a holding GmbH, corporation tax of 23 per cent (since 2024) applies at the level of the seller. Only the special case of an international participation exemption in a foreign subsidiary remains tax-free.

Sole traders and partnerships: the tariff, but with reliefs

On the sale of a sole trader business or of an interest in an OG or KG, the gain on disposal forms part of taxable income and is in principle subject to the progressive tariff of up to 55 per cent. That is not the end of the story, though — the law provides three reliefs, available as alternatives (WKO).

Allowance (§ 24 EStG): 7,300 euros of the gain remain tax-free. Relevant above all where the gain on disposal is small.

Half average tax rate (§ 37 Abs 5 EStG): the gain is taxed at only half the average tax rate. The conditions: seven years must have passed since the business was opened or since the last acquisition for consideration, and the sale must take place because the owner has died, has become incapacitated, or has reached the age of 60 and is giving up gainful activity. That cessation must be genuine: anyone planning to resume loses the relief, as recent case law in 2026 confirms (TPA).

Three-year spread: the gain is spread evenly over three years, smoothing the progression. Here too seven years are required — and the allowance and the half rate then fall away.

The particulars for sole traders are set out in selling a sole trader business.

Asset deal: why the GmbH pays twice

Where it is not the shareholder selling his shares but the GmbH selling its assets, the gain arises at company level and is subject to corporation tax of 23 per cent. If the money is then to reach the shareholder, Kapitalertragsteuer, or KESt (Austrian capital gains tax on investment income), of 27.5 per cent is added on distribution. In total a noticeably heavier burden than a share deal — which is why sellers prefer the share deal and buyers the asset deal. The details for Austria are in asset deal Austria.

Incidental costs that reduce the net proceeds

Not every burden is tax on the gain, but each one reduces what is left. A share deal attracts no Grunderwerbsteuer (Austrian real estate transfer tax); where an asset deal includes property, it does. Adviser and valuation fees reduce the net proceeds under the special tax rate but not the tax itself — they are not deductible there. Items like these belong in the net calculation before you judge a purchase price to be "enough".

And in Germany?

German sellers face a different system. Shares in corporations are captured either under the partial income procedure or at a flat rate, depending on the holding constellation; for the sale of a business, German law provides an allowance and a reduced tax rate under §§ 16 and 34 EStG, as well as the one-fifth rule. The underlying question remains the same as in Austria — legal form and structure first — but the numbers differ. Anyone selling across borders should settle the question of residence early.

FAQ

How much tax do I pay on selling my GmbH?

As a natural person, 27.5 per cent on the gain on disposal, that is proceeds less acquisition cost. Ordinary taxation at the tariff can be elected on application, but is only cheaper where income is low.

What is the half average tax rate on a business sale?

A relief under § 37 EStG: the gain on disposal is taxed at only half the average tax rate. The conditions are seven years of business operation and a sale prompted by death, incapacity, or the owner having reached the age of 60 and giving up gainful activity.

Why is an asset deal unfavourable for sellers in tax terms?

Because the gain is charged first to corporation tax at 23 per cent and then again, on distribution, to KESt at 27.5 per cent. A share deal avoids that double layer.

Can I legally reduce the tax on selling my business?

Yes — through the choice of structure (a share deal rather than an asset deal), through use of the allowance, the half average tax rate or the three-year spread, and through timing. Those levers belong years before the sale, not in the final week of negotiation.

How is a GmbH share taxed if it is held through a holding company?

The gain is charged to corporation tax of 23 per cent at the level of the holding company. Tax exemption only applies in the special case of an international participation exemption in a foreign subsidiary.

Are adviser fees deductible against the tax on a sale?

Not under the special tax rate. Adviser and valuation costs reduce the net proceeds, but not the tax itself, so they belong in the net calculation rather than in the tax computation.

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A company sale is the most important transaction of an owner life. Take independent, discreet advice — IGCP Capital Partners. igcp.at

For the Austrian perspective on the same transaction: selling a GmbH in Austria.