How to Value a Company in Austria: KFS/BW 1, Multiples and What Is Left After Tax

In Austria, company value is calculated from three inputs: adjusted EBITDA, a sector multiple, and net debt deducted from the resulting enterprise value. The output is a range, not a single figure — and it is not yet the amount that reaches you: selling shares in an Austrian GmbH held privately triggers 27.5 percent capital gains tax on the gain.

For your own orientation that calculation is enough. The moment you have to defend the figure to a bank, a court, the tax office or heirs being bought out, Austria applies its own framework: the KFS/BW 1 expert opinion. If you need a defensible business valuation for an actual transaction, an online calculator will not get you far.

Value, price and payment structure are three different things

Company value is the result of a calculation, price is what a specific buyer pays after due diligence, and payment structure decides when the money arrives. A calculated value of EUR 5 million can turn into an offer of EUR 3.5 million at closing, EUR 1 million as an earn-out and EUR 500,000 held back against warranties. The headline number matches; the economics do not. The methods are covered in the overview of valuation methods; this article is about what works differently in Austria.

KFS/BW 1: the Austrian valuation standard

Germany has IDW S1; Austria has the KFS/BW 1 expert opinion, issued by the technical committee for business administration and organisation of the Austrian Chamber of Tax Advisers and Auditors. Anyone producing a valuation report in Austria that has to hold up in court, at a bank or before the tax authorities works to this standard.

The revised version was adopted on 6 November 2025 and published in December 2025. It is binding for valuations where the engagement is accepted after 30 June 2026. It distinguishes four value concepts:

• Objectified company value — continuation under the existing concept, without any particular buyer's synergies. The typical figure for courts and public authorities.
• Market value — an exchange value assuming a sale, anchored in actual market conditions. Newly introduced and the most relevant concept for transactions.
• Typified subjective company value — the perspective of a specific owner, but only with assumptions an outsider can verify.
• Arbitration value — the balancing figure in shareholder disputes and compensation cases.

The purely subjective value has been dropped from the standard's scope. Capitalised earnings, discounted cash flow and multiples are methodologically unchanged; what has tightened is the plausibility testing of the business plan, which must now also be checked externally against market and competitive analysis.

This matters for smaller companies. The standard no longer defines SMEs by size thresholds but by qualitative characteristics such as owner dependence and a narrow customer base. The decisive test is transferable earning power — how much of the profit survives once the owner is no longer in the business. On the German equivalent, see the article on IDW S1.

The calculation in four steps

1. Adjust EBITDA. Operating profit before interest, tax, depreciation and amortisation, stripped of everything that would not arise under new ownership. A three-year average weighted towards the most recent year is standard.
2. Apply a multiple. Adjusted EBITDA times a sector factor gives enterprise value — the worth of the operating business regardless of how it is financed. How the factor is derived is set out in the article on the multiples method.
3. Deduct net debt. Interest-bearing liabilities off, cash on. In Austria, severance and pension provisions belong here too: genuine payment obligations that buyers treat as debt-like. Details under net debt.
4. Sanity-check the result. The figure has to be consistent with asset backing, debt capacity and the market. A number no buyer can finance is not a value.

Adjustments that recur in Austrian SMEs

Managing director's remuneration. The owner-manager usually draws a salary optimised for tax, which says nothing about the market cost of the role. For valuation it is replaced by what an external management team would cost. Where the actual salary sits below that, adjusted EBITDA falls.

Operating property. If the premises sit in private ownership or a separate property company, the rent has to be tested against market terms. Rent set too low flatters EBITDA; rent set too high depresses it. If the property is sold with the business, it is valued separately.

Private items, family salaries and one-off effects. Vehicles, travel, insurance, relatives on the payroll beyond their actual contribution, plus litigation, relocation or an unusually large single contract. Anything privately motivated or genuinely non-recurring is added back — with evidence, or the buyer strikes it out in due diligence.

What multiples are realistic for Austrian SMEs

Listed-company multiples do not apply. A quoted group is valued on a factor that prices in share liquidity, diversification, management depth and access to capital markets. None of that applies to a business with 40 employees in Upper Austria.

Nor is there an official Austrian multiples table; the published ranges come mainly from German surveys and transaction databases. What moves the factor in a specific case: the size of EBITDA, customer concentration, recurring revenue, margin relative to peers, the second management tier, deferred capital expenditure, order book — and above all how far the result depends on the owner personally. Sector ranges appear in the article on EBITDA multiples.

Worked example: from EBITDA to equity value

An Austrian supplier business structured as a GmbH, shares held 100 percent privately by the founder.

Adjustment	EUR
EBITDA per the profit and loss account	1,200,000
Managing director's remuneration to market level	−90,000
Property rent to arm's length	−36,000
Private items added back	+12,000
One-off litigation cost	+14,000
Adjusted EBITDA	1,100,000

At a factor of 5.5, enterprise value is 1,100,000 × 5.5 = EUR 6,050,000.

Net debt	EUR
Bank debt	1,400,000
Lease liabilities	250,000
Severance and pension provisions	300,000
less cash	−550,000
Net debt	1,400,000

Equity value: 6,050,000 − 1,400,000 = EUR 4,650,000 — before tax and before any working capital adjustment.

From company value to net proceeds: Austrian tax

Shares in a corporation held privately. The gain is taxed at the special rate of 27.5 percent under section 27a of the Austrian Income Tax Act. In the example: acquisition cost equal to share capital of EUR 35,000, a gain of EUR 4,615,000 and tax of EUR 1,269,125. Net proceeds are EUR 3,380,875.

Selling through a holding company. If an Austrian corporation holds the shares, corporate income tax of 23 percent applies instead of the 27.5 percent, for as long as the money stays in the holding company. Distributing it to the individual adds capital gains tax on top.

Sole proprietorship or partnership interest. No special rate; the gain is taxed at ordinary progressive rates. In return there is an allowance of EUR 7,300, the option to spread the gain over three years, and the half rate under section 37 paragraph 5 of the Income Tax Act, which reduces income tax to half the applicable average rate. It requires that the business is sold or wound up because the taxpayer has died, is incapacitated, or has turned 60 and is ceasing gainful activity; in every case seven years must have passed since the business was founded or last acquired for consideration.

Operating property sold with the business. Gains from property disposals are taxed at the special rate of 30 percent under section 30a of the Income Tax Act, in both the private and business sphere, with exceptions for commercial property traders. A broader view is set out in the article on tax on a company sale; your own case belongs with your tax adviser.

When a calculator is enough and when you need a formal report

A calculator produces a range from a handful of inputs. Useful for initial orientation — but it knows nothing about your customer concentration or owner dependence.

You need a formal report under KFS/BW 1 whenever a third party has to accept the figure: bank financing, compensating a departing shareholder, dividing an estate, divorce settlements, restructurings, proceedings before the tax authorities. For an actual sale process a third route is the usual one: a valuation that prepares your negotiating position — documented adjustments, a range rather than a point estimate, a derivation that survives due diligence.

FAQ

How do I calculate the value of my business in Austria?

Adjust EBITDA for the managing director's salary at market level, non-arm's-length rent, private items and one-off effects. Multiply by a sector factor and deduct net debt, including severance and pension provisions. What remains is the pre-tax value of the shares, best expressed as a range.

What is the KFS/BW 1 expert opinion?

KFS/BW 1 is the Austrian standard for business valuation, issued by the technical committee for business administration and organisation of the Austrian Chamber of Tax Advisers and Auditors. The revised version was adopted on 6 November 2025 and is binding for engagements accepted after 30 June 2026. It distinguishes objectified company value, market value, typified subjective value and arbitration value.

How does KFS/BW 1 differ from IDW S1?

Both rest on the same logic: future financial surpluses discounted at a risk-adjusted rate. The differences lie in the issuing body, the value categories and which courts recognise which report. In Austria, courts, banks and authorities expect a report under KFS/BW 1.

How much tax will I pay on selling my GmbH shares?

If the shares are held privately by an individual, the gain is taxed at the special rate of 27.5 percent under section 27a of the Income Tax Act, calculated on proceeds less acquisition cost. If a corporation holds the shares, corporate income tax of 23 percent applies, with capital gains tax on any later distribution to the individual.

Is there tax relief when selling a sole proprietorship?

Yes. Alongside an allowance of EUR 7,300 and the option to spread the gain over three years, the half rate under section 37 paragraph 5 of the Income Tax Act may apply. It requires that the business is sold or wound up because the taxpayer has died, is incapacitated, or has turned 60 and is ceasing gainful activity — and that seven years have passed since the business was founded or last acquired for consideration.

Can I derive my company value from the commercial register?

Only to a limited extent. Corporations file annual accounts within nine months of the balance sheet date, but small GmbHs file only the balance sheet and notes, without the profit and loss account. For precisely the businesses that would serve as comparables, the earnings side is missing.