Austria: local rules

Austria has no single transfer pricing article. The arm's length principle comes from §6 no. 6 EStG 1988 (assets and services between related businesses are valued as if dealt with an independent party), the hidden profit distribution and capital contribution rules in §8 KStG 1988, and Article 9 of the tax treaties. Documentation duties are in the Transfer Pricing Documentation Act (VPDG, 2016) and its ordinance (VPDG-DV), plus the general books and records duties in §§124, 131 and 138 BAO. The BMF Transfer Pricing Guidelines 2021 (VPR 2021, updated by the maintenance decree of 11 March 2025) follow the OECD Guidelines 2022 and are an interpretation aid, not law.

An Austrian business unit of a multinational group must prepare a master file and a local file if its revenue exceeded EUR 50m in each of the two previous financial years (§3(2) VPDG). The duty ends from the next year if revenue stays at or below the amounts in two years in a row. Once the corporate income tax return has been filed, the tax office can ask for both files, and they must be handed over within 30 days of the request (§8(2) VPDG). A master file can also be requested if a foreign group entity must prepare one under foreign rules (§3(3) VPDG). Documents may be in German or English. Entities below the thresholds need no VPDG structure, but they must still be able to show arm's length pricing under §§124, 131 and 138 BAO, and the records should exist when the return is filed (VPR 2021 Rz 407).

Austria accepts the OECD methods: comparable uncontrolled price, resale price, cost plus, TNMM and profit split (VPR 2021 Rz 50). The method that gives the most reliable result is used. If two are equally reliable, the standard methods are preferred over profit methods, and the CUP method comes first. An interquartile range is used when comparability gaps remain (Rz 77). If the price is outside the range, the tax office adjusts to a point inside it and may use the median (Rz 78). Database studies must show every search step and may be refreshed every three years (Rz 424 to 426).

The VPDG has no special fine for a missing master or local file. The general tools apply: the tax office may estimate the tax base (§184 BAO), charge a late-filing surcharge of up to 10% (§135 BAO), and impose coercive penalties of up to EUR 5,000 each (§111 BAO). Documentation that meets the rules is presumed correct and the tax office must prove the price is not arm's length (VPR 2021 Rz 409). A missing, late or wrong CbC report is a fiscal offence: fine up to EUR 50,000 for intent and EUR 25,000 for gross negligence (§49b FinStrG). Pillar Two reports carry fines up to EUR 100,000 for intent and EUR 50,000 for gross negligence (§75 MinBestG).

The Mindestbesteuerungsgesetz (MinBestG) applies the IIR (PES) and the QDMTT (NES) to fiscal years that begin on or after 31 December 2023, and the UTPR (SES) to fiscal years that begin on or after 31 December 2024 (not for groups whose parent is in an EU state that used the deferral option). It covers groups with revenue of at least EUR 750m in two of the four prior years. Every Austrian entity files the Mindeststeuerbericht (GIR) in XML through FinanzOnline, or names the entity that files it (Notification 1 or 2). It is due 15 months after year end, 18 months for the transition year, and never before 30 June 2026. The tax is self-assessed in a Voranmeldung and falls due on 31 December of the second calendar year after the year in which the fiscal year ends. The parent must also appoint the taxable Austrian entity and prove it before the end of the calendar year in which the fiscal year ends.

Groups with consolidated revenue of at least EUR 750m file a CbC report through FinanzOnline within 12 months of year end if the ultimate parent is resident in Austria or an Austrian entity stepped in (§§4 and 8 VPDG). Each Austrian entity must say by the last day of the reported year whether it is the ultimate or surrogate parent, or name the reporting entity. Unilateral rulings (§118 BAO) and bilateral or multilateral APAs are available, and mutual agreement procedures follow the tax treaties and EU rules. Interest deductions are limited to 30% of tax EBITDA with a EUR 3m allowance (§12a KStG). A correction usually takes the form of a hidden profit distribution, which can bring dividend withholding tax. There is no annual TP return form.