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HMRC internal manual

Double Taxation Relief Manual

Double Taxation Relief Manual: Guidance by country: Austria: Dividends

The Austrian tax deducted from dividends at the agreement rate of 15 per cent (or 5 per cent where the beneficial owner of the dividends is a United Kingdom resident company controlling directly or indirectly 25 per cent of the voting power in the company paying the dividend) qualifies for credit as a direct tax (see INTM164010 (c)). The reductions to the above rates are not given if the dividends are effectively connected with (see INTM153110) a business carried on by the United Kingdom resident recipient through a permanent establishment in Austria.

The agreement does not provide for credit relief for underlying tax (see INTM164010 (d)) and where appropriate unilateral relief for underlying tax should be given to a company in respect of dividends paid by an Austrian company (see INTM164360).

The EC Parent-Subsidiary Directive has applied to Austria from 1 January 1995 (see INTM164030). This bars the imposition of withholding taxes on dividends paid by a company resident in one Member State of the Community to a company resident in another Member State, where the company receiving the dividends holds a minimum of 10 per cent (from 1 January 2009) of the capital of the company paying the dividend. The level of control required to gain exemption was 25% until 31 December 2004, 20% until 31 December 2006 and 15% until 31 December 2008.