Key takeaways
- In Austria, business meals with clients are 50% deductible for income and corporate tax when they serve advertising purposes (promoting the business) and are documented; pure hospitality and meals without an advertising character are not deductible.
- Companies pay 23% corporate income tax; equipment is depreciated straight-line over useful life, low-value assets up to EUR 1,000 can be expensed immediately, cars are depreciated over at least 8 years, and the investment allowance (Investitionsfreibetrag) gives an extra 10% (15% for green investments) – temporarily 20% (22% green) for investments made between 1 November 2025 and 31 December 2026.
- Non-deductible items include fines, personal living expenses, entertainment (other than qualifying business meals) and, above limits, passenger-car costs (luxury limit of EUR 40,000).
Last reviewed: October 2026
Austria's deduction rules are strict but predictable. This guide covers what companies and self-employed professionals can deduct in 2026, with special attention to the question we are asked most often: are business meals 50% deductible?
Austria business deductions – key figures (2026)
| Item | Rule |
|---|---|
| Corporate income tax | 23% |
| Business meals with advertising purpose | 50% deductible (documented) |
| Low-value assets | Immediate expense up to EUR 1,000 |
| Passenger cars | Depreciated over min. 8 years; costs above EUR 40,000 purchase price not deductible |
| Buildings | 2.5% (business use) / 1.5% (residential rental) annual depreciation |
| Investment allowance | 10% of qualifying investment (15% eco); temporarily 20% (22% eco) for investments from 1 Nov 2025 to 31 Dec 2026 |
| Losses | Carried forward; offset limited to 75% of profit |
Are business meals deductible in Austria?
Austrian law generally treats representation expenses (entertaining clients) as non-deductible personal or prestige expenses. The exception: business meals where the taxpayer shows that the meal has a predominantly advertising character – i.e. it serves to promote the business, products or services (e.g. presenting a project to a prospective client) – are 50% deductible.
Conditions in practice:
- a clear business purpose with advertising character;
- documentation: date, participants, purpose, receipt;
- reasonable amounts.
For VAT, input tax on such meals can generally be deducted in full if the expense is business-related.
Example: A Vienna software company invites a prospective client to lunch to present its product (EUR 200). It documents the participants and purpose and deducts EUR 100 for corporate tax. A celebratory dinner with long-standing clients without promotional content would not be deductible.
Other deductible expenses
- Personnel costs, social security and pension contributions;
- rent, utilities, software, marketing, professional fees;
- depreciation of equipment and buildings over useful life;
- interest on business loans (interest-limitation rule: 30% of EBITDA above EUR 3 million net interest);
- travel costs and per diems at statutory rates;
- R&D: the research premium (14% cash premium on qualifying R&D costs);
- for individual entrepreneurs and freelancers, the profit allowance (Gewinnfreibetrag): 15% of profits up to EUR 33,000 (max. EUR 4,950) without any investment, and a further 13%/7%/4.5% on higher profits if invested in qualifying assets or securities.
Not deductible (or limited)
- fines and penalties;
- representation/entertainment beyond qualifying business meals;
- personal living costs, even if partly business-related (strict mixed-use rules);
- passenger-car costs above the luxury limit;
- corporate income tax itself.
Frequently asked questions
Are business meals 50% deductible in Austria?
Yes, if the meal has a predominantly advertising character – promoting your business to clients or prospects – and is properly documented. Pure hospitality or prestige dinners are not deductible.
What is the corporate tax rate in Austria?
23% on taxable profits.
Can I expense small purchases immediately in Austria?
Low-value assets up to EUR 1,000 can be fully deducted in the year of purchase instead of being depreciated.
Are company cars deductible in Austria?
Yes, but passenger cars are depreciated over at least eight years and costs related to a purchase price above the EUR 40,000 luxury limit are not deductible. Zero-emission cars have more favourable rules.
Related guides
- Tax incentives for expats in Austria
- How to obtain tax residency in Austria
- Business expenses in Switzerland
Sources
- Austrian Income Tax Act (EStG) s.20 (non-deductible expenses), Corporate Income Tax Act (KStG)
- Austrian Federal Ministry of Finance (bmf.gv.at) – Income Tax Guidelines on representation expenses
This guide is general information, not personalised tax advice.
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