A new tax treaty between Austria and Israel
will replace the old one concluded in 1970. Compared to the old agreement, the new one will include a reduced withholding tax rate on dividends and interest.
Our lawyers in Austria
can give you complete information about how the provisions of the tax treaty are important to foreign investors from Israel.
Changes in the new tax treaty
Austria and Israel negotiated the new tax treaty in November 2016 and the agreement passed the approval of two Austrian Councils in June and July 2017.
Compared to the previous agreement version, the new double tax treaty between Austria and Israel has the following changes:
- a reduction of the withholding tax on dividends from 25% to 0%;
- a reduction of the withholding tax on interest from 15% to 5%;
- the 183 days spent in the country which needed to be fulfilled by an individual for taxation purposes will be calculated for any period of twelve months which begins or ends in the respective fiscal year; the previous version stipulated that the 183 days were calculated in the fiscal year.
As far as the reduced tax on dividends
is concerned, it will apply if the company receiving the dividends directly holds at least 10% of the capital of the company making the dividend payment.
The new double tax treaty between Austria and Israel passed the Austrian National and Federal Council in the summer of 2017. The tax treaty needs to be published and our team of attorneys in Austria
can give you up-to-date information the status of the treaty and its applicability.
Avoidance of double taxation in Austria
Austria has signed more than 70 double tax agreements
with countries worldwide. The provisions of these agreements for the avoidance of double taxation concern the relief of double taxation on all types of income, including business income, salaries dividend income, pensions and special director’s wages and others.