Estonian Company Run from Austria: Tax Residence

Many Austrian entrepreneurs form or buy an Estonian private limited company (OÜ), often as e-residents, and run it from Austria. That works, but Austrian corporate tax law does not look only at where a company is registered: a company whose management is in Austria is fully liable to Austrian corporate tax. Austria's controlled foreign company rule, on the other hand, is written for Austrian companies that control a foreign one. The tax treaty between Estonia and Austria has its own rule for a company both countries count as resident. This guide sets out these rules with the official texts, and what we do on the Estonian side.

The guide is general information, not tax advice. How your company and you are taxed depends on the facts of your case; ask an Austrian tax adviser (Steuerberater) before you form or buy the company. The Austrian Corporate Income Tax Act 1988 (Körperschaftsteuergesetz) and the Federal Fiscal Code (Bundesabgabenordnung) were read in their consolidated versions in the federal legal information system RIS, and the treaty in its Estonian text in Riigi Teataja, on 21 October 2026; the English wording below is our translation.

In Estonia: an Estonian company is Estonian

A company established under Estonian law is resident in Estonia for tax purposes (Income Tax Act § 6). Its profit is taxed when it is distributed, not while it stays in the company — the guide how Estonia taxes company profit explains the rule. The company keeps its Estonian duties wherever its owners live: accounts, an annual report to the commercial register and, if its address is abroad, a contact person in Estonia.

In Austria: seat or management

Full liability. Companies that have their management (Geschäftsleitung) or their seat in Austria are fully liable to Austrian corporate tax; the liability covers all their Austrian and foreign income (Körperschaftsteuergesetz 1988, § 1(2)). Foreign entities comparable to Austrian private-law legal persons are included (§ 1(2) no. 1).
Where management is. The place of management is the place where the centre of the company's top-level business management lies (Bundesabgabenordnung, § 27(2)).
Without management or seat in Austria, a company is only limited liable in Austria, for the income the act lists in its § 21(1) (Körperschaftsteuergesetz 1988, § 1(3) no. 1).

In Austria: the controlled foreign company rule

For an Austrian company as owner. The rule adds the passive income of a low-taxed foreign company to the income of the controlling company — a company fully or limited liable to Austrian corporate tax that holds, alone or with associated enterprises, directly or indirectly more than 50 percent of the voting rights or the capital, or is entitled to more than 50 percent of the profits (Körperschaftsteuergesetz 1988, § 10a(1) and (4) no. 2). The text names a company as the controlling owner; an Austrian resident individual who owns the Estonian company is not named.
When it applies. The foreign company is low-taxed when its actual tax burden abroad is less than 15 percent (§ 10a(3)), and the addition applies when its passive income — interest, licence fees, dividends and similar income listed in the act — is more than one third of all its income (§ 10a(2) and (4) no. 1).

An Estonian company pays corporate income tax only when it distributes profit, so in a year in which it keeps its profit its tax burden can be below the 15 percent threshold. Whether the rule reaches you depends on who owns the Estonian company — you yourself or an Austrian company of yours — and on the share of passive income; your Austrian tax adviser answers that with your figures.

What the Estonia–Austria tax treaty says

Resident in both countries. If a person other than an individual is resident in both states, the competent authorities decide by agreement how the treaty applies to it; if they do not agree, the person is not treated as resident of either state and gets none of the treaty's benefits (agreement signed in Tallinn on 5 April 2001, article 4(3)).
Permanent establishment. A permanent establishment is a fixed place through which the enterprise's business is wholly or partly carried on; it includes especially a place of management, a branch and an office (article 5(1) and (2)). The profit attributable to it may be taxed in the state where it is (article 7(1)).
Director's fees. Fees an Austrian resident receives as a member of the management or supervisory board or another body of an Estonian company may be taxed in Estonia (article 16) — see board member fee or dividend from abroad.
Dividends. Dividends paid by an Estonian company to an Austrian resident may be taxed in Austria; if Estonia also taxes them at source, the treaty limits that tax to 5 percent of the gross amount for a company holding directly at least 25 percent of the capital and 15 percent in other cases (article 10(1) and (2)).

So, as with the United Kingdom and Turkey, the treaty does not settle a double residence by itself: a company whose top-level management is in Austria may need an agreement between the two tax administrations before it can rely on the treaty. The multilateral convention on tax treaty measures (MLI) can change the rules of tax treaties; how it applies to your company is a question for your Austrian tax adviser — we do not give that ruling.

What to decide before you form or buy the company

Where the top-level management really is. Where the decisions that direct the company are in fact taken is the fact the Austrian law looks at.
Who owns it. The controlled foreign company rule speaks of an Austrian company as owner; owning the OÜ through an Austrian company changes the analysis.
Where the work is done. An office or other fixed place of business in Austria can be a permanent establishment.

What we do on the Estonian side

online formation for an e-resident — €950 Registered address and contact person service for one year are included., or formation by power of attorney — €1,250;
a ready-made company bought remotely — €1,200 Registered address and contact person service for one year are included.;
accounting — from €150 / month and the annual report — from €450;
the registered address and contact person after the first 12 months — €350 / year.

Our accounting covers the Estonian company's Estonian obligations. Austrian tax returns and Austrian tax advice are not included. Owners in other countries: Estonian company run from abroad compares the rules side by side.

Prices exclude VAT. All communication takes place by email.

Ready to start? A new Estonian company — online for e-residents or by power of attorney; Austrian tax advice is not included. Order.

Official sources

The laws this article names, by the name of their official text, as read on 9 October 2026. For the Estonian acts we read the English translation in Riigi Teataja; the legally binding text is the Estonian one.

Income Tax Act — Riigi Teataja, English translation

Sources are named in the text, without links. To see which of our services your company needs, open the Business Navigator.

Frequently asked questions

Is my Estonian company taxed in Austria if I run it from Austria?

It can be. A company whose management or seat is in Austria is fully liable to Austrian corporate tax on all its income (Körperschaftsteuergesetz 1988, § 1(2)); the place of management is where the centre of its top-level business management lies (Bundesabgabenordnung, § 27(2)). In Estonia the company stays resident because it was established under Estonian law (Income Tax Act § 6). Under the Estonia–Austria tax treaty the competent authorities decide such a double residence by agreement; without an agreement the company gets none of the treaty's benefits (article 4(3)). Austria's controlled foreign company rule names an Austrian company as the controlling owner (§ 10a). Ask an Austrian tax adviser before you form or buy the company; we handle the Estonian side.

Estonian company run from Austria: where it is taxed