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In short: In Austria most investment income is taxed at a fixed special rate of 27.5% – dividends, capital gains on shares, funds and ETFs, bond interest (publicly placed securities), derivatives and crypto. Only 25% applies to interest on bank deposits. At domestic banks the KESt is withheld automatically and is a final tax. There is no tax-free allowance (unlike Germany) and no holding-period exemption – gains are taxable regardless of how long you hold. For ETFs, the reporting-fund status is decisive, and accumulating funds are taxed annually on their deemed-distributed income even though nothing is paid out.

Capital Gains & Investment Taxation in Austria (2026)

Kontoo editorial team · Updated 06/25/2026 · 7 min read

In Austria, most investment income is taxed at a fixed special rate rather than through the progressive income-tax scale. At domestic banks this happens automatically via the Kapitalertragsteuer (KESt), a withholding tax that is usually a final tax: once withheld, the income need not be declared again. Simple enough in many cases. Where it gets interesting is ETFs and funds. As of 2026; rules can change.

Check which rate applies: 27.5% for dividends, capital gains on shares, funds and ETFs, bond interest and derivatives; 25% only for interest on bank deposits (savings, current and term accounts).
At an Austrian bank the KESt is withheld automatically and is final – you don't have to do anything further.
At a foreign broker nothing is withheld: you must self-declare the income via form E1kv in your tax return.
Before buying an ETF, check its reporting-fund status at my.oekb.at – only reporting funds (Meldefonds) get correct, lower taxation.

What matters

The system. Income from capital is, in Austria, largely captured at a fixed special rate, outside the progressive income-tax scale (which runs 0% to 55%). At domestic banks and brokers the Kapitalertragsteuer (KESt) collects this directly. It is in principle a final tax: once the bank has withheld it, the income does not have to be declared again and does not push other income into higher brackets. The two rates. 27.5% applies to dividends and profit distributions (domestic and foreign), realised gains on shares, fund and ETF units and publicly placed bonds, interest from such bonds, derivatives, and both distributions and deemed-distributed income from funds. Crypto income has also been 27.5% since 2022. The 25% rate applies only to interest on bank deposits – savings books, current and term accounts – and non-securitised claims against credit institutions. The common shorthand "bonds = 25%" is imprecise: since the 2016 reform (which raised the rate from 25% to 27.5%), publicly placed, securitised bonds sit at 27.5%. No allowance, no holding period. There is no general allowance for capital income – every euro counts from the first. And there is no holding period after which securities gains become tax-free: the former speculation period was abolished by the reform. Note, though, that the cutoff differs by instrument: shares and fund units acquired from 1 January 2011 are taxable Neubestand, whereas bonds and derivatives acquired from 1 April 2012 are Neubestand. Older holdings of those instruments are Altbestand (grandfathered) and can still be sold tax-free, but this is now largely historical. The foreign angle. At an Austrian bank, KESt is also withheld on foreign dividends; foreign withholding tax paid abroad is credited, but only up to the rate Austria must credit under the applicable double-tax treaty – typically a maximum of 15% of the dividend. Any excess must be reclaimed from the source state. At a foreign broker nothing is withheld, so self-declaration via form E1kv is mandatory. The opt-in. Anyone with very low total income can elect the Regelbesteuerungsoption and have their capital income taxed at their personal progressive rate. The option applies to all capital income at once – you cannot cherry-pick individual positions – and is worthwhile only when the personal progressive rate on the additional income stays below the applicable flat rate (25% or 27.5%). Any KESt already withheld is then credited or refunded.

ExampleSuppose you sell ETF units with a realised gain of EUR 5,000 and receive EUR 1,000 in dividends the same year. Both fall under the 27.5% rate. Tax on the gain: 5,000 × 27.5% = EUR 1,375. Tax on the dividends: 1,000 × 27.5% = EUR 275. Total: EUR 1,650 in KESt – there is no allowance, so it is taxed from the first euro. At a domestic bank this is withheld automatically, leaving you with EUR 4,350 of net profit.

As a rule, only buy reporting funds (Meldefonds) – non-reporting funds face a punitive lump-sum tax that is usually far higher. You can check the status for free at my.oekb.at. To grasp how the annual deemed taxation eats into long-term growth, model it with the compound-interest calculator.

In depth

Reporting funds vs. non-reporting funds

Austria taxes funds on a transparency principle – it looks through the fund. The status is decisive. A reporting fund (Meldefonds) has an Austrian tax representative and reports tax figures daily or annually to the Oesterreichische Kontrollbank (OeKB). Most large providers (iShares, Vanguard, Xtrackers, Amundi) offer reporting share classes; you can verify the status at my.oekb.at. Only reporting funds get correct, lower taxation. A non-reporting fund faces a punitive lump-sum tax: deemed annual income equals 90% of the year's increase in unit value, with a floor of 10% of the year-end value, taxed at 27.5%. This is usually very disadvantageous – hence the universal advice to buy only reporting funds.

Distributing vs. accumulating

With distributing funds, the actual payouts are taxed at 27.5% as received (plus any deemed-distributed component). With accumulating funds nothing is paid out – yet Austria taxes the ausschüttungsgleiche Erträge (agE, deemed-distributed income) annually. The agE covers the fund's ordinary income (dividends, interest) plus a portion of gains realised inside the fund; 27.5% is levied at the fund's fiscal year-end. For domestically held reporting funds the bank withholds this automatically. Crucially, the already-taxed agE raises the unit's tax cost base and is credited at final sale – avoiding double taxation. So accumulating ETFs do not achieve full tax deferral in Austria.

Loss offsetting and wrappers

Austrian banks automatically net realised gains and losses within the same institution over the calendar year (Verlustausgleich). Limits: losses on securities/derivatives cannot be offset against deposit interest (the 25% category), private capital losses cannot be offset against other income types and generally cannot be carried forward. Cross-bank offsetting must be claimed via the tax return. There is no broad tax-sheltered brokerage wrapper comparable to a UK ISA or US IRA. The main long-term incentive is the state-subsidised prämienbegünstigte Zukunftsvorsorge and certain unit-linked life-insurance products with a sufficiently long term – niche, conditional products, not a general equity wrapper.

Checklist

Standard special rate (KESt): 27.5% on dividends, securities/fund gains, bond interest, derivatives, crypto
Reduced 25% rate only on interest from bank deposits and non-securitised claims
No general allowance (EUR 0) and no holding-period exemption – gains taxable regardless of holding time
Foreign withholding-tax credit capped at 15% of the dividend

Common myths

Myth: "If I hold my shares long enough, the gains become tax-free."

Reality: That used to be true. The speculation period was abolished for securities acquired from 2011. Today gains are taxable at 27.5% regardless of holding period. A new holding-period exemption was only a political proposal in 2026, not in force.

Myth: "Accumulating ETFs let me defer all tax until I sell."

Reality: Not in Austria. The deemed-distributed income (dividends, interest plus part of the fund's realised gains) is taxed at 27.5% annually, even with no payout. Only unrealised price gains inside the fund stay deferred until you sell.

Sources

Frequently asked questions

Is there a savings allowance in Austria like in Germany?

No. Unlike Germany's Sparer-Pauschbetrag, Austria has no general tax-free allowance for capital income – every euro is taxed from the first euro. One exception outside ordinary investing: employee share schemes are tax-free up to EUR 3,000 per year.

Do ETF gains become tax-free after a certain holding period?

No. The former one-year speculation period was abolished for securities acquired from 2011 onward. Gains are taxable at 27.5% regardless of holding period. A re-introduced holding-period exemption was, as of mid-2026, only a political proposal and not in force.

Do I have to declare income myself if I use a foreign broker?

Yes. A foreign broker does not withhold Austrian KESt. You must self-declare the income via form E1kv in your tax return; it is then taxed in isolation at 27.5% (or 25% for deposit interest), with no progression effect on your other income.

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