For more investment and stability: Tax deductibility of fictitious equity interest

August 26, 2020

Austria’s Finance Minister Gernot Blümel recently announced that Austria is considering introducing the tax deductibility of notional equity interest. This change might come into effect next year.

 

Such a tax deduction would allow companies to deduct a fixed notional interest rate on equity from corporate income tax. This measure aims to strengthen the equity ratio of companies. Low capital levels are often seen as a risk factor to economic stability, an issue of concern during and likely long after the height of the current economic crisis.