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.