The preferential tax regime

A handful of European countries actively court the internationally mobile with a special personal tax status. Italy lets new residents replace tax on all foreign income with a fixed annual substitute tax — EUR 300,000 a year for those opting in from 2026, for up to fifteen years. Switzerland offers expenditure-based (lump-sum) taxation, negotiated with the canton by reference to living costs and open only to foreign nationals who do not work there. Austria offers neither, and nothing like them: there is no remittance basis, no negotiated assessment, no flat tax on foreign income for the population at large.

Anyone who becomes Austrian tax resident is taxed on worldwide income under the ordinary Austrian tax system, with scale rates that reach 55%. What makes Austria competitive for wealthy families is not a special status but the structure of the ordinary rules themselves: no wealth tax, no inheritance or gift tax, a flat 27.5% on most capital income, and an entry step-up that keeps pre-arrival gains on financial instruments, derivatives and crypto assets out of the Austrian base. For a family whose wealth produces mainly investment income, those four features do much of the work a headline regime does elsewhere — permanently, and without an annual fee.

There is, however, one genuine inbound concession, the Zuzugsbegünstigung. It is narrow by design, and it is worth understanding both for those who qualify and for those who will be told — correctly — that they do not.

Scientists and researchers whose move promotes science or research benefit from a second, separate concession: a tax allowance of 30% of their income from scientific work, whether that work is performed in or outside Austria. The allowance runs for five years from the move and applies only to income taxed at progressive rates — income already enjoying the flat rate described above is not counted a second time. It comes with a trade-off written into the statute: where the allowance is granted, no further business expenses, income-related expenses or extraordinary burdens connected with the move may be deducted alongside it.

In effect, a relocating researcher's Austrian salary is taxed on 70 cents of every euro for the first five years, which materially lowers the average rate produced by the progressive bands. Universities and research institutions recruiting internationally routinely factor the allowance into offers; how salary, the favourably taxed 13th and 14th payments and equity fit together is covered with the other rules for employees and executives.

Entrepreneurs, executives, investors and financially independent families fall outside the concession, and no amount of structuring brings them inside it. For them, the Austrian answer is sequencing rather than status. Gains that accrued before the move never reach the Austrian base, because financial instruments, derivatives and crypto assets are stepped up to market value at entry. Once resident, portfolio income runs at the flat 27.5% rather than the 55% scale. And the taxes that erode wealth annually elsewhere — on net wealth, on inheritances, on gifts — are simply absent.

Those features reward preparation: documenting values at entry, arranging the mix of income before arrival, and reviewing companies, trusts and foundations while still a non-resident. That work is the subject of the pre-immigration planning page; families weighing a long-term holding vehicle should also read how the Austrian private foundation is taxed.