Document background
A Tax Allocation Agreement is essential for corporate groups operating under the Austrian group taxation regime (Gruppenbesteuerung). This document is required when two or more companies wish to form a tax group, allowing them to consolidate their tax positions and offset profits and losses within the group. The agreement must comply with §9 of the Austrian Corporate Income Tax Act (KStG) and establishes the framework for allocating tax liabilities and benefits, defining payment obligations, and setting administrative procedures. It becomes particularly important in complex corporate structures, cross-border operations, and situations involving multiple subsidiaries. The Tax Allocation Agreement should be implemented before the start of the financial year in which the tax group is to become effective and must be maintained throughout the minimum statutory period of the tax group's existence.
