Private foundation (Austria)

Austrian legal form under the Private Foundations Act for permanently dedicating assets to a purpose set by the founder.

In practice

Austrian private foundations are widely used to keep family businesses together across generations. In practice, the foundation deed and any supplementary deed define the purpose, the beneficiaries and the rights of the founder; distributions are decided by the board according to these rules. The family office keeps the deeds, board resolutions, distributions and register reports together, because banks and tax authorities regularly ask for them.

Distinctions and common mistakes

Contributions are subject to the foundation entry tax and distributions generally to capital gains tax. A common mistake is to overlook that beneficiaries also have to be reported to the register of beneficial owners and that the supplementary deed, although not public, has to be disclosed to the tax authority to avoid higher tax rates.

Related terms

WiEReG

Austrian act on the register of beneficial owners kept by the Federal Ministry of Finance.

Family foundation

A foundation whose purpose lies predominantly in the interest of one or more families.

Mentioned in these guides

• KYC for foundations: which documents are neededWhich documents the KYC review of a foundation requires: deed, by-laws, register extract, founder, foundation board, beneficiaries and source evidence.
• An advisory board for the family office: counsel from outsideWhen an advisory board helps a family office, which tasks it takes on, how it is staffed and where the limits on liability and its remit lie.
• Year-end closing across all family structuresHow a family office organises the year-end closing across holdings, foundations and private wealth: timetable, valuation, deadlines in CH, DE and AT.