Enhanced Investment Tax Deduction (IFB) in Austria from November 2025 until End of 2026
Austria is strengthening its economy with an enhanced Investment Tax Deduction (Investitionsfreibetrag - IFB). Starting November 2025, businesses can claim significantly higher tax deductions for qualifying investments in depreciable assets, with special incentives for digitalization and ecological initiatives.
Given the complexity and continuous changes in tax law, always consult with a qualified tax advisor for tailored guidance and to ensure tax compliance.
What Is the Investment Tax Deduction?
Core Concept
The IFB represents an additional tax-deductible business expense that reduces taxable profit. Unlike tax-free subsidies, it doesn't reduce the depreciation basis, meaning no accounting entry is required in financial statements.
The benefit comes from tax savings based on the additional IFB business expense, with savings dependent on the applicable tax rate.
Enhanced Rates
From November 2025, businesses can claim 20% (previously 10%) of qualifying investment costs, or 22% (previously 15%) for ecological investments.
Maximum eligible investment costs remain capped at EUR 1 million per business per fiscal year, enabling additional deductions up to EUR 200,000 or EUR 220,000.
Qualifying Investments
Eligible Assets
Depreciable fixed assets that are unused, have a useful life of at least 4 years, and are allocated to domestic operations or establishments.
Ecological Investments
Investments in digitalization, ecological initiatives, and health/life sciences qualify for the enhanced 22% rate, as defined in the BMF ordinance.
Special Cases
Fully electric vehicles, heat pumps, biomass boilers, photovoltaic systems, and certain intangible assets in qualifying sectors are IFB-eligible.
Non-Qualifying Investments
Asset Restrictions
- Non-depreciable assets (e.g., land)
- Assets with less than 4-year useful life
- Used equipment
- Buildings (with specific exceptions)
- Goodwill
- Low-value assets immediately expensed
Vehicle Exclusions
- Cars and station wagons with CO2 emissions above 0 g/km
- All non-fully electric passenger vehicles
- Vehicles primarily used outside EU/EEA
Fossil Fuel Assets
- Equipment for extraction, transport, or storage of fossil fuels
- Assets directly using fossil fuels (e.g., tractors, trucks)
- Criteria defined in BMF Fossil Energy Assets Ordinance
Who Can Claim the IFB?
Sole Proprietors
Individual entrepreneurs generating taxable business income through balance sheet accounting or complete income-expenditure accounting can claim the IFB.
Partnerships
Business partnerships with taxable income qualify for the IFB, with the EUR 1 million cap applying per partnership entity.
Corporations
Companies like GmbHs generating business income can utilize the IFB. Asset management corporations also qualify based on their legal form.
Important: Flat-rate taxation methods exclude IFB eligibility. Proper profit determination through balance sheet or complete income-expenditure accounting is required.
Timing and Strategic Planning
When to Claim
The IFB is available only in the year of acquisition or production of the qualifying asset. The enhanced rates apply to acquisitions/productions after October 31, 2025.
Multi-Year Projects
For acquisition and production processes spanning multiple fiscal years, businesses can optionally claim the IFB on activated partial acquisition/production costs. This flexibility is valuable when investment costs exceed EUR 1 million.
Strategic Advantage
If partial costs were incurred before November 1, 2025, but the acquisition/production completes after October 31, 2025, the IFB can be claimed at completion for all costs—potentially at the enhanced rate for costs incurred from November 1, 2025 onward.
20%
Standard Rate
For qualifying investments from November 2025
22%
Ecological Rate
For green and digital investments
1M
Annual Cap
Maximum eligible investment per fiscal year
Combining with Other Benefits
1
Permitted Combinations
IFB can be combined with degressive depreciation, R&D tax credit and public grants (though subsidies typically reduce acquisition costs).
2
Restrictions
Cannot simultaneously claim IFB and investment-related profit allowance (GFB) for the same asset. Flat-rate taxation excludes IFB eligibility.
3
Strategic Choice
Natural persons and partnerships must choose between IFB and GFB based on individual circumstances, profit levels, and investment types.
IFB vs. Profit Allowance: Key Differences
For corporations: IFB is always beneficial. For individuals/partnerships: Choice depends on profit levels, investment types, and overall tax strategy. Given the complexity and continuous changes in tax law, always consult with a qualified tax advisor for tailored guidance and to ensure tax compliance.
Recapture Requirements
Triggering Events
IFB must be recaptured if the qualifying asset is removed from business assets or transferred abroad within 4 years (calculated daily), unless due to force majeure or government intervention.
Business Transfers
No recapture occurs when a (partial) business including IFB assets is transferred to other persons, whether for consideration or gratuitously.
Recapture Method
Recapture occurs through profit-increasing adjustment in the year of removal/transfer. No additional surcharge for interest effects is legally required.
Note: Given the complexity and continuous changes in tax law, always consult with a qualified tax advisor for tailored guidance and to ensure tax compliance.
Strategic Recommendations
For Corporations
Always claim the enhanced IFB—it's beneficial in every scenario. Plan investments across multiple fiscal years to maximize the EUR 1 million annual cap.
For Individuals & Partnerships
No universal advantage of IFB over investment-related GFB exists. Conduct profit forecasting and consider combining IFB with GFB for different asset types (e.g., IFB for equipment, GFB for securities).
Timing Considerations
Consider delaying qualifying investments until November 2025 to benefit from enhanced rates. The IFB is another factor in legal form selection and potential restructuring decisions.
Professional Advice
Given the complexity and continuous changes in tax law, always consult with a qualified tax advisor for tailored guidance and to ensure compliance.
The optimal investment timing and applicable incentives depend on legal form, investment type, profit situation, and other planned investments. Non-tax factors like liquidity must also be considered. These complex tax matters should be discussed with a qualified tax advisor for personalized advice and optimal implementation to maximize benefits.
IFB Implementation and Next Steps
The Investment Tax Deduction (IFB) offers companies a valuable incentive for qualifying investments. Effective implementation requires understanding its framework and strategic planning to maximize benefits.
Compliance
Adherence to IFB regulations and specific criteria for eligible investments ensures successful claims.
Strategic Planning
Maximize investment capacity by planning across multiple fiscal years to fully utilize the annual EUR 1 million cap.
Documentation
Maintain structured records as the foundation for accurate IFB applications and streamlined tax audits.
For optimal benefit, consider the timing of your investments. Delaying qualifying investments could allow you to benefit from potentially enhanced rates. Given the complexities, combining IFB with other incentives like GFB for different asset types (e.g., IFB for equipment, GFB for securities) should be explored.
Looking for additional funding opportunities? The seminar "Förderungen - finden, ansuchen, abwickeln" (23.10.2025 - 24.10.2025) offers comprehensive insights.