Knowledge
23 Minute
I think it makes sense to consider the tax options of different countries together. A German GmbH also offers scope for design. Austria has its own rules, as do other countries. If you are only looking for the lowest tax rate, you can easily overlook which reliefs are already possible in the existing company.
However, tax advantages of different countries cannot be put together like individual offers. Each rule belongs to a specific activity, company and legal system. Tax deduction, research funding and taxation of profits have different effects. Whether a combination is economically convincing only shows the complete invoice including ongoing costs and a later private distribution.
My starting point remains: permissible possibilities should be examined. The number of countries involved is not a quality feature for me.
What Actually Comes Back at a Refund
The word refund sounds like an advantage at first. For a decision, I need a more precise answer: what amount was paid before, why is it coming back, and to whom is it due?
A GmbH can deduct input tax from operating benefits in accordance with the requirements of the German VAT Act. In the case of an ordinary incoming invoice, this includes in particular the service performed for the company and a proper invoice. Certain tax-free sales exclude the deduction. If the deductible input tax exceeds the VAT due, a refund amount may result. This is not a lump-sum subsidy for all purchases and a reduction in corporate tax. The basis is in Sections 15, 16 and 18 Sales Tax Act.
For my comparative calculation, the sales tax therefore receives its own column. Repayment can improve liquidity. This does not result in an additional profit of the same amount. The payment date is also part of the planning: An expected claim does not pay a bill today.
Germany and Austria: Concrete comparison of differences
Tax deduction is not an exclusive privilege of a German GmbH. Australia also knows him. The differences in the specific output become interesting.
In Austria, ordinary passenger cars are generally subject to considerable exclusions from the VAT deduction, including for running costs. There are exceptions, including for certain uses and vehicles without CO2 emissions; other limits may be relevant. The Austrian Ministry of Finance explains these Exemptions from deduction. The statement “The company gets the sales tax back” is therefore not sufficient for a vehicle comparison.
A second example is research. Austria provides for a research premium of 14 percent for beneficiary research expenditure. In the case of in-house research, an annual report from the Research Promotion Agency is generally required; the research must be carried out in an Austrian company or establishment there. The conditions and the procedure describe the state Company service portal for the research award.
Germany has with it Research allowance It also has its own instrument. An Austrian advantage therefore does not prove that comparable funding in Germany would be impossible. Comparison shall be made between eligible activities, expenses, supporting documents, deadlines and treatment of other support. Mere establishment does not yet create eligible research.
What advantages from abroad are really combinable
I would first assign any desired discharge to an actual function: development, production, distribution or participation. Only then can it be checked which country is economically and technically suitable for this. For Hungary, Switzerland or another location, a specific national rule must be on the table. A general claim about “better taxes abroad” is not a reliable comparison position.
For German reference, the actual place of management also counts. After Section 1 Corporate Tax Act A place of management in Germany can already trigger unlimited corporate tax liability. Section 10 Tax Code focuses on the business overhead line. The foreign register address alone does not answer this question.
Services between affiliated companies also require a professional examination. Section 1 External Tax Act contains rules for the correction of income in cross-border business relationships, the conditions of which differ from the arm’s length comparison. Profits can therefore not be assigned to the desired country by arbitrary internal invoices. Depending on the participation and income, the CFC taxation to be checked.
This limits certain combinations. It does not replace the open comparison of permitted alternatives.
My comparative calculation before an additional company
I would put three variants side by side: the current state, an improvement within the existing GmbH and an actually implementable international structure. All three are given the same assumptions about turnover, investment, personnel and time period.
- Assignment of claim: Which company receives which discharge? What activity and what evidence do they justify? A still unexplained promotion remains recognizable as an open position.
- Separate tax types: Sales tax, profit taxes and possible levies on cross-border payments receive their own lines. The same discharge must not be duplicated.
- Date to be recorded: Immediate payment, later refund and mere postponement of a tax payment are economically different. The liquidity planning shows these dates separately.
- Apply full costs: Foundation, ongoing accounting, accounts, consulting, staff, rooms, travel and bank belong in every variant, as far as they actually occur.
- Private needs complement: Will profits remain in the company or will they be distributed? For the second variant, the tax assessment at the level of the shareholder is additionally required.
- Perform deviations: What is left if a subsidy fails, a refund is received later or the foreign company earns less than planned?
The appropriate calculation model is a multiannual comparative calculation with separate tax types and cash flows. A single percentage is not enough for this. The results must also indicate which assumptions are already technically confirmed.
The reflections on Holding structure help with the allocation of participations. Whether another company is necessary at all already belongs before the company formation.
When I would not pursue a combination
If the calculated benefit only works as long as running costs are missing, the basis is incomplete. The same applies if a company has no comprehensible task or no one can explain where the relevant decisions actually fall.
Taxation has legal limits. Section 42 Tax Code regulates the abuse of legal design possibilities. This does not result in a general ban on tax-conscious planning. Then there is the need to have the concrete design, including its economic reasons, evaluated professionally.
I am neither a lawyer nor a tax consultant. My perspective is the preparation and coordination: tasks, documents, participants and timelines must fit together. The tax and legal audit is carried out by licensed professionals in the countries concerned. The process is on the side of Method described.
My goal would be a structure whose usefulness remains after this examination. If the existing GmbH is sufficient for this, this is just as useful a result as a justified combination of several countries.
Source status and editorial status
Status of linked source verification: 9. September 2026. This contribution by Norbert Péter is an editorial draft for general orientation. The legal and official sources are directly linked to the respective statements. The instruments mentioned are examples of an audit, not a recommendation for a specific operation and not a promise of tax savings.
