Mastering the COVID-19 pandemic, boosting the economy, and stabilizing public finance requires states to provide an attractive environment for investments and a competitive fiscal framework. When comparing the Austrian corporate tax rate with those of other EU and OECD member states, Austria ranks in the middle, but ranks in the top third when income and capital gains taxes are considered as well. It is therefore not surprising that some Austrian entrepreneurs search for other jurisdictions offering more attractive tax regulations for their business activities. Stefan Bendlinger analyzes both the possibilities of legal tax planning and the requirements a tax-optimized jurisdiction has to meet as well as the barriers introduced by the European Union, the OECD, and domestic tax regulations to combat profit shifting. Such rules and regulations can have the effect that a supposedly favorable business location ultimately becomes a “tax-trap" for the Austrian entrepreneur.
