What is Austrian exit taxation?

Exit taxation under § 27 (6) of the Austrian Income Tax Act treats an individual's departure as if they had sold their taxable capital assets on the day of departure. The difference between acquisition cost and market value on that date is taxed, generally at the special rate of 27.5 %. No actual sale takes place. The tax arises regardless.

Can the exit tax be deferred when moving to Dubai?

Non-assessment, available when moving to an EU or EEA state, does not apply to third countries, and the UAE is a third country. What remains is payment in five equal annual instalments under § 27 (6) no. 1 lit. b. The tax is therefore not avoided, only spread over five years.

What changed on 1 July 2026?

The Austrian Budget Accompanying Act 2026 introduced new reporting and proof obligations. For instalment arrangements granted after 30 June 2026 involving a gain above EUR 100,000, the taxpayer must prove annually that the shares have not been sold and no other triggering event has occurred. Failure to provide that proof on time is itself treated as a triggering event, making the deferred tax immediately payable. Cases granted before 1 July 2026 fall under a one-off transition report due by 31 December 2026.

Insights

Austrian Exit Tax 2026: What Moving to Dubai Triggers

An Austrian resident holding shares in corporations who moves to the UAE triggers a deemed disposal under § 27 (6) EStG: unrealised gains are taxed at 27.5 %. Moving to a third country such as the UAE rules out deferral by non-assessment, leaving instalments at best, and since 1 July 2026 an annual proof obligation on top.

Last updated: July 27, 2026

What departure triggers

Austrian exit taxation under § 27 (6) EStG creates a deemed sale: when an individual moves their residence abroad, privately held taxable capital assets (shares in an Austrian GmbH, listed shares, fund units) are treated as disposed of on the day of departure. Taxed is the difference between acquisition cost and market value on that date, generally at the special rate of 27.5 %.

The economic consequence is what matters: no money changes hands. A founder holding an operating company with substantial intrinsic value pays tax on a gain never realised. The liquidity has to come from somewhere else: a point that regularly surfaces too late in the planning.

The UAE is a third country, and that changes everything

When moving to an EU or EEA state, non-assessment can be applied for: the tax is calculated but only falls due on an actual disposal. That route is closed for third countries, and the United Arab Emirates are a third country.

What remains is payment in five equal annual instalments under § 27 (6) no. 1 lit. b. The liability therefore arises in full in the year of departure and is merely spread across five years. Selling the shares in the meantime, or moving on to another country, can accelerate the outstanding instalments.

New since 1 July 2026: an annual proof obligation

With the Budget Accompanying Act 2026 the Austrian legislator tightened the rules. For instalment arrangements granted after 30 June 2026 involving a gain above EUR 100,000, a recurring annual proof obligation applies: the taxpayer must document that the shares are still held and that no triggering event has occurred.

Deadline 31 December 2026 for existing cases

Instalment arrangements and non-assessments granted before 1 July 2026 fall under a one-off transition rule: affected legacy cases must be identified and reported by 31 December 2026. Anyone who left Austria years ago and still carries an open exit tax position is caught by this, even where nothing has happened since.

The sanction is severe: if the proof is missing or late, that omission is itself treated as a triggering event. The deferred tax then becomes payable in full and immediately, without a single share having been sold.

The treaty with the UAE, and why it may change

Unlike Germany, which let its UAE treaty lapse at the end of 2021, Austria has maintained an active double taxation treaty with the United Arab Emirates since 2003. The starting position for Austrian founders is therefore considerably better than for German ones.

That position is in motion. Austria has negotiated an amendment with the UAE. The central point: a switch from the exemption method to the credit method for Austrian residents, plus a 10 % withholding right on dividends. The date of entry into force is open. Anyone building a structure on the exemption method should know that the foundation is up for revision.

Why the sequence decides the tax bill

Exit tax is measured by the market value of the shares on the day of departure. One practical consequence follows that is easily overlooked: the timing of departure relative to the build-up of value determines the tax base. Leaving before an expected step up in value produces a different calculation than leaving after it.

Equally relevant is whether the Austrian company should continue to exist at all, and how it relates to the new UAE structure. These decisions are interlocked for tax purposes and are hard to correct afterwards. Firstgate handles the UAE side and coordinates it with your Austrian tax adviser: both belong at the same table before the residence changes.

Status and scope

This article reflects the position as of July 2026 and does not replace an assessment of your specific case. Exit taxation is Austrian law and belongs with your Austrian tax adviser; Firstgate is responsible for the UAE side (structure, licence, substance and ongoing compliance) and works to support that assessment.

Frequently asked questions

What is Austrian exit taxation?: Exit taxation under § 27 (6) of the Austrian Income Tax Act treats an individual's departure as if they had sold their taxable capital assets on the day of departure. The difference between acquisition cost and market value on that date is taxed, generally at the special rate of 27.5 %. No actual sale takes place. The tax arises regardless.
Can the exit tax be deferred when moving to Dubai?: Non-assessment, available when moving to an EU or EEA state, does not apply to third countries, and the UAE is a third country. What remains is payment in five equal annual instalments under § 27 (6) no. 1 lit. b. The tax is therefore not avoided, only spread over five years.
What changed on 1 July 2026?: The Austrian Budget Accompanying Act 2026 introduced new reporting and proof obligations. For instalment arrangements granted after 30 June 2026 involving a gain above EUR 100,000, the taxpayer must prove annually that the shares have not been sold and no other triggering event has occurred. Failure to provide that proof on time is itself treated as a triggering event, making the deferred tax immediately payable. Cases granted before 1 July 2026 fall under a one-off transition report due by 31 December 2026.
Is there a double taxation treaty between Austria and the UAE?: Yes. Austria has maintained a treaty with the United Arab Emirates since 2003 and, unlike Germany, did not let it lapse. A negotiated amendment provides for a switch from the exemption method to the credit method and a 10 % withholding right on dividends. The date of entry into force is currently open, which makes any plan built on the exemption method materially exposed.