A Privatstiftung is an independent legal entity established by one or more individuals or legal entities for a specific purpose, with designated beneficiaries. It can be set up for any lawful personal or public aim, but is not permitted to engage in commercial activity, except … (for certain ancillary purposes.
A private foundation is a distinct legal entity created by one or more individuals or organizations for a specific purpose, with beneficiaries. It can serve any permissible private or public goal. The foundation is excluded from main commercial activity, partnership management or personal liability. Its structure provides reliable management and asset protection.
The owner or founder transfers assets to a trustee. The trustee ensures the assets serve the following aims:
The charter (Stiftungserklärung) sets the foundation’s basic regulations. Registration is made on its basis. The founder can remain unnamed. Additional rules may appear in private instructions, which do not have to be disclosed or registered.
The foundation’s structure includes:
Board members may not be beneficiaries or close relatives. The founder has authority to replace the board and amend the charter. An annual audited financial report is required.
The minimum capital is 70,000 euros.
Stages of foundation creation:
The gratuitous transfer of assets to a private foundation is subject to a foundation entry tax of 2.5%. When acquiring real estate, real estate transfer tax is generally 3.5% of the assessment basis, and an additional land register registration fee of 1.1% of the fair market value is payable.
Foundation income is subject to 23% corporate tax, beneficiary distributions to 27.5% capital gains tax.
In Austria, a foundation entry tax (Stiftungseingangssteuer) of 2.5% of the market value applies to gratuitous transfers of assets into a private foundation (Privatstiftung); as of January 1, 2026, this rate will increase to 3.5%. For real estate transfers, a special foundation entry tax equivalent (“Stiftungseingangssteueräquivalent”—an increased real estate transfer tax) is applied, which will also rise from 2.5% to 3.5% in 2026; as a result, the total tax burden for transferring real estate to a foundation can reach up to 7%.
From 2026, the ongoing tax burden will also increase: the so-called interim tax (Zwischensteuer), which applies to certain types of current income of the foundation, will rise from 23% to 27.5%.
Distributions to beneficiaries of the foundation remain subject to a capital gains tax at a rate of 27.5%.
Overall, the total tax burden on creating or funding a foundation will rise significantly from 2026, which is important to consider when planning asset structures.
Exempt from tax are:
The foundation must be liquidated if:
