Capital Gains Tax (KESt)

What KESt covers

Capital gains tax (KESt, Kapitalertragsteuer) is the Austrian tax on income from financial assets. Since the 2022 reform a uniform rate of 27.5% applies to dividends, realised capital gains from securities and — a major change — cryptocurrencies as well. Interest on savings and current accounts is taxed at a lower 25%.

Where the custodian is domestic — Erste Bank, Raiffeisen or Bitpanda, for example — KESt is withheld at source and remitted directly to the tax office. The withholding is in principle final for the investor ("Abgeltungswirkung"), so KESt income does not have to be entered in the annual tax return, although a voluntary assessment can sometimes be worthwhile.

What is taxed — and what is not

Taxable items include:

• Dividends from Austrian and foreign shares
• Bond interest
• Realised capital gains from the sale of securities (shares, ETFs, funds)
• Deemed distributions from accumulating funds
• Realised gains on cryptocurrencies (since 1 March 2022)
• Income from staking, lending or airdrops of certain crypto assets

Outside the tax net are:

• Gains on the sale of "legacy" crypto acquired before 28 February 2021 and held for more than a year
• Swaps between different cryptocurrencies (no longer a tax event since 2022)

Losses can be offset against gains within the same category. Austrian custodian banks run that loss offset automatically across all accounts held with the same institution.

A worked example

An investor buys shares for €5,000 in January 2024 and sells them for €7,500 in November 2026. The gain is €2,500. KESt at 27.5% works out at €687.50. The bank credits €6,812.50 to the settlement account and remits the tax directly to the tax office.

If she also realised an €800 loss on a different share position in the same year, the taxable gain shrinks to €1,700 — and the KESt drops to €467.50.

Related concepts

Around KESt, the same vocabulary keeps coming up: KESt-VO, withholding tax, final-tax effect, loss offsetting and the cost-basis method. Crypto holders also need to know "speculation period" (Spekulationsfrist), staking and "legacy holdings" (Altbestand).

What investors often ask

Do I have to declare KESt income in my tax return? Not for Austrian custodian accounts — the source withholding settles it. For foreign accounts (a non-Austrian online bank without KESt service, for instance), the investor has to declare the income in the annual return and pay the 27.5% directly.

Does KESt apply to Trade Republic or Bitpanda? Yes. Both providers operate in Austria under a KESt withholding obligation and remit the tax directly. With Trade Republic, the withholding is triggered by the customer's Austrian tax residency.