Austria 2025 – Corporate Investment in Austria. Stylised Facts, Impacts, Determinants and Investment Policies

This study provides an overview of the structure and development of investments in equipment and intangible assets in Austria as well as in the EU countries. In addition, investment climate factors and the main investment determinants (corporation tax, depreciation regulation, investment grants) are taken into account. A comprehensive empirical analysis of the effects and determinants of equipment investments in the enterprise sector is carried out. In the EU countries, the most common tax measures are the reduction of corporate taxes, followed by the expansion of tax incentives for R&D activities. Accelerated depreciation regimes and tax credits for investments are less frequently used. The results show that the total contribution of fixed assets to value added in constant prices amounts to 0.5 percentage point per year between 2010 and 2014. Of the different types of capital, intangible assets have the highest growth contribution (0.3 percentage point per year on average). For the group of highly developed industrialised countries, corporate taxation has a significantly negative impact on capital growth. The introduction of the patent/IP box is associated with an increase in domestic investment in intangible assets (for example in Belgium) or with a rise in domestic direct investment in R&D, design and technical services (e.g. in the Netherlands). Based on the results, a strategy to increase equipment investment is presented.