Slovak Company, Austrian Project
What You Need to Know About Permanent Establishments and Your Employees Activities

1. More than just an international assignment

Many entrepreneurs from Slovakia see Austria as an attractive market for new projects. Larger contracts, a more advanced market, and the prospect of higher profits are often enticing. However, cross-border activities quickly raise questions that should not be underestimated: When does a permanent establishment arise? What obligations exist towards Austrian authorities? And what about wage dumping laws for posted employees?

Especially for Slovak companies, it is essential to address these issues in advance to avoid penalties and additional costs. Taking a closer look at the applicable regulations can help make your project a success.

2. Permanent establishment: When it arises and what it means

A permanent establishment is, simply put, a fixed place where a company partially or fully carries out its business activities. In Austria, even something as simple as a construction site container or a rented office can qualify as a permanent establishment if certain criteria are met.

For Slovak companies occasionally accepting contracts in Austria, the question is where the line is between temporary activity and a tax-relevant permanent establishment.

What to keep in mind:

• Duration of activity: The length of time your employees work in Austria often matters. After a certain project duration, authorities may automatically assume a permanent establishment.
  
  Our tip: Compare your project timeline with legal requirements to avoid unpleasant surprises.


• Type of service: Is it purely an assembly job, a consulting service, or the setup of a permanent location? Different types of projects can lead to different outcomes regarding permanent establishment status.
  
  Our tip: Keep detailed records of the type and scope of the project to clarify any questions from tax authorities.

3. Reporting obligations and administrative requirements

As soon as a permanent establishment is created, or employees are working in Austria, extensive reporting and documentation obligations may apply. These include registering with the Austrian tax office, paying VAT, and — depending on the duration of the activity — observing specific retention periods for business records.
Companies should also check whether additional permits are required, for example, if the Slovak business needs to be officially registered in Austria. Ignoring these steps can quickly lead to administrative fines.

What to keep in mind:

• Tax registration: Depending on how your projects are structured, you may need to register with the Austrian tax office (for example, for VAT purposes).
  
  Our tip: Check early if you need your own tax number in Austria, and keep all records handy in case of audits.


• Trade licence: For certain services or activities, you may need an Austrian business licence. Responsibility varies by industry and location.
  
  Our tip: Compare Slovak and Austrian regulations early to avoid unexpected licensing hurdles.

4. Posting employees: Duties and pitfalls

When Slovak employees are posted to Austria, several regulations apply, primarily aimed at protecting the workforce. A key element is the so-called "Anti-Wage Dumping Act," which requires that workers in Austria are paid at least the Austrian minimum wage. Additionally, reporting obligations must be met.
For employers, it is crucial to prepare correct payslips and document agreed working hours. Mistakes here can result in severe penalties.

What to keep in mind:

5. When professional advice is worthwhile

Questions about permanent establishments, tax and social insurance reporting obligations, and labour law requirements are already complex for many businesses — and with the added challenge of an international project, they become even more demanding. It is strongly recommended to seek expert advice during the project planning phase from specialists familiar with Austrian regulations.

Especially for assignments that go beyond short-term assembly work, misjudging permanent establishment status can lead to significant additional costs. The same applies if workers in Austria are paid under poor conditions, triggering the Anti-Wage Dumping Act. Failing to meet reporting obligations before work begins or missing necessary documents can result in very high fines. An early consultation is often well worth it and can protect your business from unnecessary costs.

(This article does not replace legal or tax advice. For specific questions and individual support, please feel free to contact us.)