Stamp Duty on Settlement Agreements in Austria

Mediation ideally concludes with a settlement between the parties. In Austria, however, that settlement may trigger stamp duty liability pursuant to § 33 item 20 of the Austrian Stamp Duty Act (Gebührengesetz, GebG). Comparable legal systems generally do not have an equivalent mechanism, and international parties unfamiliar with Austrian law are often surprised by its scope and practical effect.

In lower-value disputes, stamp duty is usually manageable and of limited significance in the overall economic assessment of the matter. As dispute values increase, however, the dynamic changes. Beyond a certain threshold, resolving a dispute out of court may, from a stamp duty perspective, become more expensive than pursuing litigation at first instance. Parties who do not factor this into their litigation risk analysis and procedural planning may overlook an issue that can become strategically relevant in higher-value negotiations or may find themselves, at the conclusion of an otherwise successful mediation, facing a substantial and unexpected stamp duty exposure.

What triggers the stamp duty?

Broadly speaking, the stamp duty arises where (i) a legal transaction expressly covered by the Austrian Stamp Duty Act, (ii) with a sufficient Austrian nexus, (iii) is concluded and (iv) recorded in documentary evidence (signed by the parties). In detail: 

• A mediation settlement agreement is treated as an out-of-court settlement as set forth in § 33 Item 20 GebG. The corresponding Guidelines expressly clarify that agreements concerning disputed concluded in the course of mediation may trigger stamp duty. This applies even where the agreement is recorded merely in note or bullet-point form (GebR 2025, Rz 1543).

• No mandatory written form: A mediation settlement may validly be concluded orally; Austrian law imposes no formal writing requirement. However, if the parties choose either (i) to put the settlement in writing, or (ii) to create a written record of a previously oral agreement, that record may be considered as "documentary evidence".

• Documentary evidence: The concept of documentary evidence extends well beyond formal contractual documentation. It may include memoranda or negotiation records (GebR 2025, Rz 1032ff), term sheets or point agreements (Punktationen) (GebR 2025, Rz 1037ff), whiteboard or flipchart records (including photographs thereof), reproducing the substance of the agreement. In other words: whether the parties intended to create documentary evidence is irrelevant for purposes of stamp duty liability (GebR 2025, Rz 1085) and may therefore be produced inadvertently and without deliberate intent. That said, a document without signatures generally does not constitute documentary evidence.

• Execution requirements: As a general rule, execution by the parties is required. Austrian law nevertheless recognises circumstances in which stamp duty liability may arise even absent formal signatures (§ 18 GebG). For example, a missing signature may effectively be substituted where one party prepares and signs a written record of the negotiations.

• Stamp duty rate: The stamp duty amounts to 2% of the aggregate value of the obligations assumed by each party. Where court proceedings are already pending, the rate is reduced to 1%. At higher dispute values, the stamp duty may exceed the court filing fees payable for first-instance proceedings under the Austrian Court Fees Act (Gerichtsgebührengesetz, TP 1 GGG), because court fees become degressive at the upper end of the scale whereas the stamp duty remains linear.

• Calculation of the aggregated value: Only obligations actually assumed are included in the assessment base; obligations waived by the parties are not. The calculation extends beyond monetary consideration: transfers of assets, services and other non-cash obligations must equally be valued and included. Valuation follows the Austrian Valuation Act (Bewertungsgesetz, BewG): monetary payments are taken at nominal value, other forms of consideration at fair market value, unless specific statutory provisions apply. Recurring obligations are capitalised under the BewG; lifetime or indefinite obligations are valued by reference to statistical life expectancy.

• Territorial nexus: The primary focus is on settlements executed in Austria. However, § 16 GebG also captures settlements executed abroad where (i) all parties qualify as Austrian residents for stamp duty purposes and (ii) the transaction has a sufficient domestic nexus. Where both parties maintain a residence or permanent establishment in Austria, an agreement executed abroad will nonetheless trigger stamp duty if at least one place of performance is situated in Austria.

• When the stamp duty liability arises: In bilateral agreements, the stamp duty liability generally arises once the document has been executed by both parties. The transaction must then be disclosed to the competent tax authority pursuant to § 31 GebG.

Other consequential effects

Substitute documentary evidence through court submissions: Even where the parties intentionally refrain from creating a formal document, or execute the agreement abroad, stamp duty exposure may subsequently arise if one party later refers to the agreement in submissions before a court or administrative authority. Such references may themselves constitute substitute documentary evidence capable of triggering the stamp duty liability (GebR, Rz 1034).

Liability for the stamp duty: Under the Austrian Stamp Duty Act, the tax authority may pursue any party to the legal transaction for payment of the stamp duty. Contractual arrangements allocating the stamp duty internally between the parties cannot be invoked against the authorities. A party that pays the stamp duty may subsequently seek recourse against the other party in accordance with the agreed allocation.

Penalty surcharge: If the stamp duty is not properly disclosed or paid, the tax authority may impose a surcharge of up to 100% of the outstanding amount (GebR, Rz 132). The level of the surcharge lies within the authority’s discretion and depends on the circumstances of the individual case, including prior conduct.

Conclusion

Questions concerning both the amount of stamp duty and the applicable assessment base should form part of the litigation risk analysis and the parties’ assessment of negotiation strategy. The same applies to the question whether stamp duty exposure can be mitigated or avoided altogether, whether through the absence of formal documentation or through alternative structures (execution abroad, remote reading procedures, lawyers’ correspondence or exchange of mirroring offers), all of which require careful legal assessment and coordination with the opposing side.

If these issues arise only at the conclusion of the mediation process, they may place considerable strain on a settlement that has otherwise already been negotiated.

The current Austrian government programme contemplates the abolition of legal transaction stamp duties. Until such reform is implemented, however, the issue remains highly relevant for mediations involving an Austrian nexus.