Deemed Distributions: What They Are and How to Report Them

An accumulating ETF automatically reinvests its income — dividends from the underlying equities, interest from bonds — back into the fund. You receive no cash payout, but the value of your units increases.

Under Austrian law, these internally reinvested earnings are nevertheless taxable in the year they arise within the fund. They are called ausschüttungsgleiche Erträge (deemed distributions). The tax rate is 27.5% KeSt — the same as on actual distributions.

In practice: you pay tax every year on income you have never seen in your account.

Not all ETFs provide the necessary tax data. A reporting fund (Meldefonds) is a fund that reports its taxable income annually to the ÖEKB (Österreichische Kontrollbank). This data is published on the portal my.oekb.at for every registered fund.

The vast majority of large ETFs — MSCI World (IWDA), FTSE All-World (VWCE), S&P 500 (CSPX) — are reporting funds. You can verify any fund by searching its ISIN on my.oekb.at.

If a fund is not a reporting fund, the taxable income defaults to 90% of the price appreciation — typically much less favourable. Austrian investors should avoid non-reporting funds.

The ÖEKB publishes a per-unit amount in euros (or fund currency) for each reporting fund. To calculate your own tax you need:

1. The ÖEKB per-unit amount for the relevant tax year (search by ISIN on my.oekb.at)
2. The number of units you held on the ÖEKB reference date (not at year-end — each fund has its own date)
3. The ECB exchange rate on that reference date, if the fund is denominated in USD or GBP

Formula: Deemed distribution = ÖEKB amount per unit × number of units × exchange rate

The result goes into field KZ 937 (foreign custody account) or KZ 936 (Austrian custody account) of the E1kv. 27.5% KeSt is applied to this amount. Source: BMF E1kv 2024.

Each fund has a different reference date. For each ETF you need the correct ECB exchange rate on a different day. The ÖEKB data must be downloaded and processed manually. Investors who hold multiple ETFs across several accounts can easily spend a few hours on this alone.

Tax-simple brokers (e.g. Austrian banks) handle this automatically. With Interactive Brokers, Scalable Capital, or Bitpanda the responsibility falls entirely on you.

Distributing ETFs pay income directly to investors. Those payouts are immediately taxable (field KZ 985 of the E1kv) and appear in the broker report. Deemed distributions can still arise alongside distributions — a portion of the fund's income is reported annually through the ÖEKB even when some income is paid out.