The basic idea of foundations is to fulfil the intended purpose of the founder with anindependent capital. With the implementation of the private foundation law in Austria inthe year 1993, the intended purpose of foundations can from now on be private as well,just like in Switzerland and Liechtenstein. Today there are more than 3.300 privatefoundations in Austria. In addition to private foundations there are also foundationsaccording to the ?Bundes ? Stiftungs und Fondsgesetz? and the individual federal statelaws.Private foundations need a declaration consisting of an obligatory certificate and anoptional additional certificate. The declaration regulates the basic characteristics of thefoundation in order to fulfil the intended purpose. The organisation of the privatefoundation is provided by an executive board consisting of at least three people, anauditor and if necessary a supervisory board.The gentle taxation of private foundation is often criticised. The taxation can beclassified into three levels. The level of the ?entry taxation? in the amount of 2,5 %, thelevel oft the ?continuous taxation? and the level of the ?taxation of benefits?. Theincome of a foundation is taxed with 25 % corporate tax. But there is the privilege ofthe half corporate tax in the amount of 12,5 % for certain capital income according to§13 Abs 3 KStG. The half corporate tax can be credited to the benefits. The benefits arefinal taxed with 25 % capital yields tax.The main aim of this thesis is to provide an overview of private foundations in Austriaespecially of the three taxation levels. The main focus lies on the privilege of the halfcorporate taxation of certain capital income, which is said to be the only advantage, ofprivate foundations in Austria nowadays.