Austria-Hungary, which included the complete territories of today's Austria, Hungary, the Czech Republic, Slovakia, Slovenia, Croatia, Bosnia and Herzegovina (from 1878 to 1908 onward), and parts of Poland, Ukraine, Romania, and Italy, was a monarchical union of otherwise separate lands at the beginning of the nineteenth century, and it was a dual monarchy consisting of two constitutional countries (in short, Austria and Hungary) and a common land (Bosnia and Herzegovina) at the eve of the First World War. In 1910, Austria had about 29 million inhabitants; Hungary, 21 million; and Bosnia and Herzegovina, 2 million. Up to 1867, the then so-called Austrian Empire (Kaisertum Österreich) passed through a process of centralization and unification opposed by regional forces that worked toward autonomy or independence, notably in the Italian provinces and Hungary, and led to fundamental changes in territory and constitution in the 1860s. Throughout the period, conflicts between the dominating ethnicities (Germans and Hungarians) and other nationalities remained a disintegrating force, which eventually led to the end of Austria-Hungary.
The territorial and constitutional changes of the 1860s were most important for the fiscal history of Austria. In 1860 and 1866, respectively, following the Italian war of 1859 and the Austro-Prussian war of 1866, Austria lost its Italian provinces of Lombardy and Veneto, which together had formed the Lombardo-Venetian Kingdom.