"On the one hand you say EU acquis [accumulated legal acts and court decisions encompassing the body of European Union law], but on the other hand you take steps which totally oppose EU acquis," Erdogan in Istanbul before departing for an official visit to Saudi Arabia.
On Wednesday, the Austrian parliament passed an amendment to a 1912 bill on Islam banning the foreign financing of Muslim organizations and limiting foreign imams' activities to curb the influence of radical Islam.
According to national media, about 60 out of Austria's 300 imams are sent from Turkey through the Austrian Turkish Islamic Union (ATIB), its largest Muslim umbrella organization.
This week's adoption of new legislation comes amid increased radicalization of Europeans, who travel to Iraq and Syria to join extremist groups.
The European Union is home to some 13 million of Muslim immigrants, concentrated mainly in Germany and France. According to the Pew Research Center, France, Britain and Germany view Muslim immigrants more favorably than other European countries.
In Austria, Islam is the fastest-growing religion with over 570,000 Austrians identifying themselves as Muslims in 2013, amounting to 7 percent of the country's population.
The 1912 law on Islam was adopted by Emperor Franz Joseph I to ensure the integration of Austro-Hungarian Empire's Muslim population after Bosnia and Herzegovina was annexed four years prior.