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Austria

Taxes

Updated 09/2012

Legal requirements

Direct taxes

Tax debtors and taxpayers are identical in this case. This means that the tax burden cannot be contractually transferred to other persons.

Corporation tax

Legal entities (limited companies, associations, cooperatives) are liable for corporation tax. Corporation tax is calculated on the basis of the income.

Income tax

Natural persons living in Austria are obliged to pay income tax without limitation. Each person who is obliged to pay income tax without limitation is entitled to a tax-freebasic allowance (minimum living wage).

Municipal tax

Municipal tax is purely a local authority levy. Companies must pay municipal tax to each local authority responsible for the area in which the company has business premises.

Input tax and input tax deductions

Businesses are eligible for input tax deductions on invoiced VAT for deliveries and services that they receive from other businesses. However, it must be noted that input tax deductions are only possible for separately invoiced VAT.

Commuter tax allowance

Under certain circumstances, people may be entitled to major or minor commuter tax allowances. The allowance reduces the income tax base and this is then used to recalculate the tax owed. The tax saving is approximately 30%.

Pay as you earn (PAYE)

Non self-employed people (e.g. workers, employees) have their income tax deducted at the source of their earnings and paid to the relevant tax office by their employer.

Income tax assessment

Persons liable for income tax (employees, workers, civil servants, retirees) are assessed by the tax office as part of the income tax return process (previously known as the year-end adjustment). Tax credits may be issued under certain circumstances.

Indirect taxes

In this case, tax debtors and taxpayers are not identical. This means that tax debtors can transfer tax burdens to other persons.

Businesses have to pay value-added tax (VAT) for all deliveries and other services that they provide for payment in connection with their business activities.

Businesses with an annual turnover in excess of EUR 30 000 are liable for VAT.

Businesses are eligible for input tax deductions on the basis of the VAT amount on invoices that they have to pay to other businesses provided they fulfil the prerequisites stipulated by the law for this.

Administrative procedures

Income tax

Income tax returns must be submitted in electronic form.

In cases where persons liable to pay tax do not have access to the appropriate technology (e.g. no internet connection) required to submit their return electronically, the E1 tax return form must be completed and then submitted to the relevant tax office.

Furthermore, it is only compulsory for those persons liable to pay tax who are required to submit monthly advance VAT returns (with a previous year’s turnover of more than EUR 100 000) to submit their tax returns via FinanzOnline.

Pay as you earn (PAYE): This is calculated in accordance with the income tax rates and is deducted from employee’s gross salary.

Corporation tax

Corporation tax returns must be submitted in electronic form.

In cases where persons liable to pay tax do not have access to the appropriate technology (e.g. no internet connection), the K1 tax return form must be completed and then submitted to the relevant tax office.

Municipal tax

Affairs relating to taxes (surveys, regulatory offences) are regulated by the respective tax administration procedures in place in each province.

Further information can be obtained from the relevant municipal district office, municipal office or Municipal Department 6 (Accounting Services, Duties and Charges) in Vienna. Municipal tax returns may be submitted electronically via FinanzOnline.

VAT

A valid VAT number is evidence of business activity and is a prerequisite for tax-free supply to other EU Member States or for receipt of goods from other EU Member States.

Each VAT number is contained in the database of the Austrian tax administration and is linked to the name and address of the corresponding business as well as to its VAT account. Recapitulative statements must be submitted electronically via FinanzOnline.

Payment: Any VAT owed must be paid by the 15th of the second month following (for example, the VAT owed for September 2007 would have to be paid by 15 November 2007).

Larger companies (with a previous year’s turnover of EUR 100 000 or more) must also submit an advance VAT return.

Input tax

Invoiced VAT charged by other companies for deliveries or other services purchased for business purposes can be deducted as input tax. This also applies to import VAT for imports from countries outside the EU.

Input taxes can be claimed during the initial set-up phase of a company (before any turnover has been generated). Input tax deductions can only be claimed if the supplier invoices contain specific information.

Resources

FinanzOnline is the Austrian tax administration’s internet-based, electronic data transfer tool.

Findok is a comprehensive online reference guide for tax law and contains interpretation advice from the Federal Ministry of Finance as well as decisions made by the independent tax senate.

The Federal Ministry of Finance supplies brochures and guides.

The tax calculation programs can be used to calculate tax online.

Useful information on payment dates and permitted forms of payment of tax, possible procedures in the case of incorrect assessments or previous appeal decisions and the possibility of correcting or reversing an assessment.

How much is the PAYE or income tax and which tax credits apply? Further information:

General information on taxes and levies — Information for first-time payers.

Tax forms can easily be obtained online using the tax office database of forms.

Useful information for people living and working in Austria is available from HELP, the Austrian government help service or the Business Service Portal USP.

Help & advice

Help & advice

Federal Ministry of Finance — the tax ombudsman service will answer any enquiries from citizens on tax matters.

Tax office officials are available to provide detailed information about personal tax issues.

The network for tax advisers, taxpayers and tax savers offers assistance for tax issues.

SOLVIT helps businesses deal with problems that arise when national authorities wrongly apply EU market rules.

E-mail a business organisation near you

The EU runs a network (Enterprise Europe Network) of local business organisations in most European countries that may be able to help you.

Choose your country and town and enter your enquiry below.

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