Austria Income Taxes
Individual Income Tax: Austria’s individual income tax rates for 2009 are progressive 0%-50% (4 tax bands).
Corporate Tax: Austria corporate tax rate for 2009 is 25%.
Capital Gains: Capital gains of companies are taxed at 25%.
Dividend income and capital gains from foreign companies are tax exempt under the participation exemption rules.
Individuals have reduced rates for 50% of the individual’s average tax rate, up to a limit of 25%.
Austria Social Security
The maximum social security rates in Austria are:
- Employer -21.9%
- Employee – 18.2%
Deduction of Tax at Source in Austria
Austria tax is deducted at source from the following payments:
- Dividend- 25%
- Interest- 0%
- Royalties- 20%
The Austrian tax year is the calendar year.
Austria V.A.T and Other Taxes
V.A.T – The standard V.A.T. rate in Austria is 20%. There is a reduced V.A.T. rate of 10%.
The reduced VAT rate applies to tourism services, food and agriculture.
The threshold for VAT registration in Austria is an annual turnover of EUR 7,500.
Austria Other Taxes
Real Estate Tax, Real Estate Transfer Tax.
Austria Tax Efficient Regimes and Sectors
Dividend income is exempt from corporate income tax when the shares are held by a private foundation (Privatstiftung). Income from interest and capital gains from the selling of shares are subject to an interim tax (Zwischensteuer) of 12.5%. When paying distributions to beneficiaries, the interim tax can be credited against the withholding tax.
Austria Residence and Liability for Taxation
Individuals are deemed to be resident for tax purposes if they make Austria their permanent place of abode, which means an individual must reside in Austria for more than six months of the year. Individuals are taxed on their worldwide income. Non-resident individuals are taxed on their income generated in Austria. Non-resident individuals who generate more than 90% of their total income in the country can apply for resident status.
Austria Rates of Income Tax
Resident individuals are subject to a headline income tax rate of 36.5%, with a personal allowance of EUR11,000. For income above EUR24,999 and below EUR60,000 the rate is 43.2%; income above EUR60,000 is taxed at 50%.
Child allowances are EUR494 for one child, EUR669 for two children, and EUR220 for each subsequent child.
Interest is taxed at 25%. Capital gains are taxed at the income tax rate.
Austria Social Security Taxes
Social security rates are calculated on total annual income, and comprise 7.65% health insurance, 16.25% pension insurance, and an additional 1.53% self-employment insurance. Accident insurance of EUR96.36 is also payable.
Sole traders can apply to be exempted from health and pension insurance if their annual profit is below EUR4,395.96.
Austria Property Taxes
A real estate tax of 3.5% is payable when purchasing property. This may be as low as 2% if the property is purchased from a close relative, i.e. a spouse or child
Austria Scope of Income Tax
All resident companies and permanent establishments of non-resident companies are subject to corporate income tax. Resident companies are liable for tax on their worldwide income. Non-resident businesses are taxed on their Austrian-sourced income only.
Austria Income Tax Rates
The corporate income tax for 2010 is 25%.
Austria Calculation of Taxable Base
Taxable income includes all trading profits, passive income and capital gains. Dividends are also included.
There is no time restriction on the carry forward of federal or local losses. However, the amount is limited to 75% of income for that year. Remaining losses may be carried forward and deducted in future years. Losses cannot be carried back.
Austria Filing Requirements and Payment of Tax
The standard tax year is the calendar year and tax returns must be filed by the end of April or, if filed electronically, by end of June. Unauthorised late filing may incur a maximum penalty of 10% of the tax due.
Quarterly payments are due on February 15, May 15, August 15 and November 15, and are based on the previous years’ figures.
Austria Withholding Taxes
Withholding tax of 25% is payable on domestic interest payments. The same rate applies to interest payments to non-treaty countries. No withholding tax is due on domestic royalty payments. Payments to recipients within the EU are exempt, and payments to non-treaty countries are subject to 20% withholding tax.
For domestic as well as non-treaty country dividend payments, a withholding tax of 25% is payable. A minimum 10% shareholding makes payments to other EU countries exempt from withholding tax.
A withholding rate of 20% applies to payments to authors, presenters, artists, architects and entertainers.
Austria Capital Transfer Tax
Capital transfer tax is charged at a rate of 1% on share capital issues and increases, and on contributions of capital to a company.
Austria Sales Taxes and VAT
The standard VAT rate is 20%. A reduced rate of 10% applies to food, books, medicines, hotel accommodation and transportation. Exports are zero-rated.
The areas of Jungholz and Mittelberg are excluded from VAT for the importation of goods.
Small businesses are exempt from VAT if their turnover does not exceed EUR22,000. Traders with a turnover of below EUR7,500 in an assessment period are not required to submit a return.