Austria

Value-added tax (VAT) (Mehrwertsteuer)

Generally, the Austrian VAT law is based on the 6th EU VAT Directive. Under the Austrian VAT law, companies and individuals carrying out an active business on a permanent basis are qualified as entrepreneurs for VAT purposes. As entrepreneurs, they have to charge the supply of goods or services provided to their customers with Austrian VAT at a rate of 20%. A certain limited range of goods and services is taxed at the reduced rate of 10% (e.g. books, food, restaurants, passenger transportation, medicine, hotel accommodation) or 13% (e.g. animals, seeds and plants, cultural services, museums, zoos, film screenings, wood, ex-vineyard sales of wines, domestic air travel, public pools, youth care, athletic events). Certain other transactions are exempted from Austrian VAT (e.g. export transactions, cross-border passenger transport by air or sea). In two areas, Jungholz and Mittelberg, a reduced VAT rate of 19% applies.

Input VAT

Entrepreneurs are entitled to deduct Austrian input VAT insofar as the input VAT does not result from goods/services purchased that are directly linked to certain VAT-exempt sales (e.g. interest income, insurance premium). However, certain transactions are exempt from Austrian VAT (e.g. export transactions) without limiting the ability of the entrepreneur to deduct the related input VAT. To be entitled to deduct input VAT, the entrepreneur must obtain an invoice from one's supplier that fulfils certain formal requirements.

VAT filing and payment

Entrepreneurs have to file monthly or quarterly VAT returns by the 15th day of the second month following the month concerned or by the 15th day of the second month following the quarter concerned. The balance of the VAT due and the input VAT deducted has to be paid to the tax office (if VAT burden) or is refunded by the tax office (if in a net input VAT position) to the electronic tax account of the entrepreneur. A separate report has to be filed by the entrepreneur at the tax office showing the cross-border, intra-EU transactions made.

Digital services tax ('Digitalsteuer')

On 22 October 2019, the Digital Tax Act ('Digitalsteuergesetz') was published in the Austrian Federal Law Gazette. From 1 January 2020, large multinational companies with a worldwide revenue of at least EUR 750 million and a yearly domestic revenue at least EUR 25 million from providing online advertising services in Austria are subject to 5% digital services tax.

The assessment base is the remuneration that the online advertiser receives from a customer (reduced by expenditures on intermediate inputs by other third-party online advertisers).

On 21 October 2021, Austria and other countries agreed on a Joint Statement to abolish their national digital services taxes and to refrain from introducing any new similar taxes when Pillar One comes into force. While the national digital services tax will remain in place until Pillar One comes into force, a specific crediting of the local (Austrian) digital services tax is taken into account in the transition period between 1 January 2022 and the entry into force of Pillar One.

Customs duties

Certain cross-border inbound movements of goods from non-EU countries trigger Austrian customs duty. The duty is levied according to the Austrian customs duty scheme, which is based on the EU customs duty scheme. It defines the customs duty tariffs, dependent on the nature of the goods.

Excise taxes

Excise taxes are imposed on certain products, including petroleum (approximately EUR 40 to EUR 600 per 1,000 litres), tobacco products (13% to 47% of price), and alcoholic beverages (tax rate depends on type of alcohol).

Stability fee for banks

A stability fee for financial institutions is charged at 0.024% based on balance sheet totals of over EUR 300 million to EUR 20 billion and 0.029% on balance sheet totals over EUR 20 billion. These contributions are deemed to be used for stability measures regarding the capital market.

Real estate tax

Local authorities annually levy real estate tax on all Austrian real estate property, whether developed or not. The tax is levied on the assessed standard ratable value (Einheitswert) of immovable property. The assessed value is usually substantially below the market value. The effective tax rate depends on the intended use of the real estate and is calculated using a special multiplier.

Tax rates:

• Agricultural area and forestry:
  • 0.16% for the first EUR 3,650 of the assessed standard ratable value.
  • 0.2% for the amount of the assessed standard ratable value exceeding EUR 3,650.
• Buildings and property are taxed at 0.2% of the assessed standard ratable value. This multiplier is reduced for:
  • Single family houses:
    • to 0.05% for the first EUR 3,650 of the assessed standard ratable value and
    • to 0.1% for the next EUR 7,300.
  • Leasehold and shared property:
    • to 0.1% for the first EUR 3,650 of the assessed standard ratable value and
    • to 0.15% for the next EUR 3,650.
  • All other property:
    • to 0.1% for the first EUR 3,650 of the assessed standard ratable value.

After the assessed standard ratable value is multiplied by the relevant multiplier, the real estate tax is calculated by using a special municipal rate fixed by each municipality (maximum 500%). Finally, the tax amount is reduced by a general reduction of 25% as stated by law and increased by a 35% inflation adjustment.

Real estate transfer tax

Tax is generally levied at 3.5% on transactions that cause a change in the ownership of Austrian real estate or in the person empowered to dispose of such property (e.g. direct owner). Real estate transfer tax is generally calculated on the basis of the acquisition price. However, the taxable base has to be at least the property value (Grundstückswert). This value will be calculated either on the basis of the sum of the projected pro rata three-fold land value (Bodenwert) and the pro rata value of the building or derived from a proper real estate price index. Further, in case the taxpayer is able to prove that the fair market value is lower than the property value, the fair market value represents the taxable base.

In the case of real estate transfers within the closer family circle, the three-fold assessed ratable value (capped at 30% of the fair market value) is taken as the tax base, and a tax rate of 2% applies. For transfers in connection with corporate restructuring under the Reorganisation Tax Act, the two-fold assessed standard ratable value is taken as the tax base, and the standard tax rate applies.

The taxable base for free-of-charge transfers (i.e. family and non-family transfers) is the property value. The rate for transfers without compensation is subject to different levels. It is 0.5% for a property value of below EUR 250,000, 2% up to EUR 400,000, and 3.5% over EUR 400,000. In case of business transfers, the tax is capped at 0.5% of the property value. For transfers in connection with corporate restructuring under the Reorganisation Tax Act and the consolidation of shares, the tax rate amounts to 0.5% of the property value.

Real estate transactions with a tax base of EUR 1,100 or below are exempt.

Note that an additional 1.1% registration fee becomes due upon incorporation of the ownership change in the land register. The registration fee is assessed on the basis of the market value. There is a preferential taxation (three-fold ratable value capped at 30% of the fair market value) in case of family transactions or corporate restructuring qualifying for the application of the Reorganisation Tax Act.

Share transfers

Real estate transfer tax in the amount of 0.5% is also triggered in situations where the shares of companies and shares of partnerships owning Austrian real estate are transferred. The following transactions trigger real estate transfer tax:

• The transfer of at least 95% of the shares in a real estate owning partnership to new shareholders within a period of five years.
• The transfer of at least 95% of the shares of a corporation to unify them in the hands of a single acquiring shareholder or in the hands of several shareholders forming a tax group (according to Section 9 of the Austrian Corporate Income Tax Act).

Shares held by a trustee for tax purposes will be attributed to the trustor and are therefore part of the calculation of the shareholding limit. Real estate transfer tax is triggered only in scenarios where the shares of real estate owning corporations or partnerships are transferred by their direct shareholder or partners (no indirect transfer). The tax base for share transfers is the property value.

Stamp duty

Stamp duty is imposed in connection with certain legally predefined transactions for which a written contract has been established (e.g. lease contracts for business premises, bills of exchange, assignments of receivables). The Austrian administration's understanding of a ‘written contract’ is very broad and covers not only paper contracts but also contracts concluded by electronic means (e.g. electronically signed emails).

The stamp duty is triggered upon the establishment of a legal relationship if at least one Austrian party is contractually involved or, even if a contract is concluded between non-Austrian parties only, if the subject of the contract relates to Austria (e.g. lease contract on Austrian real estate). However, for most legal transactions, various structuring possibilities are available in order to avoid triggering stamp duties (e.g. setting up of contracts abroad, offer-acceptance procedure, usage of audio-tapes).

Loan and credit agreements are not subject to stamp duty.

The stamp duty rates for the most common legal transactions are as follows:

Notes

1. Lease agreements concerning living space concluded as of 11 November 2017 are no longer subject to a stamp duty.

Environmental taxes and incentives

In Austria environmental taxes comprise energy taxes, transport taxes, resource taxes, as well as pollution taxes (e.g. taxes for electricity, natural gas, and coal consumption, motor vehicle tax, vignette for the use of highways, road pricing for lorries for the use of highways, toll for specific routes on highways, tax on mineral oils, waste deposit levy, fee on water use).

Under the Eco Social Tax Reform Act, Austria introduced a carbon tax as of 1 October 2022. Pursuant to this regulation, CO2 emissions get a price (starting with EUR 30 per ton and increasing annually up to EUR 55 per ton in 2025). In order to mitigate the adverse financial effects resulting from the implementation of these provisions, the increase is partially offset by the introduction of a climate bonus. Furthermore, a carbon leakage rule aimed at preventing companies from relocating and a hardship clause for companies with high energy intensity were introduced.

Green incentives are mainly granted by Municipal Credit (Kommunalkredit Public Consulting GmbH of KPC), but also by other funding agencies (e.g. Austrian Promotion Agency or FFG). Examples are the following funding programs: Raw Materials Management, Air Pollution Control, Energy Savings, Thermal Renovation of Buildings, Indoor LED Systems, New Construction in Energy-efficient Design, Air Conditioning and Cooling, Thermal Solar Systems, etc.

Payroll taxes

Payroll taxes are income taxes levied on employment income that are withheld by the employer. A progressive tax rate is applied to the tax base, being the salary after deduction of allowances and various expenditures (e.g. social security contribution). The employer is legally obligated to withhold the payroll tax and liable to do so vis-a-vis the Austrian tax authority.

Social security contributions

Monthly rates of compulsory (pre-tax) social security contributions are shown below for sickness, unemployment, pensions, accident insurance, and certain minor contributions:

* For an assessment basis between EUR 0 and EUR 1,951: 0%; above EUR 1,951 to EUR 2,128: 1%; above EUR 2,128 to EUR 2,306: 2%; above EUR 2,306: 3% of the assessment basis. Prior to 1 January 2024: 0% between EUR 0 and EUR 1,885; above EUR 1,885 to EUR 2,056: 1%; above EUR 2,056 to EUR 2,228: 2%; above EUR 2,228: 3%. Prior to 1 January 2023: 0% between EUR 0 and EUR 1,828; above EUR 1,828 to EUR 1,994: 1%; above EUR 1,994 to EUR 2,161: 3% of the assessment basis. Prior to 1 January 2022: 0% between EUR 0 and EUR 1,790, 1% between EUR 1,790 and 1,953, 2% between EUR 1,953 and EUR 2,117, 3% above EUR 2,117. Prior to 1 January 2021: 0% between EUR 0 and EUR 1,733, 1% between EUR 1,734 and 1,891, 2% between EUR 1,892 and EUR 2,049, 3% above EUR 2,049. Prior to 1 January 2019, generally 3%.

** On a maximum assessment basis (gross salary) of EUR 6,060 (EUR 5,850 prior to 1 January 2024) per month for current payments. Special payments receive a tax favoured treatment (employer at 20.48%, employee at 17.07%, for a total of 37.55%). The maximum assessment basis (gross) amounts to EUR 12,120 (EUR 11,700 prior to 1 January 2024) per year.

In addition, the employer is liable to the Family Burdens Equalisation Levy at the rate of 3.9% (3.7% as of 1 January 2025), the municipal tax on payroll at the rate of 3% of monthly gross salaries and wages, and a public transportation levy of EUR 2 per week per employee in the city of Vienna. In addition, a contribution to the Chamber of Commerce is levied at a rate of approximately 0.40% (between 0.32% and 0.42%) of monthly gross salaries paid (depending on the province). Moreover, a contribution to the mandatory employee pension fund at the rate of 1.53% on monthly gross salaries is payable for employments subject to Austrian employment law.