Austria

Employment expenses

Expenses incurred in ‘acquiring, securing, and maintaining’ income are deductible from the taxable income of the particular source of income concerned. All employees are entitled to a standard allowance of EUR 132. Expenses in excess of this amount will be allowed if supported by receipts (e.g. office in home, continuing education).

Employee portions of mandatory contributions to Austrian and/or foreign social security are tax deductible.

In computing income from employment, expenses related to the production and collection of income is generally tax deductible. These expenses include the following:

• Membership fees to certain organisations (e.g. Chamber of Labour, workers council).
• Compulsory social and pension insurance contributions.
• Commuting expenses between residence and place of work where a standard deduction can be claimed per month; the deductible amount depends on the distance and the possibility of using public transport.
• Work equipment and special work clothes.
• Business related travel expenses and per diems.
• Technical literature.
• Training costs.

Personal deductions

Special expenses

Church tax is deductible up to EUR 400, and charitable contributions to certain institutions are deductible up to 10% of the current year’s taxable income. Austrian tax adviser fees are fully deductible.

Extraordinary expenses

Individuals who incur extraordinary expenses can obtain some tax relief. This relief applies to resident individuals who are subject to unlimited tax liability who incur unavoidable expenses (e.g. funeral costs, medical expenses for special treatments not reimbursed by health insurance). Depending on income and family status, the taxpayer may be able to deduct an amount that exceeds a certain percentage of one's income. The retention rates are as follows:

The percentage is reduced by 1% for an individual:

• who is eligible for a sole earner tax credit or a single parent tax credit, or
• who is not eligible for a sole earner or a single parent tax credit but the individual is married more than six months during the calendar year or living more than six months in a registered partnership and is not permanently separated from one's married/registered partner whose income is less than EUR 6,937 per year,
• as well as for every additional child if the taxpayer receives for more than six months the child tax-free amount or the alimony tax credit.

Certain expenses (e.g. damage due to disaster) are generally fully tax deductible.

Family bonus plus

The family bonus plus is a tax credit, which reduces the amount of tax paid. The annual tax credit of EUR 2,000 per child can be claimed for children up to the age of 18 years, who live in Austria, and are entitled to family allowance. If both parents claim the family bonus plus, both taxpayers are entitled to 50% of the tax-free amount (EUR 1,000 per annum for each taxpayer).

For children between 19 and 24 (in some cases until 25), the family bonus plus can be granted up to an amount of EUR 700 per annum.

Allowances

Generally, personal allowances take the form of tax credits, i.e. deductions from tax payable. By contrast, family allowances are paid to the taxpayer in cash. See the Other tax credits and incentives section for more information.

Losses

Business losses or rental losses can be offset with other categories of income. Business losses can be forwarded in following years in case assessed by adequate and orderly accounting.

Rental losses cannot be carried forward.

For a discussion of capital losses, see Capital gains in the Income determination section.