Individual - Significant developments

Last reviewed - 27 January 2021

From 01.01.2020 on, employers of individuals subject to unlimited taxation in Austria were required to withhold Austrian wage tax. However, due to the COVID-19 Tax Measures Act this provision was retroactively revoked:

Thus, foreign employers without a PE for wage tax purposes in Austria – contrary to the current legal situation and the statements made to date by the Austrian Ministry of Finance – will no longer be required to withhold income tax from the income of their employees with unlimited tax liability in Austria. The new legal provisions apply retroactively from 1 January 2020, i.e. the former law will be reversed from the beginning.

If the foreign employer has already fulfilled the current obligation to deduct wage tax in 2020, this wage tax deduction will be considered a voluntary wage tax deduction under the new regulation.

In the future, foreign employers without a PE for wage tax purposes in Austria will therefore have the following options:

  1. a) A voluntary payroll tax deduction is made:

In this case, this income will be treated as income subject to wage tax. In the event of an audit, the employer is also required to grant access to the payroll accounting and other documents relevant to the wage tax audit and to provide information. In contrast to the obligatory wage tax deduction, however, the employer is not liable for wage tax. If an employer without an Austrian PE has not correctly carried out the voluntary wage tax deduction, the employee will be held directly liable and a compulsory assessment would have to be made.


b) A voluntary wage tax deduction is not made:

In this case, the foreign employer must submit a wage certificate (official form L17) to the tax office under the following conditions:

  • The employee is subject to unlimited tax liability in Austria
  • The employee predominantly carries out his/her activity in Austria for more than six months in the respective calendar year

Generally, the wage statement must be submitted to the tax office by the end of January of the following year or, in the case of electronic transmission, by the end of February of the following year. For the calendar year 2020, it must be submitted by 31 March 2021 at the latest.