Personal Income is taxed in Austria depending on the residency status of the tax filer. As far as residents are concerned, they are taxed on their worldwide income. This implies that both, their income sourced from with Austria, as well as income sourced from outside Austria is used for computation of income tax.
On the other hand, as far as non-residents are concerned, it can be seen that they are only taxed on the income that has been earned (or sourced) from within Austria.
Personal Income Taxation is levied in Austria at a progressive rate. This implies that with increasing income thresholds, the applicable tax rate also increases subsequently.
Personal Income Tax Rates
The following income tax rates are applicable in Austria, on personal income for individual taxpayers:
- For an income between EUR 11,000 and below: A tax rate of 0% is levied.
- For an income between EUR 11,001 and EUR 18,000: A tax rate of 20% is levied.
- For an income between EUR 18,001 and EUR 31,000: A tax rate of 35% is levied.
- For an income between EUR 31,001 and EUR 60,000: A tax rate of 42% is levied.
- For an income between EUR 60,001 and EUR 90,000: A tax rate of 48% is levied.
- For an income between EUR 90,001 and EUR 1,000,000: A tax rate of 50% is levied.
- For an income higher than EUR 1,000,000: A tax rate of 55% is levied.
Withholding Tax on Payroll
Under the social security program, wage tax and social security contributions are also accounted for, in the following manner:
- For an annual taxable salary of EUR 29,000: A monthly wage tax in lieu of WHT is deducted equivalent to EUR 155.36.
- For an annual taxable salary of EUR 36,000: A monthly wage tax in lieu of WHT is deducted equivalent to EUR 291.40.
- For an annual taxable salary of EUR 54,000: A monthly wage tax in lieu of WHT is deducted equivalent to EUR 699.34.
- For an annual taxable salary of EUR 76,000: A monthly wage tax in lieu of WHT is deducted equivalent to EUR 1239.34.
Other than the personal income taxes mentioned above, there are no other local taxes imposed in Austria.
Corporate Income Taxation
For income tax determination, corporations, and corporations are liable to unlimited taxation in Austria on their aggregated income (both locally sourced, and sourced outside of Austria), if they are legally incorporated in Austria. They are also taxed on their aggregated income if their effective management is in Austria.
On the other hand, Non-Austrian corporate tax residents are subject to limited taxation on only that part of income that is sourced from within Austria. Within this domain too, there are exceptions.
Corporate Income Tax Rates in Austria
A standard rate of tax is applicable on Income Tax Returns in Austria, predominantly at a rate of 25%. This is regardless of the profit distribution status of the said company. This is primarily due to the classification of corporates in Austria as individual tax subjects.
However, on the shareholder level, it can be seen that profit distributions are levied a Withholding Tax (WHT) equivalent to 25% (for corporations) and 27.5% (for other miscellaneous recipients).
Additionally, there is also a minimum Corporate Tax that is imposed on companies. This is essentially for those companies that are currently in a tax loss position. The minimum corporate income tax can be carried forward without any time limit, and can subsequently be adjusted with future payments that the company makes when it bears the corporate income tax. The minimum corporate income tax in this case amounts to EUR 875.
Other than the Corporate Income Taxes mentioned above, there are no corporate income taxes levied at a local or a provincial level in Austria.
Other Corporate Taxation in Austria
In addition to Corporate (and Personal) Income Taxation, there are a couple of other taxes that are levied in Austria. These taxes are as follows:
- Value Added Tax (VAT): VAT has been introduced as a consumption tax. It is levied across almost all goods and services, at a rate of 20%. However, a limited range of goods and services are also taxed at a reduced rate of 10% and 13%. The reduced rate of 10% is mainly applicable on books, food and hotel accommodation. Similarly, the reduced rate of 13% is levied on animals, seeds and plants, as well as other cultural services, and zoos.
- Digital Service Tax: Digital Service Tax is imposed on companies that have a total aggregated revenue of EUR 750 million, as well domestic revenue of at least EUR 25 million resulting from provision of advertising services in Austria. The rate of tax levied at a rate of 5%.
- Custom Duties: Custom Duties are also levied in Austria on certain goods and services including petroleum, tobacco and alcohol. For petroleum related products, the custom duty varies from EUR 40 to EUR 600 per 1000 liters. For tobacco products, the custom duty is imposed at a rate varying from 13% to 47% of the total price.
- Financial Institutions Stability Fee: A stability fee is also levied on banks and other financial institutions that have balance sheet totals ranging from EUR 300 million to EUR 20 billion at a rate of 0.024%. In the case where the balance sheet amounts to a figure greater than EUR 20 billion, then a stability fee at a rate of 0.029% is levied.
- Real Estate Transfer Tax: A real estate transfer tax is also levied at a rate of 3.5% that is imposed in cases where there is a change in ownership of real estate property in Austria.
- Stamp Duty: Stamp Duties are also imposed at rates depending on the type of legal document that is processed. The varying stamp duties are given below:
- Lease Agreements are levied at a rate of 1%.
- Certificates of bonds and pledges, a rate of 1% is levied.
- Bill of exchange stamp duty is levied at a rate of 0.13%.
- Social Security Contributions: There are different categories of social security charges that are supposed to be paid by social security contributions. The employer contributions (aggregated) towards social security amount to 21.23%, whereas employee contributions amount to 18.12%.