Income tax in Austria
Taxation Researcher | July 21, 2021
INDIVIDUAL TAXATION
Austrian residents are subject to unlimited tax liability, where their worldwide income will be subject to Austrian taxation (of course, in deference to tax treaties). Married couples are taxed separately.
INCOME TAX
Taxable income is classified according to different categories. For individuals, the categories are: (1) agriculture and forestry income; (2) professional income and income from other independent services; (3) trade and business income; (4) employment income; (5) capital investment income; (6) rents, lease payments, and royalties; and (7) other specified income, including certain annuities and capital gains.
Taxable income under each category is calculated under different rules. Net taxable income from all sources are then aggregated and taxed at progressive rates.
INCOME TAX 2020 |
|
| TAXABLE INCOME, € | MARGINAL TAX RATE |
| Up to €11,000 | 0% |
| €11,000 - €18,000 | 25% |
| €18,000 - €31,000 | 35% |
| €31,000 - €60,000 | 42% |
| €60,000 - €90,000 | 48% |
| €90,000 to €1 million | 50% |
| Over €1 million | 55% |
| Source: Global Property Guide | |
INCOME TAX 2015 |
|
| TAXABLE INCOME, € | MARGINAL TAX RATE |
| Up to €11,000 | 0% |
| €11,000 - €25,000 | 36.50% on band over €11,000 |
| €25,000 - €60,000 | 43.2143% on band over €25,000 |
| Over €60,000 | 50% on all income over €60,000 |
| Source: Global Property Guide | |
Residents are entitled to tax credits and some deductions.
RENTAL INCOME
Taxable rental income is the excess of receipts over income-related expenses (werbungskoten). Expenses such as maintenance and repairs, depreciation, administrative expenses (including professional tax advice), interest payments and real estate tax are deductible.
Stamp Duty on Lease Contracts
Stamp duty is levied on various transactions in Austria, including lease contracts. Stamp duty rates range from 0.8% to 2%.
CAPITAL GAINS
Capital gains realized from properties which were acquired as of 31 March 2002 is subject to capital gains tax at a flat rate of 30%. Taxable capital gains are calculated as selling price less acquisition costs and related expenses.
After a holding period of 10 years, sellers may decrease the capital gain by 2% per year as inflation reduction, up to a maximum of 50% deduction.
Capital gains realized from properties acquired before 31 March 2002 are taxed at specific different rates, either a flat rate of 15% on sales price or a flat rate of 3.5% on sales price, depending on several conditions. Sellers may also choose to be taxed at a flat rate of 25% on the capital gains.
PROPERTY TAXATION
Real Estate Tax
Property taxes in Austria are levied on the assessed value of real property, which is generally less than the prevailing market value. It is levied at a basic federal rate, multiplied by a municipal coefficient. The basic federal rate is usually up to 0.20% and the municipal coefficients range up to 500%.
CORPORATE TAXATION
INCOME TAX
The standard corporate income tax rate is 25%, which is levied on income and capital gains earned by companies. This rate applies to companies incorporated in Austria or foreign companies doing business in Austria.