Page 9 - Mazars Central and Eastern European tax guide 2023

Austria rentals with a residential purpose, entertainment and Investment income (e.g., interest, dividends, capital gains
art. Many exemptions are in place (e.g., exports, interest,
from investments) is generally subject to a separate tax
insurance premiums, real estate). Entrepreneurs with rate of 27.5%. Capital gains from real estate are subject
annual net sales not exceeding EUR 35,000 are exempt to a tax rate of 30%.
from VAT obligations. Non-residents trading in Austria Certain private expenses are deductible under conditions
(B2C) are subject to registration immediately, unless they
Mazars Austria GmbH are applying for the OSS (central VAT compliance in their (e.g., donations to charities, churches, tax advisory fees,
Kärntner Ring 5–7 EU-home country). Monthly/quarterly returns are filed tax losses carried forward).
1010 Vienna electronically, and annual returns must be completed Partnerships are not subject to income tax themselves.
Phone : +43 1 531 74-0 by 30 June of the following year. Companies represented Their profit is subject to either income tax or corporate
E-mail: vienna@mazars.at by a tax advisor can have the deadline extended income tax at the level of the partners.
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substantially.
In Austria, a compulsory public social security system
is in place.
Excise for certain alcoholic drinks (e.g., wine, beer),
natural gas, oil, coal, etc. in line with the EU system. Social security contributions for employees are partly
borne by the employee and by the employer. The base
Corporate taxes and other direct taxes companies (GmbH); for GmbHs the minimum amounts Personal income tax / Social security system is the gross salary and benefits. A maximum contribution
are further reduced for the first 10 years of existence. Any base of EUR 81,900 per year for 2023 applies. The social
Under the domestic tax law, corporations are deemed unused minimum amounts can be offset against future CIT According to the domestic tax law, individuals are security contributions amount to 39.15% (18.12%
to be tax resident in Austria if they have either their payment obligations. deemed to be tax resident in Austria if they have their employee and 21.03% employer). Additionally, employers
registered seat or their effective place of management Tax losses can be carried forward indefinitely (but only 75% residence or habitual abode in Austria. In this case, the are obliged to pay various other payroll-related costs
in Austria. In which case, the worldwide income of the of the profit of a single year can be offset). individual's worldwide income is subject to Austrian amounting to approximately 8.6%.
corporation is generally subject to Austrian corporate Thin capitalization rules (TCR) are in place in accordance income tax. Other individuals are subject to tax on income
income tax. Other corporations are subject to Austrian with the EU-ATAD (Anti Tax Avoidance Directive). Further from their Austrian sources. For self-employed persons, the same maximum
corporate income tax only on the basis of income restrictions relate to the deduction of interest paid The term income is specified in the Income Tax Act. contribution base is used (EUR 81,900 per year for 2023).
generated from Austrian sources. Partnerships are to intercompany recipients. CFC rules were introduced Tax rates are progressive from 0% (for yearly income Social security contributions amount to 26.83%. This
not subject to CIT. The corporate income tax rate in accordance with the EU-ATAD. up to EUR 11,693) to 55% (for yearly income exceeding insurance covers health insurance, pension insurance and
is currently 24%. The tax rate will be reduced to 23% from Some 100 Double Tax Treaties are in place. Withholding EUR 1,000,000). Certain allowances are available accident insurance. For the first 3 years, lower contribution
2024 onwards. tax can be reduced at source to treaty rates or under depending on the taxpayer’s family status. Income tax bases are applicable.
The determination of the tax base is generally derived the EU-Parent-Subsidiary Directive, when formal on wages is withheld and directly paid to the tax office No social security contributions are due for income that
from the result of the income statement under commercial requirements are met. by the employer. does not exceed EUR 500.91 per month.
law, which is then amended insofar as the tax law Starting with 2023, there will be an allowance for certain
contains deviating rules (e.g., tax exemptions, restrictions investments of 10% of the acquisition costs and a bonus for
of deductions, or tax specific valuation rules). ecological investments of 5% (with an absolute cap of EUR
There is a yearly minimum CIT amounting to EUR 3,500 for 1 million per company per year).
public companies (AG) and EUR 1,750 for limited liability
Average wage
Transfer pricing in Austria VAT and other indirect taxes Wage related taxes in Austria Minimum wage* in private sector
Arm's length principle ü Since 1988 The harmonized EU-VAT-system applies. The general rate in EUR in EUR
Since 1988 / for the sale of goods and services is 20%. Reduced rates
Documentation liability ü extended in 2016 of 10% or 13% apply, for example, for agricultural products, 2,120 4,497**
APA ü Since 2011 VAT options in Total wage cost 2,747 129.57% 5,827 129.57%
Every business unit Austria Applicable / limits Employer's social security and other contributions*** 627 29.57% 1,330 29.57%
Country-by-Country of a CbC-relevant group
liability ü must submit a notification Distance selling As of 1 July 2021, the Gross salary**** 2,120 100.00% 4,497 100.00%
about the reporting entity. OSS system is applicable. Personal income tax 89 4.19% 808 14.12%
Master file-local Call-off stock ü Employees' contributions 318 14.98% 635 17.98%
file (OECD BEPS 13) ü –
applicable VAT group registration ü Net salary 1,714 80.83% 3,054 67.91%
Penalty Cash accounting - yearly * Example – employee in the retail business in Austria, 1st professional year.
amount in EUR (approx.)* EUR 700,000/year ** Average monthly salary of full time employed persons in Austria in 2020 (yearly remuneration divided by 12 months).
lack of documentation ü up to EUR 50,000
Import VAT deferment ü *** In addition to social security, the mandatory contributions to the family equalization fund, surcharge, severance payment and municipal taxes are included here.
**** Monthly gross salary (yearly remuneration divided by 12 months).
potential fines according Gas, electricity, heating, emission
tax shortage ü
to Tax Criminal Law
quotas, cell phones, game consoles,
Local reverse charge construction services, scrap, auction
(foreclosure) of immovable property.
Persons who are linked
directly or indirectly Option for taxation
Related parties > 50% by ownership (capital)
or control (same letting of real estate ü
management, same owners). supply of used real estate ü Florian Würth
Safe harbours No – VAT registration EUR 35,000/year Partner – Tax Advisor – CPA
Phone: +43 1 531 74-780
Level of attention paid by Tax threshold** E-mail: florian.wuerth@mazars.at
Authority 8/10 * Not applicable for corporate enterprises.
** VAT exemption for domestic small business.
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