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Taxation

Taxation

The most important taxes are:

Taxation of Income

Income Tax (Einkommenssteuer)

Natural persons, whose domestic residence (Wohnsitz) or habitual residence (gewöhnlicher Aufenthalt) is in Austria, have to pay income tax. Basically, they are subject to income tax for their worldwide income. Non-resident taxpayers are only liable to income tax for their Austrian income. Generally earnings are subject to income tax if they fall into one of seven categories of income under fiscal law, which are as follows:

First, the sum of these seven items of income must be calculated. After subtracting some special and extraordinary expenses, the basis for the income tax calculation arises. It is a progressive tax from 0 to 555 percent.

An annual amount of up to €11,000 of income does not require any payment of income taxes.

In Austria employees receive a monthly salary including a 13th and 14th payment. These earnings enjoy tax privileges.

Companies and Income Tax
Sole proprietors and the partners of partnerships are also subject to income tax.

Taxation of partnerships:
The partnership itself is not subject to pay the tax. The profit will be directly attributed to the partners and they are subject to the income tax.

Corporate Tax (Körperschaftssteuer)

The profits of corporations are subject to corporate tax. The corporate tax is 25 percent (non-progressive).

Corporate tax payers have to pay a minimum amount of taxes regardless of whether a profit was earned or not. Companies with Limited Liability (GmbH) have to pay € 1,750 a year. New founders pay € 500 a year for the first five years, € 1,000 a year for the following five years and € 1,750 a year thereafter.

Joint Stock Corporations pay a minimum amount of taxes of € 3,500.

Withholding Tax on Investment Income (Kapitalertragssteuer)

Withholding tax on investment income is kept from dividends and interest from bank deposits as well as from bonds. 27,5 percent are withheld at source. So individuals have no other taxes to pay.

Value-Added Tax or Sales Tax (Umsatzsteuer)

The rate is 20 percent. In some special cases the tax is reduced to 10 or 13 percent.

Property Acquisition Taxes (Grunderwerbssteuer)

The purchase of land is subject to the property acquisition tax of 3.5 percent of the purchase price.

 
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