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TAX REFORM | Tax plans of the new Austrian government

20.01.2020

On Tuesday 7th January 2020 the new Austrian government was sworn in. The coalition between the conservative and the green party marks the first time the green party is part of a ruling coalition in Austria. The government plan for the next five years includes multiple measures in the area of tax and social security.

Here's what lies ahead for Austria in tax:

  • Reduction of the tax rate of the first, second and third level of the Austrian income tax rate
  • Extension of the tax-free profit allowance (Gewinnfreibetrag)
  • Reduction of the corporate income tax rate to 21%
  • Increase of the family bonus
  • Tax exemptions for ecological and ethnic investments
  • Tax exemption for capital gains from securities, if held for a certain period (private investors)
  • Additionally, to the participation in capital, tax-privileged employee participation programs should also enable a participation in the profit of companies
  • Allow a 3-year distribution for agricultural profits and further changes to the taxation of farmers to ensure social security
  • Allow a profit carryback for accounting on cash basis analogous to the already existing solution for artists
  • Deductibility of donations - extension to further organisations and simplification of the application process
  • Tax incentives for Austrian film productions
  • Reduction of the VAT rate for feminine hygiene products
  • Promotion of environmentally friendly transport of employees (eg cycling) via tax privileges
  • Changes to the taxation of tobacco
  • Eco-social tax reform
  • Recodification of the income tax law in order to make it simpler and fairer
  • Simplification and modernisation of services should lead to more efficient handling of tax proceedings and to more legal certainty (eg possibility to request a tax audit)
  • Registration obligation for privately rented-out accommodation
  • Simplifications for business transfers within the family and for start-ups and small businesses
  • Extend the fight against tax evasion

The government programme can be found here and here (German only).

So far, the program of the new government is not very specific when it comes to details. Especially the recodification of the Austrian income tax law has been promised now for many years. We will keep you updated as soon as a concrete text for a tax reform has been published.

 

 

 

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Partner, Head of International Tax
Steuerberater

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