In Austria, companies are subject to annual corporate income tax (CIT) at a standard tax rate of 25%. In contrast, individuals are subject to personal income tax to a progressive tax rate of 0% up to 50%. Individuals maintaining residence or habitual abode in Austria are subject to personal income tax.
Unlimited tax liability is extended to all domestic and foreign sources of income (worldwide income). Otherwise individuals are subject to limited tax liability for Austrian source income.
An individual has his/her habitual abode in Austria if he/she is not just staying in the country temporarily. If the stay in Austria exceeds six months unlimited tax liability in Austria is applicable. The level of tax rate needs to be carefully chosen and needless complexity in tax rules avoided.
What is the administrative burden of complying with taxes in Austria and how much do firms pay in taxes?
On average, firms make 12 tax payments per year, spend 166 hours per year filing, preparing and paying taxes and pay total taxes amounting to 52% of profit.
Most indicator sets refer to a case scenario in the largest business city of an economy, except for 11 economies for which the data is a population-weighted average of the two largest business cities.
Globally, Austria is ranked 72 out of 189 economies on the ease of paying taxes. The rankings for comparator economies and the regional average ranking provide other useful information for assessing the tax compliance burden for businesses in Austria.
What the paying taxes indicators measure:
Capital Duty
- Applicable until 31 December 2015: A capital transfer tax of 1% is levied on compulsory shareholder contributions, as well as voluntary direct and hidden capital contributions to an Austrian corporation if effected by the direct shareholder. A partnership with a corporation as an unlimited partner is deemed to be a corporation.
Payroll tax
- Municipalities levy a general payroll tax of 3% on total salaries and wages paid monthly by permanent establishments based in Austria.
Tax payments for a manufacturing company (number per year adjusted for electronic and joint filing and payment)
- Total number of taxes and contributions paid, including consumption taxes (value added tax, sales tax or goods and service tax): 30(4 CIT, 12 VAT, 14 payroll)
- Method and frequency of filing and payment: electronic; VAT/payroll monthly, CIT quarterly
Time required to comply with CIT and VAT (hours per year)
- Collecting information and computing the tax payable: 23h (10h CIT, 13h VAT)
- Completing tax return forms, filing with proper agencies: 11h (2,5h CIT, 8,5h VAT)
- Arranging payment or withholding the preparation of separate tax accounting books, if required: 9h (2,5h CIT, 6,5h VAT)
Total tax rates 2015
- Corporate income tax: 25%
- VAT standard rate: 20%
- Social contributions and labour taxes paid and borne by the employer: 31% top marginal rate (partly a maximum monthly basis of EUR 4.650, 14 times p.a. applies)
- Property transfer tax: 3,5%
- Capital transfer tax: 1%