Peculiarities of taxation in Austria in 2021

Before starting a company, it is recommended to know the specifics of taxation in Austria in 2021. It is mandatory to make tax payments when obtaining citizenship in this state or running a business.

Tax system of the state

The tax model is Eurocontinental. High values of contributions to the development of medicine, education, and other social needs. All taxpayers in Austria in 2021 are divided into 2 main groups:

• Liability is not limited - the resident has a permanent residence, an address in the country. Dues, in this case, are paid on all income, including that received in other countries;
• Liability is limited - the resident has a domicile in another state or has been in Austria for no more than six months, does not have a legal address in the territory. Charges are imposed on income earned in the country.

Before registering a company in Austria in 2021 for relocation purposes, it is advisable to familiarize yourself with the taxes to be paid by individuals. According to current legislation, fees are required on income derived from hired labor or self-employment, real estate, and other sources. The levy on value-added is 20 percent. Some goods and services are subject to a 10 and 13 percent rate.

If you buy a car, you will be required to pay transportation tax. Road fees must also be paid. There is a mandatory fee for skiers in the country. The state applies progressive rates. Taxes for businesses may differ depending on the tax base.

Taxes for individual entrepreneurs and companies

A sole proprietor makes a levy on the annual income that remains after deducting business expenses and insurance fees. Up to 12% of gross income may be deducted.

The amount of the fee can vary depending on the size of the balance after the expense deduction. If it is less than 11,000, the rate can be zero. For values up to 25,000 euros it is 36.5%, up to 60,000 it is 43.2%. If the income exceeds this amount, the rate can reach 50%.

The procedure for paying the minimum corporate tax may depend on when the company was founded. If it was incorporated before June 30, 2013, the 5% tax is related to the minimum MC amount.  For companies incorporated after that date, a minimum fee of €500 is payable for the first 5 years after incorporation, thereafter €1,000 annually.

In addition to the corporate tax, capital gains, income tax, dividends, interest, etc. are payable. To learn more about the nuances of tax optimization, contact our experts at IT-OFFSHORE.