Austrian Tax Amendment Act 2024

The Austrian Tax Amendment Act 2024 has been published on 10 July 2024. The key changes of the Austrian Tax Amendment Act 2024 were already covered by our newsletter dated 8 May 2024 based on the draft. During the review process, the Austrian Tax Amendment Act 2024 was subject to the following amendment:

Income Tax

• A lack of securitization of assets held by a fund can now be remedied by way of securitizing the fund shares themself. Therefore, even if the fund invests in non-securitized assets, the special tax rate (27.5% for individuals instead of the progressive tax rate of up to 55%) can become applicable, provided the shares in the fund itself is securitized.
• The exemption from withholding tax for corporations is extended to income from crypto currencies.
• The assessment allowance of EUR 730 per year can always be deducted if the total income includes income from employment – regardless of whether it is subject to wage tax withholding (e.g., cross-border commuters or embassy staff). In such case, the allowance can be deducted from other income items not subject to wage tax (except for income from capital assets, for which the special tax rate of 25% or 27.5% applies). The new provision applies to all income items that were not yet assessed as of the day following the publication of the Austrian Tax Amendment Act 2024 (i.e., 11 July 2024).
• The tax exemption for food donations has been extended to non-alcoholic beverages (see also VAT-section).
• Payments as of 1 January 2025 connected to the construction or operation of flood protection facilities are subject to a special withholding tax of 10% (7.5% for corporations). For these purposes, the Austrian Tax Amendment Act 2024 also provides for a stamp duty exemption for rental agreements and easements.
• For employee bonuses to be granted tax-free, it has previously been required that they were, amongst others, paid-out in addition to the regular salary (i.e., no “conversion of salary”). The Austrian Tax Amendment Act 2024 implements a tax exemption also for situations where a fixed-term bonus payment is granted instead of a salary increase. This applies to all bonuses paid in 2024, even if they have already been paid.

Value Added Tax

• As of 1 January 2025, other services rendered between banks, insurance companies or pension funds that directly serve their respective core business (“intermediate bank exemption”), and the provision of personnel to associations of banks, insurance companies and pension funds are no longer exempt from VAT.
• The scope of application of the full VAT exemption for food donations has also been extended to donations of non-alcoholic beverages. The exemption applies to donations made from 1 August 2024 onwards.

Federal Fiscal Code

• Based on the ministerial draft, shareholders of a dual-resident company, that is not regarded as a legal entity in Austria (but only in their respective domicile countries), are subject to a joint and several liability. The Austrian Tax Amendment Act 2024 restricts this liability to a default liability. In addition, it was specified that the dual resident company must be comparable to an Austrian legal entity to fall into the scope of this rule. The liability provision is to be applied to those cases in which the tax assessment notice has not yet been issued at the time of the enactment of the Austrian Tax Amendment Act 2024.