Tax Rate Reduction in Austria in Detail
| validity of tax rates | income brackets in € | marginal tax rates | number |
| tax rates until
31/12/2008 |
up to 10,000 | no tax | 2,540,000 |
| from 10,000 to 25,000 | 38.333% | 2,580,000 | |
| from 25,000 to 51,000 | 43.596% | 1,145,000 | |
| from 51,000 | 50.000% | 270,000 | |
| new tax rates
as from 1/1/2009 |
up to 11,000 | no tax | 2,700,000 |
| from 11,000 to 25,000 | 36.500% | 2,400,000 | |
| from 25,000 to 60,000 | 43.214% | 1,235,000 | |
| from 60,000 | 50.000% | 200,000 |
The tax-free bracket for low income is raised from € 10,000 to € 11,000. As the tax credits remain unchanged, the actual obligation to pay income tax starts with the following annual income:
| double earners | |||
| 14 gross salaries | assessment basis of current receipts | gross receipts/month | |
| salaried employees | 16,871 € | 11,945 € | 1,205.09 € |
| wage earners | 16,897 € | 11,945 € | 1,206.96 € |
| public officials | 17,091 € | 11,945 € | 1,220.80 € |
| retirees | 14,944 € | 12,096 € | 1,067.43 € |
| sole earners (without a child) | |||
| 14 gross salaries | assessment basis of current receipts | gross receipts/month | |
| salaried employees | 18,478 € | 12,942 € | 1,319.83 € |
| wage earners | 18,507 € | 12,942 € | 1,321.91 € |
| public officials | 18,496 € | 12,942 € | 1,321.11 € |
| retirees | 16,170 € | 13,093 € | 1,155.00 € |
| income after the consideration of the tax-free amount for profits as from 2010 | ||
| double earners | sole earners (without a child) | |
| self-employed | 12,713 € | 13,859 € |
Taxation of other receipts
In Sec 67 para 1 the amount which is relevant for the tax-free sixth part of the annual income has been increased from € 2,000 to € 2,100. The other receipts minus social insurance contributions and other contributions constitute the taxable base for calculating the tax exemption limit under the assessment or the roll-up procedure by the employer.
Effects of the tax rate reductions
Whereas in 2008 2.54 million people out of 6.535 million taxpayers did not pay any taxes on salaries/income, from 1 January 2009 2.7 million people no longer pay taxes on salaries/income.
How to receive your money?
The rate reductions become applicable retroactively as of 1 January 2009. The employer has to recalculate the wage tax as soon as possible after the Tax Reform 2009 comes into effect (presumably in April) but not later than 30 June 2009 provided that technical and organisational facilities are available and there exists an employment relationship with that employer. Technical and organisational facilities are considered to be available if payroll software is used. Therewith, you promptly get back the taxes which were retained on salaries on too high a level as from 1 January 2009.
If the employer is not in the position to roll up the accounts (change of the employer), your local tax office recalculates your taxes on salaries in the course of the tax assessment procedure – at the earliest in 2010. Without a roll-up of the accounts by the employer an earlier refund cannot be granted.
Income taxpayers are granted a refund of possible excessive prepayments of income tax only after filing their tax return. For a reduction of the advance payments of income tax an application is obligatory which plausibly illustrates the forecast profits or the expected income from employment of the year 2009 and which therefore allows to deduce the expected income tax. An automatic adjustment is not envisaged.
