Withholding tax

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A final withholding tax in the broader sense is a withholding tax through which the withholding tax is settled at the paying office and therefore makes a separate assessment of the service recipient with application of the individual tax rate superfluous. The best-known form are certain applications of capital gains tax , which, insofar as a final withholding effect occurs, is sometimes referred to synonymously as final withholding tax. Certain forms of collection for persons with limited tax liability (e.g. domestic income from foreign artists, athletes or supervisory boards) are designed as withholding taxes. Less common, albeit correct, is the designation of wage tax as a final withholding tax if an assessment (by filing an annual tax return) is not required.

Withholding tax in Germany

In Germany, the following tax items result in payment of income tax or corporation tax under certain conditions :

Withholding tax in Austria

In Austria, a withholding tax has been in effect on investment income since January 1, 1993 . The legal basis is the final taxation law . The original tax rate of 22% was raised to 25% in 1996. Exempt from the final withholding tax are certificates subject to corporate income tax. Speculative profits are taxable at a maximum rate of 25%, but at least at the individual tax rate. Price gains from investment funds that are held for more than twelve months are taxed at 5% (capital gains). So-called black investment funds are certain foreign funds for which at least 2.5% of the value held must be paid to the tax office at the end of the year, regardless of the previous price development.

At the request of the taxpayer, the capital income can be assessed for income tax . If taxation at the individual tax rate is more favorable than flat-rate taxation of 25%, the tax difference will be refunded.

With the final withholding tax, the inheritance tax was also settled in Austria until it was abolished (hence the term final taxation ).

Associated with the introduction of the final withholding tax was a tax amnesty for evaded taxes on capital income, provided the taxpayer disclosed this in the year of introduction. This amnesty led to the disclosure of extensive capital income.

The background to these regulations is the banking secrecy regulated in Section 38 of the Austrian Banking Act , which made it impossible for the tax authorities to obtain information about capital income. It was therefore assumed that before the withholding tax was introduced, only 5 to 10% of the income from capital assets was taxed.

Austria has lifted the speculation period since 2011. For (custody managed) purchases of shares with a purchase date from January 1, 2011 (and for purchases of other securities from March 2012) a 25% capital gains tax  (KESt) was due on price gains. The tax rate has been 27.5% since January 2016. As a prerequisite for increasing this KEST rate - which, due to a constitutional provision, may not exceed half of the maximum income tax rate - an additional “highest income tax class” of 55% was introduced. The KEST rate of 27.5% is subject to price gains on shares sold (which were purchased from January 1, 2011) and price gains on other securities (such as bonds, which were purchased from March 2012); In addition, dividends on stocks and interest on bonds are subject to 27.5 percent taxation, while the capital gains tax on interest on bank balances (savings account interest) is still 25%.

Exempt from capital gains taxation are “old taxable stocks” (shares acquired before January 1, 2011 and other securities acquired before March 2012), which were held for at least one year at the time of sale.

Withholding tax in Luxembourg

In Luxembourg , since 2006, Luxembourg taxpayers have been subject to a 15% withholding tax on interest income, for example on savings accounts, fixed-term deposits, interest payments on bonds and call money. For EU citizens residing outside Luxembourg who receive interest income from Luxembourg, a withholding tax rate of 20% applies until June 30, 2011, and 35% from July 1, 2011 under the European directive on the taxation of interest income from savings. However, the EU citizens concerned can also opt for the exchange of information between their Luxembourg financial institution and their competent tax authority.

Exchange rate gains are not taxed in Luxembourg after a holding period of six months.

European comparison of withholding taxes on investment income

The majority of European countries have already introduced withholding tax systems, but the assessment basis differs from country to country. In some countries, the burden on the exchange rate gains is degressively dependent on the holding period (after a holding period they are no longer subject to tax in some countries), in others, interest income or dividends are charged with a different (possibly progressive) income tax. The tax rate is partly dependent on the type of income (interest, dividends, capital gains ).

Tax rates in percent for withholding taxes in selected countries (as of 2005)
country interest Dividends Price gains Art
Belgium 15th 25th 0 (33) Withholding tax without capital gains and with options, speculation period six months
Denmark 0 28 28 (up to 59) Withholding tax with option; Speculation period 36 months
Germany 26.4 ... 27.8 26.4 ... 27.8 26.4 ... 27.8 25% (plus solidarity surcharge , possibly offsetting church tax ); Option for income tax assessment. In the case of interest, no tax deduction for tax non-residents (resident abroad)
Finland 28 28 17 (28) Definitive withholding tax for interest, capital gains tax drops over ten years
Greece 10 0 0 Definitive withholding tax for interest
Ireland 25th 20th 25th Definitive withholding tax, exceptions for private equity
Italy 26th 26th 26th Definitive final withholding tax
Lithuania 0 15th 0 Definitive withholding tax for dividends
Luxembourg 10 10 0 (40) Definitive final withholding tax, speculation period six months
Malta 15th 0 0 Withholding tax with the option of income tax assessment for interest
Austria 25th 25th 25th Withholding tax with the option to assess income tax
Poland 19th 19th 19th Definitive final withholding tax
Portugal 20th 28 (as of 2016) 28 (as of 2016) Flat rate withholding tax with the option of income tax assessment (as of 2016);
Sweden 30th 30th 30th Definitive final withholding tax
Switzerland 35 35 0 Withholding tax (will be fully refunded)
Spain 18th 18th 18 (up to 43) Speculation period 1 year: within the period up to 43% (depending on total income), after the period has expired 18%
Czech Republic 15th 15th 0 Definitive withholding tax without price gains

As of 2005

Web links

Wiktionary: Flat rate withholding tax  - explanations of meanings, word origins, synonyms, translations

Individual evidence

  1. jusline.at
  2. § 1 (5) Final Taxation Act
  3. Section II Final Taxation Act
  4. Press release of the Austrian Parliament, parliament correspondence / 05/23. April 2003 / No. 219
  5. ^ Taxation of Corporate Profits, Dividends and Capital Gains in Europe. (PDF) EVCA, archived from the original on March 16, 2006 ; Retrieved July 3, 2010 .