Income Tax Act 1988

Basic data
Title:	Income Tax Act 1988
Long title:	Federal law of July 7, 1988 on the taxation of the income of natural persons
Abbreviation:	Income Tax Act 1988
Previous title:	Income Tax Act ; Income Tax Act 1953; Income Tax Act 1967; Income Tax Act 1972
Type:	Federal law
Scope:	Republic of Austria
Legal matter:	Tax law
Reference:	BGBl. No. 400/1988
Date of law:	July 7, 1988
Last change:	Federal Law Gazette I No. 91/2019
Legal text:	as amended (ris.bka)
Please note the note on the applicable legal version !

The 1988 Income Tax Act in Austria regulates the tax levied on the income of natural persons , a joint federal levy. The tax revenue is divided between the federal, state and local governments ( financial equalization ).

history

With the Most patent on 31 December 1812 a transfer tax was introduced ( transfer tax patent of 1812), which according to professional groups and "classes" (although they were not precisely defined) a tax liability between two and up to 1,500 guilders envisaged annually. On October 29, 1849, RGBl 439/1849 set an income tax that was initially only to apply in 1850 ( income tax patent from 1849), but was also extended for the following years. This system was based on the English income tax . At that time the top tax rate was 10%. There was already a progressive tariff at that time , the tax exemption limit for employees was 600 guilders per year (corresponds to around 7 kg of silver, based on today's metal value, almost 3,000 euros). With the tax reform came the law on direct personal taxes ( Personal Tax Law of 1896, RGBl 222/1896 ).

Today's Austrian income tax law is historically based on the income tax law of the German Reich (RGBl. I 1934 pp. 1005-1018), the scope of which was expanded in 1938 through the annexation of Austria. After the Second World War, the law essentially been in force left ( right Reconciliation Act : State Law Gazette No. 6/1945.. , Output continued application of law : State Law Gazette No. 12/1945.. ) And in 1953 ( Income Tax Act 1953 - Income Tax Act 1953. BGBl. . 1/1954 ), 1967 ( Income Tax Act 1967 - EStG. 1967, Federal Law Gazette No. 268/1967 ), 1972 ( Income Tax Act 1972 - EStG 1972, Federal Law Gazette No. 440/1972 ) and revised in 1988. The currently valid version is the Income Tax Act 1988 , which was announced on July 7, 1988 ( Federal Law Gazette No. 400/1988 ), with numerous amendments.

An extensive reform came into force on January 1, 2016: The basic tax rate fell to 25% (over 11,000 euros), the other levels are 35% (over 18,000 euros), 42% (over 31,000 euros), 48% (over 60,000 euros), 50% (over 90,000 euros) and 55% (over 1 million euros). The capital gains tax rose to 27.5%. Only for investment income on cash deposits and non-securitized other receivables from credit institutions (excluding compensation payments and loan fees) is the investment income tax still 25%.

Systematic classification

Income tax (ESt) covers the income of natural persons and the person is the reference point; the income of a specific person is taxed. Therefore, the income tax is a personal or subject tax. The performance in the phase of income generation (asset growth) is recorded and therefore the income tax is an income tax . Since the tax payer and the carrier are identical, the income tax is a direct tax . In the case of persons with unlimited tax liability, a distinction is made between the following types of survey:

• Assessment : The basic type of assessment of the income tax is assessment of the annual income on the basis of a tax return.
• Income tax : tax deduction from wages
• Capital gains tax : Withholding tax on certain capital gains
• Real estate income tax: tax deduction from profit from property sales

Wage tax, capital gains tax and real estate income tax are therefore not independent taxes, but special forms of collection of income tax.

Basic principles

Performance principle

The income tax should be linked to the economic efficiency of the taxpayer. The non-taxation of the subsistence level and the consideration of extraordinary burdens are expressions of this principle.

Period principle

The annual income is decisive for the calculation of income tax. That is the income that was earned within a calendar year.

Net principle

Only that income should be taxed that remains after deduction of expenses that serve to generate income (objective net principle) or after deduction of the subsistence level (subjective net principle).

Progressive tax rate

Since a person's tax capacity increases disproportionately with increasing income, a progressive tax rate is applied in order to achieve an equal tax burden for everyone.

Types of income

In Austria, the income of a natural person is the sum of the individual income. These can only be paid in accordance with Austrian income tax law in accordance with Section 2 (3) EStG into the following seven types of income:

1. Income from agriculture and forestry
2. Income from self-employment
3. Business income
4. Income from employment (e.g. salaried employees, workers, retirees)
5. Income from capital assets (e.g. savings books, securities - however, this income is usually taxed with capital gains tax and then does not need to be included in the tax return)
6. Rental and leasing income
7. Other income (e.g. certain annuities, speculative profits, income from occasional referrals and other services, function fees)

All income that does not fall under these types of income is not taxable (e.g. finder's fee, lottery winnings, pain relief).

Assessment basis

Before taxation, the income from taxable income is deducted from income- related expenses (in particular social security and compulsory contributions to statutory interest groups) and allowances ( Section 16 EStG 1988 and Section 18 EStG 1988 ). This results in the wage or income tax base - only from this the following tax rates are calculated.

Tax rates

Income tax rate 2016 compared to 2009 in Austria

In income tax rates in Austria there are seven tariff zones (six tax brackets) and since 2016 the following apply marginal tax rates ( § 33, Section 1 of the Income Tax Act 1988th ):

Tariff zone	Annual income in euros	Marginal tax rate in%
1	for the first 11,000 euros	0%
2	over 11,000 euros to 18,000 euros	25%
3	over 18,000 euros to 31,000 euros	35%
4th	over 31,000 euros to 60,000 euros	42%
5	over 60,000 euros to 90,000 euros	48%
6th	over 90,000 euros to 1 million euros	50%
7th	over 1 million *	55%

* For parts of the income over 1 million euros, the tax rate according to Section 33 (1) EStG in the calendar years 2016 to 2020 55%.

The deductible amounts (according to § 33 Paragraph 4 to 6 EStG 1988 ) are to be deducted from the tax amount calculated .

The following marginal tax rates (three progression levels) applied from 2009 to 2015:

• 00 , 0000 % for income components from 00.000 to 11,000 euros per year
• 36.5 000 % for income components from 11,001 to 25,000 euros annually
• 43.2143% for income components from 25,001 to 60,000 euros annually
• 50 , 0000 % for parts of the income over 60,000 euros per year

From 2005 to 2008 the following marginal tax rates (three progression levels) applied:

• 00 , 000 % for income components from 00.000 to 10,000 euros per year
• 38.333% for income components of 10,001 to 25,000 euros annually
• 43.596% for income components from 25,001 to 51,000 euros annually
• 50 , 000 % for parts of the income over 51,000 euros per year

Tax deductions

The calculated tax amount will be reduced by the tax deductions due. While the special expenses and extraordinary burdens only reduce the tax base, the deductions always reduce the tax amount itself.

The following deductions have been in effect since 2016:

Tax deductions	amount	EStG
Traffic deduction	400 euros annually	Section 33 (5) no.1
Pensioner tax credit (basic amount with loop-in regulation )	400 euros annually	Section 33 (6) no.3
Sole earner tax credit with one child (Section 106a (1) EStG)	494 euros annually	Section 33 (4) no.1
Single earner tax credit with two children (Section 106a (1) EStG)	669 euros annually	Section 33 (4) no.1
Single-earner tax credit (for the third and each additional child (Section 106a (1) EStG))	it increases by 220 euros annually	Section 33 (4) no.1
Child tax credit	58.40 euros per month and child	Section 33 (3)
Alimony credit	29.20 to 58.40 euros per month and child	Section 33 (4) no.3
Commuter euro (if there is an entitlement to a commuter flat rate)	2 euros per km (one way between home and work)	Section 33 (5) no.4

The Family Bonus Plus can also be claimed from 2019.

→ Main article : Family Bonus Plus

Sixth of the year

→ Main article : Sixth of the year

The taxation of special payments (these are essentially Christmas and holiday pay as well as regularly recurring bonuses) is regulated in Section 67 of the Income Tax Act 1988. The first 620 euros a year are tax-free. In addition, special payments of up to one sixth of the annual income taxable income ( annual sixth ) are offset against fixed tax rates. 6% of taxes will be deducted for the part that goes beyond the exemption but does not exceed 24,380 euros. The next 25,000 euros will be taxed at 27%, of the next 33,333 euros 35.75% will be paid to the tax office. For termination benefits to which the employee is entitled, severance payments granted voluntarily or one-time bonuses are valid separate regulations.

Calculation of the individual tax amount

The taxable income (zvE) is initially assigned to a tariff zone. The tax amount (StB) can then be calculated in euros using the corresponding formula. Then the individual tax deductions have to be subtracted from the calculated tax amount. The marginal tax rate in the column on the right results from the corresponding key values ​​in the formula.

Income tax calculation valid from January 1st, 2016

Tariff zone income (zvE)	Calculation formula	Marginal tax rate
up to € 11,000	${\displaystyle StB=0}$	${\displaystyle 0\,\%}$
over 11,000 to 18,000 €	${\displaystyle StB={\frac {(zvE-11000)\cdot 1750}{7000}}}$	${\displaystyle 25\,\%={\frac {1750}{7000}}}$
over 18,000 to 31,000 €	${\displaystyle StB={\frac {(zvE-18000)\cdot 4550}{13000}}+1750}$	${\displaystyle 35\,\%={\frac {4550}{13000}}}$
over € 31,000 to € 60,000	${\displaystyle StB={\frac {(zvE-31000)\cdot 12180}{29000}}+6300}$	${\displaystyle 42\,\%={\frac {12180}{29000}}}$
over 60,000 to 90,000 €	${\displaystyle StB={\frac {(zvE-60000)\cdot 14400}{30000}}+18480}$	${\displaystyle 48\,\%={\frac {14400}{30000}}}$
over 90,000 to 1,000,000 €	${\displaystyle StB={\frac {(zvE-90000)\cdot 455000}{910000}}+32880}$	${\displaystyle 50\,\%={\frac {455000}{910000}}}$
over € 1,000,000	${\displaystyle StB=(zvE-1000000)\cdot 0{,}55+487880}$	${\displaystyle 55\,\%=0{,}55}$
Formula for calculating the individual tax amount in a worksheet =WENN(A1>1000000;(A1-1000000)*0,55+487880; WENN(A1>90000;(A1-90000)*455000/910000+32880; WENN(A1>60000;(A1-60000)*14400/30000+18480; WENN(A1>31000;(A1-31000)*12180/29000+6300; WENN(A1>18000;(A1-18000)*4550/13000+1750; WENN(A1>11000;(A1-11000)*1750/7000;0))))))

Earlier calculation formulas

From January 1, 2009 to December 31, 2015 , the following formulas applied: Zero zone: basic allowance Up to a zvE of € 11,000 there is no tax. Income tax table Austria from 2009 First stage: zvE over € 11,000 to € 25,000 ${\displaystyle StB={\frac {\mathrm {zvE} -11000}{14000}}\cdot 5110}$ The basic value at which the stage begins must be deducted from the ZVE, because the calculation only affects the ZVE part that goes beyond this. Here is the marginal tax rate applicable in the first stage. ${\displaystyle {\frac {5110}{14000}}=36{,}5\,\%}$ Second stage: zvE over € 25,000 to € 60,000 ${\displaystyle StB={\frac {\mathrm {zvE} -25000}{35000}}\cdot 15125+5110}$ Here is the marginal tax rate applicable in the second stage. ${\displaystyle {\frac {15125}{35000}}=43{,}2143\,\%}$ The number 5,110 corresponds to the tax amount of the first level, which is added to the amount of this level. Third stage: zvE over € 60,000 ${\displaystyle \mathrm {StB} =(\mathrm {zvE} -60000)\cdot 0{,}5+20235}$ The number 20,235 corresponds to the tax amount of the first two levels, which is added to the amount of the third level. Formula for calculating the individual tax amount in a worksheet =WENN(A1>60000;(A1-60000)*0,5+20235; WENN(A1>25000;(A1-25000)*15125/35000+5110; WENN(A1>11000;(A1-11000)*5110/14000;0))) After this calculation, the deductible amounts have to be subtracted!

particularities

Income from capital assets is subject to a special tax rate of 25% (in particular interest on cash deposits at banks) or 27.5% (e.g. dividends, realized capital gains) ( Section 27a (1) of the Income Tax Act 1988 ). As a rule, 25% or 27.5% of investment income is retained by the banks as withholding tax ( investment income tax ). This represents final taxation with a final withholding effect. Upon request, capital income can also be taxed at the tariff tax rate ("standard taxation option"). Foreign capital income without KESt deduction is also only taxable at 25% or 27.5%. Dividends are subject to under certain conditions clause procedure in which only half the tax rate is applied.

A special tax rate of 30% applies to income from private property sales (that is the difference between the sales proceeds and the acquisition costs of land, buildings and land rights) ( Section 30a (1) EStG 1988 ). The standard taxation option can also be used for income from private property sales.

In the course of the family law reform of 1973, individual taxation was introduced instead of the family taxation that had previously been in force. Tax support for families is provided through the single-earner tax credit of 494 euros per year for one child or 669 euros for two children. For each additional child, the amount increases by 220 euros. Single parents are entitled to a single parent tax credit of the same amount; the separated parent who is responsible for maintenance is entitled to a maintenance tax credit of 29.20 euros per month. In addition, a child tax credit of 58.40 euros per month is due per child, which is paid out together with the family allowance.

Travel costs between home and work place are usually not deductible for non-self-employed employees up to a distance of 20 km, but are taken into account for tax purposes by means of a flat-rate "transport deduction".

Donations to charitable organizations are deductible up to ten percent of the previous year's income. A list of organizations classified as non-profit is published annually by the Treasury.

See also

• Income Tax Act (Germany)

Web links

• Tax book of the Austrian Federal Ministry of Finance
• Calculation programs on the website of the Federal Ministry of Finance
• Federal Ministry of Finance: Tax deductions explained in detail
• Tax statistics from Statistics Austria
• HELP.gv.at: Definition of income
• Unternehmensserviceportal (USP): Income tax - information for beginners

literature

• Franz Labner, Marian Wakounig (editor): Income Tax , 5th edition, Vienna 2014, LexisNexis publishing house

Individual evidence

1. ↑ Johannes Warter: The legal historical development of the double taxation agreement. In: Juridicum Law Review Vol 1: 2 (2014), 2.1.2 2.2. Development up to the first double taxation agreement in 1899 , p. 118 ff (full article, p. 111–136, pdf , univie.ac.at).
2. ^ W. Doralt: Tax law 2007. Corporate taxes, traffic taxes, tax procedures. A systematic overview. 8th edition, Manz, Vienna 2006, margin no.1.
3. ^ Text of the EStG 1988 Austria
4. ^ Doralt / Ruppe :: Outline of Austrian Tax Law, Volume I , Vienna 2013, p. 294, RZ 722
5. ^ Doralt / Ruppe :: Outline of Austrian Tax Law, Volume I , Vienna 2013, pp. 17–18, RZ 18
6. ↑ Section 2 (3) of the Income Tax Act 1988
7. ↑ Information on HELP.gv.at
8. ↑ Federal Ministry of Finance: Tax tariff and tax deductions , accessed on March 24, 2016
9. ↑ § 67 EStG 1988
10. ↑ Tax Reform Act 2015/2016 - Explanations
11. ↑ See Section 33 (1) EStG 1988
12. ↑ Doris Kapeller, Dirk Raith: Texts on equality: theory, legal framework & political weight . 2003, p. 8 ( pdf ). pdf ( Memento of the original from July 13, 2011 in the Internet Archive ) Info: The archive link has been inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.  
13. ↑ § 33 EStG 1988 tax rates and tax deductions. Retrieved December 25, 2012 . 

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