Inheritance tax in Austria

from Wikipedia, the free encyclopedia

In Austria , inheritance and gift taxes have not been levied since August 1, 2008 .

However, property inheritance and gifts are subject to a real estate transfer tax , which is why the public still speaks of “inheritance tax” in Austria. With the 2015/2016 tax reform, the real estate transfer tax, which applies to both paid and unpaid property transfers in the real estate sector, was increased significantly.

History of inheritance taxes in Austria

For the early development see history of inheritance tax

Inheritance and Gift Tax Act 1955

Basic data
Title: Inheritance and Gift Tax Act 1955
Long title: Federal law of June 30, 1955, on the levying of inheritance and gift tax
Abbreviation: Inheritance Tax 1955
Type: Federal law
Scope: Republic of Austria
Legal matter: Tax law
Reference: Federal Law Gazette No. 141/1955
Legal text: as amended (ris.bka)
Please note the note on the applicable legal version !

The tax according to the Inheritance and Gift Tax Act 1955 (ErbStG 1955) was a federal levy shared between the federal government and the federal states, which was incurred both on acquisition due to death and on gifts to the living. Their amount was based on the tax class of the purchaser resulting from the relationship to the testator / donor and the amount of the donation using a progressive tax rate related to this. The tax rate in tax class 1 (spouses, children) was between 2% and 15%, in the highest tax class 5 (distant relatives and third parties) between 14% and 60% (Section 8 ErbStG 1955). In addition to minor tax exemptions (110 to 2,200 euros, spouse's allowance for donations 7,300 euros), there were a number of other tax exemptions. With regard to the special design of the capital gains tax and the final tax on inheritance, the acquisitions subject to capital gains tax were exempt from inheritance tax (cf. § 15 para. 1 no. 17 ErbStG 1955). Such an exemption was only available for a limited period of time for gift tax, namely in connection with savings book donations and the associated de-anonymization of savings books (cf. Section 15 (1) No. 19 ErbStG 1955).

The Inheritance and Gift Tax Act 1955 is still relevant for old cases, i.e. inheritance cases that took place up until July 31, 2008.

Abolition of inheritance and gift taxes in 2007

With its decisions of March 7, 2007, the Austrian Constitutional Court declared the inheritance tax regulations of the Inheritance and Gift Tax Act and of June 15, 2007 also the gift tax regulations to be unconstitutional and repealed them with effect from August 1, 2008, because the valuation regulations for land contravene had violated the principle of equality. The legislature has refrained from using the period granted to it to improve the law, whereby the inheritance and gift tax has expired, but with regard to this it has adapted some laws such as the Land Transfer Tax Act or the Federal Fiscal Code (§ 121a BAO) and the Foundation Income Tax Act newly introduced. The revenue from this tax was comparatively low at around 110 to 150 million euros annually. The effort to collect them is said to have been very high. Around 130 tax officials spent around a quarter of their working hours doing this. The Austrian inheritance and gift tax is undoubtedly one of the so-called small taxes . The argument that the collection is too expensive compared to the volume is not shared by everyone in view of the actual yield. In the political controversy, both the SPÖ and the Greens have occasionally criticized that with the abolition or expiry of inheritance and gift tax - apart from property tax and capital gains tax - a taxation of wealth is practical in Austria does not take place and this would penalize other income such as earned income.

Differentiation between heirs and donors

In terms of the law, acquisition due to death (Section 2 ErbStG) includes:

  1. the acquisition by inheritance , by legacy or on the basis of an asserted claim to a compulsory portion ;
  2. acquisition by gift in the event of death , as well as any other acquisition to which the provisions of civil law applicable to legacies apply ;
  3. the acquisition of pecuniary advantages, which is made directly by a third party with the death of the testator on the basis of a contract concluded by the testator.

The testator is also deemed to have turned to (§ 2 Paragraph 2)

  1. the transfer of assets to a foundation ordered by the testator ;
  2. what someone as a result of execution of an ordered by the deceased pad acquires or due to fulfillment of a condition set by the deceased, except that a uniform purpose grant exists;
  3. What someone can achieve by ordering benefits to other people when approving a donation from the testator or voluntarily assuming this to obtain approval;
  4. what is granted as compensation for a waiver of the compulsory portion that has arisen or for the rejection of an inheritance or legacy from a third party;
  5. what is granted as payment for the transfer of the entitlement to a subsequent heir .

The expiry of annuities and other burdens that depend on a person's life is not deemed to be an acquisition due to death (Section 2 (3)).

As a gift within the meaning of the law (Section 3 ErbStG):

  1. any donation within the meaning of civil law;
  2. any other generous donation among the living, insofar as the thought is enriched by it at the expense of the donor;
  3. what is obtained as a result of the fulfillment of a condition ordered by the gift giver or as a result of the fulfillment of a condition attached to a legal transaction between the living without corresponding consideration, unless there is a uniform purpose grant;
  4. What someone can achieve by ordering services to other people when a donation is approved or voluntarily given over to obtain approval;
  5. what is granted as compensation for a waiver of inheritance (§ 551 ABGB);
  6. what a previous heir gives to the subsequent heir with regard to the arranged subsequent inheritance before their entry;
  7. the transfer of assets on the basis of a foundation business among the living;
  8. what is acquired when a foundation is dissolved.

The previous heir is the testator (deceased), the subsequent heir is the recipient of an inheritance (personentitled to inheritance).

Related regulations on the taxation of the transfer of assets free of charge

Extension of the real estate transfer tax

With regard to the free acquisition (such as by inheritance or donation) of land, i.e. real estate , a land acquisition tax must be paid in accordance with Section 1 and Section 3 (1 ) (2 ) of the 1987 Land Acquisition Tax Act (GrEStG 1987) .

The assessment was based on three times the standard value - in the same amount as the previously additional real estate transfer tax equivalent of the abolished taxes - if the property was retained by parents, children and the spouse, it was 2%, otherwise it was 3.5% of the assessment base .

Since January 1, 2016, the property value (market value) has always been used as a basis for assessment. The tax rate is 0.5% for the first 250,000 euros, 2% for the next 150,000 euros, and 3.5% beyond that. The market value is significantly higher than the unit value - which had not previously been increased for many years. It is generally determined from three times the land value and the building value, from a property price index, or in individual cases by an expert.

Notification requirement for gifts

For gifts among the living, there is  an obligation to notify in accordance with Section 121a of the Federal Tax Code (BAO) for the donation of cash, capital claims, shares in companies, businesses or sub-businesses and movable physical property. According to this, there is no obligation to notify real estate, but donations must be reported in accordance with the Land Transfer Tax Act. The obligation to notify is not subject to free acquisitions of up to 15,000 euros, whereby the gifts made by the same person within five years, calculated from the last gift, are added together. In the case of gifts between relatives, this exemption limit increases to 50,000 euros and the period for adding up is reduced to one year. Close relatives are first and second degree relatives (parents and siblings as well as their descendants, parents and forefathers, as well as the respective persons by marriage, the spouse and the partner). The obligation to notify does not apply to occasional gifts, nor to gifts exempt from the tax at that time under the old Inheritance and Gift Tax Act 1955. In addition to the donor and purchaser, lawyers and notaries involved in the legal process are obliged to report. The notification must be made within three months.

Foundation entry tax

Free donations to foundations under private law are still subject to a tax, now the foundation input tax . It arises if the donor has his or her place of residence or habitual abode or the foundation has its seat or the location of its management in Austria. The tax rate is usually 2.5%, in exceptional cases 25%.

International right

In order to avoid double taxation in the area of ​​inheritance and gift tax, Austria had concluded various double taxation agreements that continue to apply with regard to a tax liability in the other treaty state, for example with France , the Netherlands , the Czech Republic and the USA and only with regard to inheritance tax with Liechtenstein , of Switzerland and Hungary .

As a result of the abolition of the Austrian inheritance tax, the German federal government terminated the double taxation agreement between Germany and Austria dated October 4, 1954, from which time German inheritance tax law came into force .

The EU inheritance law regulation  (650/2012) has been in effect since August 17, 2015 , according to which the principle of residence replaces nationality in inheritance cases throughout the EU - with the exception of the United Kingdom, Ireland and Denmark, i.e. it is the right of place of residence and nationality is no longer relevant. It replaces a number of double taxation agreements.

See also

Web links

Individual evidence

  1. ↑ help.gv.at - official official for Austria: real estate transfer tax . help.gv.at, accessed on May 7, 2011.
  2. ↑ VfGH 03/08/2007, G 54/06 among others: Inheritance tax in its current form is unconstitutional. Retrieved March 29, 2020 .
  3. ↑ a b Tax reform 2015/2016: Changes to the real estate transfer tax. help.gv.at, accessed January 30, 2016.
  4. ↑ Inheritance tax and gift tax, Austria. 50plus.at, accessed January 30, 2016.
  5. ↑ BMF: Information on the expiry of inheritance and gift taxes (findok, 2008).
  6. ↑ Foundation Income Tax Act (StiftEG) , ris.bka .
  7. ↑ International Tax Law , page of the Austrian Ministry of Finance, loaded January 13, 2010, under: List of Austrian double taxation agreements in the field of inheritance and gift taxes .
  8. ↑ That changes now with inheritances. Christine Klafl in: Kurier online, June 27, 2015.