Basic tax allowance (Austria)

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The basic allowance is in Austria sure that to cover the subsistence minimum necessary income is not reduced by taxes.

It is regulated in Section 10 of the Income Tax Act 1988 .

Private individuals

For private individuals, the basic tax allowance or the marginal tax rate is 0% for income components from 0 to 11,000 euros per year.

Sole proprietorship and shareholders

From the assessment year 2010, according to Section 10 of the Income Tax Act, natural persons (sole proprietorships, partners in partnerships) with business income can benefit from a profit allowance through which fictitious additional business expenses are also deductible. The profit-free amount is divided into the basic tax-free amount and the investment-related tax-free amount.

Basic allowance

According to Section 10 (1), lines 1 and 2 EStG, a basic tax allowance of 13% of the respective profit up to a maximum of 3,900 euros (that is 13% of 30,000 euros) per person and year can be claimed for a profit of up to 30,000 euros. The basic allowance is automatically taken into account when assessing income tax without proof of investment.

Investment-related allowance

If the profit exceeds 30,000 euros, an investment-related allowance of up to 580,000 euros can be claimed. The prerequisite for this is that appropriate investments in favored assets (useful life at least four years) and favored securities have been made in the financial year.

In any form of flat-rate business expenses, only the basic allowance is available.

See also