Persons resident in Austria

Persons resident in Austria are subject to unlimited taxation of their entire income. Annual income tax amounts to:

Self-Employed Work (Definition)

An income tax on self-employed individuals will be assessed (annual assessment with quarterly advance payments). The self-employed person has to file a mandatory income tax return at the end of the year when:

  • the revenue office requests such a tax return
  • the income generated from self-employed work within a calendar year exceeds € 8,887.00 minus possible operational expenses or
  • the self-employed person has generated additional income from one or more non-self-employed activities in the same calendar year and the income to be assessed exceeds € 10,000.00.

In addition, the self-employed person is personally responsible for registration with and payment of social security (government health insurance plan and retirement fund) (see paragraph 4.1.4.). Only in case of a “freelance contract” (see paragraph 4.1.4.), the contractor has to collect and pay social security premiums on behalf of the contracted party.

Non-Self-Employed Work (Employee) Definition

Wages and salaries are subject to Austrian income taxation, levied in the form of a tax deduction (“wages tax”) at the source from the employer (social security see paragraph 4).

Employers who are neither residents of Austria nor maintain a place of business operation in Austria are not subject to mandatory wages taxation. A place of business operation (office, permanent establishment) is recognized as such when it is sustained for longer than one month. The term “place of business operation” is, in this context, a broad description, i.e.: a place with the sole purpose of paying wages can be recognized as a place of business operation, a hotel room can be classified as an office.

The employee needs to have a mandatory tax assessment when:

a) the revenue office demands an assessment or
b) the wages tax is not deducted at the source (from the employer) or
c) other income (i.e. from self-employed work) over € 730.00 per calendar year was generated or
d) two or more incomes were generated within a calendar year which fall under the mandatory wages tax.

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