Income tax liability

The nationality of the person is not a material factor. Persons who have a domicile in Austria or for whom Austria is their usual place of residence have unlimited tax liability. Those who have a home in the Austrian federal territory that they have regularly used as such over a longer period of time have a domicile in Austria. The home does not need to be their main home but it does have to meet the personal requirements of a home.

Persons have their usual place of residence in Austria if, rather than merely staying there temporarily (e.g. for a holiday or for business travel), they clearly spend longer periods in the federal territory. After a stay in Austria of six months, unlimited tax liability applies in all cases – and on a retrospective basis.

If a person is subject to unlimited tax liability, then all of their income in Austria and abroad (worldwide income) is assessed for tax in Austria.

Persons employed in Austria or in receipt of income (e.g. a pension) in Austria, but who have no domicile or usual residence in Austria – regardless of their nationality – are subject to limited tax liability.

Employees with limited tax liability can apply for an assessment of income that is subject to wage tax, which makes it possible to offset certain expenses against tax. For those subject to limited tax liability, however, such an assessment adds the sum of 10,486 Euro to their tax base, which does not apply to those working under payroll accounting terms. The reason for this is that the tax-free minimum subsistence level is taken into account by the country of residence. Since the tax-free limit in Austria is 12,816 Euro, this means that those with limited tax liability have a remaining tax-free basic income of 2,330 Euro.

EU and EEA citizens who are not resident in Austria but whose main income is in Austria (that is, 90 percent of their income comes from Austria, or income from other countries amounts to no more than 12,816 Euro in total) can apply for unlimited tax liability. In such cases, despite the unlimited tax liability, only Austrian income is assessed for tax purposes and the full tax-free minimum subsistence level of 12,816 Euro is taken into account. Moreover, personal tax deductions and extraordinary burdens can be applied.

Tax liability in Austria can be reduced on the basis of double taxation agreements if, for example, the employee has a foreign employer and is working only short-term in Austria. The most important points about double taxation agreements can be found on the website of the Austrian Federal Ministry of Finance (BMF) (see further links).

Taxable income is made up of the sum of all individual incomes.

These may be divided into the following seven income types:

Trading income (income from profits)

• Income from agriculture and forestry (farmers, gardeners, forest managers etc.)
• Income from self-employment (in particular for professionals such as architects, lawyers, notaries, accountants, supervisory board members, as well as directors of a limited company who have a substantial shareholding (over 25 percent) in the company; if the shareholding is less than 25 percent the work is not from self-employment)
• Income from commercial trading (all other sustained independent activity that goes beyond the mere administration or letting of one’s own assets)

Non-trading income (surplus income)

• Income from work that is not from self-employment (e.g. as an official, worker or pensioner)
• Income from rentals and lettings (in particular property rental)
• Income from capital (e.g. savings accounts, securities – such income, however, is generally taxed on realisation under capital yields tax, in which case it does not have to be included in the tax return). For capital assets acquired since 1 January 2011 and disposed of since 1 April 2012, capital gains (e.g. surplus from the sale of shares) also fall into the scope of capital yields tax and are hence also taxed on realisation.
• Other income (e.g. certain annuities, profits from sales of private land (→ oesterreich.gv.at), speculative profits, income from incidental conveyancing and other activities, fees for office-holders)

Capital gains that do not fall within the seven types of income (e.g. gambling profits, lottery wins, gifts) are not subject to income tax.