What the Tax Reform 2015/16 entails

On 14 August 2015 the Tax Reform Act 2015/16 was published in the Federal Law Gazette. We would like to provide you with an overview on the major amendments:

Income Tax. The lowest progressive tax rate will decrease to 25% and the number of levels in the progressive rate will rise from three to six. A provision limited until the year 2020 will lead to income exceeding EUR 1m being taxed at 55%.

Income Tax rates
up to EUR 11,000 0%
above EUR 11,000 to EUR 18,000 25%
above EUR 18,000 to EUR 31,000 35%
above EUR 31,000 to EUR 60,000 42%
above EUR 60,000 to EUR 90,000 48%
above EUR 90,000 to EUR 1,000,000 50%
above EUR 1,000,000 55%

Learn more…

The employee tax credit will be part of the increased travelling tax credit of EUR 400.

The child tax exemption will be increased from EUR 220 to EUR 440 and in case both parents apply for the exemption the deduction for each of them will be increased from EUR 132 to EUR 300.

Regarding the tax assessment for employees, certain special expenses such as church taxes and donations
do not have to be included in the tax returns by the taxpayers; these expenses will be deducted automatically. Learn more…

Due to simplified forms it will be easier for small businesses to file their tax returns. Learn more…

The scope of tax exempt payments to employees will be extended. There will be, for example, an exemption from wage tax for employee discounts. Learn more…

Due to a lump sum for expenses there will be a tax relief for expatriatesLearn more…

There will be an unlimited loss carry forward for taxpayers who determine their income via cash basis accounting.

The R&D premium will be increased from 10% to 12%. Learn more…

The preferential treatment for scientists moving to Austria will be expanded by introducing a special tax deduction („Zuzugsfreibetrag“). Learn more…

The income tax rate for capital income (“KESt”) will be increased for certain sources of income from 25% to 27.5%. Interest will still be subject to a rate of 25%. Learn more…

Henceforth a tax exempt repayment of shareholder-contribution will be regarded as subordinated to a distribution of profits: As long as there are profits that have been generated by the company, these profits must be distributed; only afterwards a repayment of contributions is possible. Learn more…

A limitation on the deductibility of payments for construction services rendered to entrepreneurs has been created.

Remuneration of workers employed in the construction sector must not be paid or be accepted in cash. Learn more…

Contributions to certain insurance funds as well as expenses for construction and renovation of housing will only remain deductible until the year 2020.

The external and internal education credit as well as the external education premium will be abolished in 2016.

The treatment of private use of company cars will be adapted. There will be tax benefits for the acquisition of cars with low CO2-emissions and electric cars. Learn more…

Value Added Tax. The reduced VAT rates of 10% and 12% will be increased to 13% (Learn more…). This will, for example, be relevant for the hotel sector (Learn more…) as well as for cultural services (Learn more…).

For supplies as well as leases of real estate the provision on the market value will apply.

Businesses with annual sales exceeding EUR 15,000 must keep record of their sales by using electronic cash registers (ECR), if at least EUR 7,500 of their sales are made in cash. ECRs must be protected against manipulation with the help of technical security solutions. Learn more…

Moreover, entrepreneurs have a duty to issue receipts if they make sales in cash.

Entrepreneurs will be able to deduct input VAT on cars without CO2-emissions.

Real Estate. There will be major amendments regarding the taxation of real estate. Real estate gains tax will, for example, be increased from 25% to 30% and depreciation rates will be adapted.

Regarding real estate transfer tax, the tax base will no longer refer to the tax value („Einheitswert“) but to the land value („Grundstückswert“). Learn more…

Moreover, there will be amendments regarding real estate owning companies. The transfer/unification of at least 95% (instead of the current 100%) of the shares in a company holding Austrian real estate will trigger real estate transfer tax. Learn more…

Restructurings. Especially due to the restrictions regarding tax free repayments of contributions and the changes with regard to real estate transfer tax, amendments to the corporate restructuring taxes act had tob e made. Learn more…

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Robert Rzeszut

Robert Rzeszut

Partner | Deloitte Tax | Telefon: +43 1 537 00 6620 | E-Mail senden

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