Taxes

How to file your income taxes in Austria in 2023

For expats living and working in Austria, find out if you’ll need to submit your income tax and how to do it, as well as the 2023 tax rates.

Income tax Austria
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By Alicia Walker

Updated 28-2-2024

When moving to Austria, there will be many daunting tasks hanging over your head. Taxes will definitely be on that list, especially if you are a freelancer or self-employed, or starting your own business. Depending on which country you come from, you might also want to read up on filing UK taxesCanadian taxes, or US taxes when you live abroad.

But before you begin tax hopping, this article will show you how to file your income taxes in Austria, and includes the following information:

Income tax in Austria

The income tax system in Austria

Income tax is called Einkommensteuer in Austria and there is a progressive rate of income tax (0–55%). The tax assessment base equals the sum of income minus income-related expenses and tax-free amounts for a calendar year. Along with social insurance contributions, income tax is automatically deducted from employees’ wages or salaries and sent to the tax authority by the employer.

Hands typing on a laptop keyboard

There are several expenses that are tax-deductible in Austria. Among them are children’s allowance, single parent’s allowance, flat-rate allowance for commuters, charges at Austrian hospitals, and professional expenses (e.g., business travel expenses).

Everyone living in Austria is legally responsible for paying an unlimited tax liability. On the other hand, non-residents who work in Austria will have to pay a limited tax liability.

Who pays income tax in Austria?

If you are a non-resident living in Austria, you will only have to pay a normal tax rate on the income you have earned since living there. However, once you become a resident, you will need to pay taxes on your global income.

Who is exempt from income tax in Austria?

In Austria, the tax-free bracket for those with low income is those who earn €11,693 and under. If your business is going through insolvency, however, you may apply for tax relief. Furthermore, foreign losses shall be deductible only to the extent of 75% of the total profit.

Taxpayers may apply for a full or partial deferral of due taxes in Austria if it is not possible to pay them due to financial duress. In these cases, the tax authorities may grant a temporary suspension of payments.

Earnings subject to income tax in Austria

Taxes on income and salary in Austria

Any income in Austria is subject to the income tax threshold (see further information below for capital gains tax on investments). This includes income from employment, trade, and craft sales. It also applies to income from rental properties.

Accountants making notes on a tax return in a office

Tax goes directly from deductions in your salary, made by our employer, to the tax office on your behalf. However, self-employed people will need to file and pay either online or through the assistance of an accountant. For a quick look at your tax position, this Austria Tax Calculator has been updated for the 2023–2024 tax year.

Taxes on employment benefits

Importantly, both employees and employers have to pay social insurance contributions in Austria. The exception to this is accident insurance, which only the employer needs to pay.

In 2022, the following rates applied:

InsuranceEmployer rateEmployee rateTotal rate
Accident insurance1.1%0%1.1%
Miscellaneous0.6%1%1.6%
Pension insurance12.55%10.25%22.8%
Sickness insurance3.78%3.87%7.65%
Unemployment insurance3%3%6%

Additionally, both employees and freelance workers pay 0.5% of their gross income as a Chamber of Labour (Arbeiterkammerumlage – PDF) contribution.

Taxes on savings and investments

In Austria, capital gains are incomes from investments. This includes income from dividends, derivatives, and capital gains from shares and bonds. This is taxable at a special rate of 27.5%, while a special rate of 25% applies only to income derived from saving accounts, bank deposits, and non-securitized other receivables from certain banks.

Generally, if individuals who are tax liable use an Austrian bank, a final withholding tax will be levied on the investment income. However, if no final withholding tax is levied, the investment income must be taxed at the same rate via the annual assessment of the taxpayer.

Lower rates may apply to dividends, and interest and royalty payments to non-residents with which Austria has a double tax convention.

Taxes on rental income

Typically, if you own property in Austria that you rent out, you will need to file a tax return on it. However, different municipalities have different tax requirements. In Vienna, for instance, you will need to open a tax account online. You can find out the exact amount of tax you will need to pay with the government’s local tax calculator.

How to file your tax return in Austria

Individuals with only one source of employment income, which is subject to wage tax, do not need to file income tax returns. As mentioned, the tax goes directly from deductions in your salary, made by your employer, to the tax office on your behalf. However, if you are freelancing in Austria, you will need to file your taxes yourself, rather than have an employee arrange this for you automatically.

Train pulling up at a station in Vienna

Conveniently, the entire tax process can be done online at FinanzOnline, the government tax office portal. You can register on the website and request a tax number. This includes e-signing online as well. Alternatively, if you prefer to go offline, you can fill out the forms at your local tax office and submit them in person.

Income tax deadlines in Austria

Tax submissions are due for all residents by 30 April, or by 30 June if you are filing them electronically. 

Income tax forms in Austria

If you prefer to not file your taxes online, you can download every form in PDF format from the Ministry of Finance website (in German) and submit them in person.

Income tax rates in Austria

In Austria, income tax is calculated at a proportional rate based on your annual income. Rates are subject to annual change, and at the moment, they vary between 20% and 55%. Typically, the self-employed rate is around 25%. Notably, there is no joint taxation of married couples or households in Austria.

The rates for 2023 are as follows:

Austrian income tax bandsAustrian tax rate
Up to €11,6930%
€11,694–19,13420%
€19,135–32,07530%
€32,076–62,08042%
€62,081–93,12048%
€93,121 to €1 million50%
Above €1 million55%

Currently, the second income tax band rate is 30%, after the Austrian government lowered this from 35% in July 2022.

As of July 2023, the third income tax bracket will also be reduced from 42% to 40%.

Personal tax allowance and deductions in Austria

Certain personal tax allowances are available against taxable income in Austria. However, this only applies if the annual income does not exceed €36,400. These allowances include:

  • Sickness, life, and accident insurance premiums
  • Voluntary employer pension contributions
  • Building a new house or renovating an existing space expenses
  • Family bonus plus tax credit that combines the childcare deduction and the child tax-free amounts
  • Single parent’s allowance
  • Flat-rate allowance for commuters
  • Professional expenses
  • Hospital charges
  • Charitable contributions to certain institutions
  • Church tax
  • Austrian tax adviser fees
  • A tax break for cars with a CO2 value of up to 95g/km and purely electric vehicles.

Self-employed income tax allowances in Austria

Unfortunately, when you are self-employed in Austria, you have to file your own taxes. You will have to pay freelance tax if you earn over the tax-free threshold of €11,693. Furthermore, if you make more than €35,000, you will have to pay VAT. Although Austrian tax is calculated on a progressive scale, freelance tax is typically about 25%.

Family walking through a forest using branches as walking sticks

Essentially, as a self-employed person, you get to deduct all expenses that in any way relate to your business. This includes things like transportation and travel expenses, anything relating to business communications, office supplies, and liability insurance. If you work at home, you can also offset your home office expenses.

After you log in to your FinanzOnline account, you will want to choose Eingaben (tax entries) and then Erklärungen (tax declarations).

Income tax in Austria for foreigners

You are officially a tax resident if you live in Austria and spend more than six months in the country. Beneficially, Austria has double taxation agreements with several countries worldwide including Australia, Canada, China, and the United Kingdom. These are in place to ensure that citizens and residents do not pay taxes twice on the same income. An exhaustive list of the countries with double taxation agreements is available on Austria’s Federal Ministry of Finance website.

Additionally, Austria has the Qualifying Recognized Overseas Pension Scheme (QROPS). This is an overseas pension scheme that allows you to transfer your UK pension rights. Essentially, it enables you to leave your remaining fund to your heirs without any deduction of UK tax upon death. For non-EU countries, there are several countries that Austria has social security agreements with. You can read up on portable retirement planning for more information on this.

Five retirees sharing a bench overlooking a lake in Salzkammergut, Austria
Salzkammergut, Austria

Austria is also a member of the Automatic Exchange of Information (AEOI) system and has agreements that allow the exchange of information between tax authorities of different countries to help stop tax avoidance and evasion. This information includes details about financial accounts and investments.

Tax refunds in Austria

Generally, if your income for the year did not exceed the income tax threshold, you will get a return for all your taxes. However, if your annual income did exceed the threshold, you are only eligible for a return on the income taxes that you overpaid.

Normally, returning taxes from Austria takes between three and six months. You can use services such as RT Tax that will review and process your tax returns for you up to the past five years. The charges depend on the returned tax sum.

In terms of a VAT refund, the process is very simple. Tax-Free Forms are submitted through eValidation online or in Terminals 1 and 3 of the airport where you can present your receipts. Generally, if you live in a non-EU country and are over the age of 18, you can get a refund on your VAT from shopping in Austria. However, the amount must exceed €75.

Tax fines in Austria

Filing your taxes on time is obviously important if you want to avoid penalties. If you fail to pay them on time in Austria, the late-payment charge is 2% of the amount of tax due.

If you have messed up your tax return to the point of gross negligence, you will generally be penalized with a monetary fine up the amount of the evaded tax. Usually, tax returns are subject to a plausibility check before an assessment is made.

Income tax advice in Austria

It is generally a good idea to seek income tax advice if you are working in Austria, particularly if you are self-employed. After all, it’s important to make sure that you don’t pay more than you need to, and that you claim back everything that you are eligible for.

Luckily, there are plenty of independent accountants in Austria who can help you save time and money on your taxes. To find tax consultants in your area, the Austrian Chamber of Tax Advisors and Auditors has a handy search portal that you can use. Alternatively, visit our Business Directory to find expat-friendly tax consultants.

Useful resources

  • Austrian Finance Ministry – a useful government website with information on all tax rules and legislation
  • Migration.gv.at – a government website that provides information on income and taxation in Austria
  • FinanzOnline – allows you to complete your Austrian tax return online
  • Tax Foundation – provides in-depth information about the tax system in Austria and its ranking in the OECD