Austria - Tax Guide for Freelance Contractors

Tax Residents in Austria:           are liable to pay Austrian tax on their worldwide income,
Non tax residents in Austria:     are liable to pay tax on Austrian-source income only.

Individuals will be regarded as tax residents:

• if their habitual abode (deemed if they stay for longer than 6 months) or their domicile (i.e. they permanently occupy   a residence) in Austria.

Married persons file tax returns separately.

Taxable income includes:

• employment income including all remuneration  in cash or in kind,
• benefits in kind.

Certain deductions are permissible including:

• employee social security contributions,
• expenses incurred in acquiring, securing and maintaining income,
• lump sum deduction for travel expenses if journey to work exceeds 20 km,
• lump sum deduction for special expenses like interest payments, life insurance premiums and newly issued shares in resident companies under certain conditions,
• moving costs if seconded by the employer.

Allowances and tax credits for 2010 include:

• employment tax credit of EUR 54 per year and traffic tax credit of EUR 291,
• head of household tax credit of EUR 364 per year if spouse does not earn more than EUR 2’200; the limit is   increased if the couple has children,
• tax credit of EUR 700 per child per year, also applies to families who are exempt from taxes,
• child allowance of EUR 220 per child per year, reducing the tax base, but only applicable to taxpaying families,
• allowance for external child care costs up to EUR 2’300, applicable to taxpaying families.

Income tax rates for 2010:

• 36.50% from EUR 11’000 up to EUR 25’000,
• 43.20% from EUR 25’000 up to EUR 60’000,
• 50.00% on the excess.