In this newsletter we would like to draw your attention to the most important points of the Austrian eco-social tax reform 2022 (ökosoziale Steuerreform 2022) and also briefly discuss the workplace allowance for self-employed persons (Arbeitsplatzpauschale für Selbstständige).
Reduction of wage and income tax
The wage tax and income tax will be reduced in two steps, with the 1st step taking place in 2022 and the 2nd step in 2023.
- 1st step as of July 1, 2022: reduction of the 2nd tariff level (income components over Euro 18.000 to Euro 31.000) from 35% to 30%.
- 2nd step as of July 1, 2023: reduction of the 3rd tariff level (income components over Euro 31.000 to Euro 60.000) from 42% to 40%.
Increase of Family-Bonus Plus
The Family-Bonus Plus for children up to the age of 18 will be increased from Euro 125 per month to Euro 167 per month from July 2022 (Euro 2.000 per year). For children over the age of 18 there will be an increase from Euro 42 per month to Euro 54 per month (Euro 650 per year).
Special expenses (Sonderausgaben)
Expenses on thermal-energetic renovation of buildings and expenses on replacing a fossil-fuel heating system with a climate-friendly heating system (e.g. solar use, district heating) will be deductible as special expenses. Deductibility is subject to a number of conditions, e.g. minimum expenses and a grant payout. The maximum amount of special expenses is Euro 4.000 for renovations and Euro 2.000 for replacing the heating system - spread over 5 years.
Increase of the limit for low-value assets (geringwertige Wirtschaftsgüter = GWG)
The amount limit for the immediate depreciation of low-value assets will be raised from the current Euro 800 to Euro 1.000. The increase will be applicable starting with 2023.
Increase in profit allowance (Gewinnfreibetrag)
The tax-free basic allowance of the profit allowance will be increased from 13% to 15%. The tax-free basic allowance (for which there is no investment requirement) is therefore up to Euro 4.500 for financial years beginning after December 31, 2021 (previously Euro 3.900).
Investment allowance (Investitionsfreibetrag)
As a measure to promote the economy an investment allowance for assets purchased or manufactured after December 31, 2022 will be deductible as an operating expense in addition to “normal” depreciation.
The investment allowance can (only) be claimed for depreciable fixed assets with a customary useful life of at least four years. Furthermore, the profit may not be determined by flat-rate calculation. The investment allowance is 10% of the acquisition or production costs of the assets.
For economic goods that can be assigned to the area of greening, it is entitled to 15%. The total investment allowance may only be claimed for acquisition or production costs of Euro 1,000.000 per financial year.
The investment allowance is not possible for:
- Low-value assets
- Assets with a special form of depreciation (e.g. buildings, motor vehicles – except for vehicles with 0 grams of CO2 emissions)
- Assets that are used to cover the investment-related profit allowance
- Immaterial assets unless they serve the areas of digitization, greening, health/life science
- Used assets
- Plants used to extract, transport or store fossil fuels, as well as plants that use fossil fuels directly
Corporate tax reduction
Corporate income tax will be reduced from the current 25% to 24% in 2023 and from 24% to 23% in 2024.
Taxation of Cryptocurrencies
As of March 1, 2022 income from cryptocurrencies acquired after February 28, 2021 will count as income from capital income and will be subject to the special tax rate of 27.5%. From March 1st, 2022 there is the possibility of a voluntary capital gains tax deduction. The obligation to deduct capital gains tax is planned from 2024.
Workplace allowance for self-employed persons (Arbeitsplatzpauschale für Selbstständige)
The flat-rate workplace allowance for self-employed persons is for expenses from the (partial) operational use of the apartment if no other room is available to carry out the operational activity.
The workplace allowance to be claimed as an operating expense distinguishes between “large” and “small” workplace allowances:
- A lump sum of Euro 1.200 per year is possible if any other income is only up to Euro 11.000 for which another room outside the home is available. Or any other income from active employment above Euro 11.000 is generated but no other room outside the apartment is available.
- A lump sum of Euro 300 per year is possible if other income of more than Euro 11.000 is achieved and another room outside the home is available for this. In addition expenses for ergonomic furniture are deductible up to a maximum of Euro 300 per year.
Vienna, March 2022