Low-value assets: Increase of the limit to EUR 800
From 2020 (that is to say, for financial years that commenced after 31.12.2019), the limit for the immediate write-off of low-value assets from the fixed assets has been raised to EUR 800 (previously EUR 400).
Flat rate option for new small entrepreneurs
From 2020 the new flat-rate determination of taxable income can be applied by small entrepreneurs (with turnover of up to EUR 40,000), who calculate their profit by means of accounting on a cash basis and who obtain income from self-employment or trade (Exceptions: shareholding managing directors with shares of more than 25%, supervisory boards and foundation councils). The operating expenses are determined by the following percentages of the operating revenues:
- 45% in the case of trading and manufacturing companies
- 20% in the case of service providers
In addition, paid social security contributions can be offset.
Digital Services Tax
With effect from 1.1.2020 revenue from online advertising services rendered by internationally active online advertising providers is subject to a digital services tax in Austria at a rate of 5%. Those affected are companies that reach turnovers of at least EUR 750 million worldwide and at least EUR 25 million in Austria through the execution of online advertising services. In the case of international groups of companies, the turnover of the group is relevant.
Mandatory Disclosure for cross-border tax arrangements
Every marketable or tailor-made cross-border tax arrangement (i.e. measure) must be reported through the taxable person according to the EU Mandatory Disclosure Directive, if there is a risk of
- tax evading, or
- bypassing the reporting obligation of the mutual reporting standards legislation, or
- hindering the identification of the beneficial owner
and if there are certain characteristics (” hallmarks”) present. Infringement can result in severe penalties of up to EUR 50,000.
Special regulations for hybrid structures
The aim of the new regulation in the field of corporations is the neutralisation of certain international tax discrepancies, which are caused by
- tax deductions being made twice without a double entry of the related revenue occurring, or
- tax deductions being made, but the corresponding revenue not being taxed.
The neutralization of the tax discrepancy is achieved by
- negating the deductibility of expenditures, or
- still taxing the revenue in Austria which was not included under the “normal” regulation and/or which was tax free.
Changes to VAT in Austria
- Small enterprise regulation: The VAT exemption threshold has been raised from its previous EUR 30,000 to EUR 35,000 per calendar year.
- Input tax deduction for e-bikes: In addition to e-cars, from 1.1.2020 the input tax deduction can also be applied to electric motorcycles (CO2-value of 0) such as, for example, e-bikes.
- Tax rate on e-Books: From 1.1.2020 the reduced tax rate for electronic publications of books, newspapers, sheet music and cartographical products is 10%.
- Record-keeping and liability for online platforms and marketplaces: Entrepreneurs, who promote the supply of goods/services to private end users via an electronic platform, must keep records about the promoted sales and submit them to the Financial Authorities. Platforms that do not comply with this record-keeping obligation and/or that do not submit their records punctually are liable for the tax on the promoted revenue.
- Quick Fixes
- Consignment stock: The supplying of the consignment stock itself does not represent any intra-Community movement. Taxation occurs first as the point of withdrawal, which is basically why a supplier no longer has to register in the country of destination (provided certain conditions are fulfilled).
- Chain Transaction: EU-wide uniform regulation for the allocation of the delivery that is being moved in a chain transaction.
- Tax exemption in the case of intra-Community supplies: Additional material conditions are UID number of the customer and the correct summarised reports.
- Proof of intra-Community transportation: Stricter (harmonised) documentary evidence.
Preview of the tax reform in 2021: Planned tax changes
- Corporation tax is to be reduced from 25% to 21%.
- The first three stages of the income tax rate are likewise to be reduced
- from 25% to 20%
- from 35% to 30% and
- from 42% to 40%.
- Tax-free profit allowance: The basic tax-free amount is to be raised to EUR 100,000.
- A retention period for securities and fund products with the aim of tax exemption for currency gains is to be introduced.
- The threshold for low-value assets is to be increased again to EUR 1,000.
- The Family Bonus is to be raised to EUR 1,750 per child.
New: 12 Countries. 12 Tax Systems.
Are you up-to-date with the current taxation of the Central and South Eastern region? Find out more in our recently published Investing in CEE / SEE 2020 Collection