Thursday, February 6, 2020
The Austrian Ministry of Finance has announced its decision to proceed with personal income tax cuts.
According to a presentation by Finance Minister Gernot Blumel on January 30, 2020, the first three personal income tax brackets will be reduced from 25, 35 and 42 percent, to 20, 30, and 40 percent, respectively. The changes are set to become effective from 2021.
The measure has been included as part of the program for government agreed between the Austrian People's Party and the Green Party.
Also on January 30, Chancellor Alexander Kurz announced at a separate press conference that the Government will proceed with its environmental tax agenda, intended to help reduce carbon emissions from the transport and industrial sectors.
The coalition agreement includes measures to encourage the purchase of non-CO2 emitting vehicles, as well as changes to the flight ticket tax which will see the introduction of flat levy of EUR12 (USD13.26) per flight, irrespective of distance. Currently, flights are taxed at EUR3.50 to EUR17.50, depending on destination.
The coalition agreement also provides the Government with the option of introducing a specific tax on carbon emissions, or hiking existing environmental levies.