Friday, May 10, 2019
Austria's Chancellor, Sebastian Kurz, has announced plans for significant tax cuts for businesses and individuals.
Starting 2022, the corporate income tax rate will fall from 25 percent to 23 percent before being reduced to 21 percent in 2023.
Kurz also announced plans to lower personal income tax rates. In 2021, the lowest personal income tax rate of 25 percent will be cut to 20 percent. In 2022, the 35 percent rate will be cut to 30 percent, and the 42 percent rate will be reduced to 40 percent.
Kurz announced that the lion's share of the tax breaks will go to low-income earners through a reduction in social security contributions, and he hinted at new tax breaks for employer-provided bonuses of up to EUR3,000 a year.
These proposals add to those announced in January 2019. These included the introduction of a flat rate of taxation for small businesses, an increase in the VAT registration threshold, and the alignment of the VAT treatment of electronic and print publications. The Government is additionally consulting on the imposition, from 2020, of a five percent tax on income derived from the sale of digital advertising in Austria where the turnover of a firm exceeds EUR750m, and the domestic revenue arising from the sale of advertising exceeds EUR25m.