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Austria: Tax reform legislation 2019-2020, proposals in draft bill

Austria: Tax reform legislation 2019-2020

The Austrian Ministry of Finance published a draft bill regarding tax reform for 2019-2020.


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Among the measures being proposed are the following:

  • Implementation of anti-hybrid provisions pursuant to the EU directive (ATAD 2) into Austrian domestic tax law
  • Provisions allowing small businesses to calculate their income tax on a lump-sum basis
  • Other tax reform measures expected to be introduced include:
  • Phased-in reduction of the corporate income tax rate from 25% to 23% as from 2022 and 21% as from 2023
  • Reduction of progressive income tax rates
  • Extension of research and development (R&D) premiums
  • Repeal of stamp tax (duties) on other-than non-residential rentals

In addition, there would be proposals also to amend the value added tax (VAT) rules allowing for "quick fixes," allowing for adjustments to the small business exemption, introducing reduced VAT rates for electronic printing units, and concerning the input VAT deduction for electric cycles.

Read a May 2019 report [PDF 352 KB] prepared by the KPMG member firm in Austria

Other topics discussed in this KPMG report include:

  • A draft bill to introduce a "digital tax" on online advertising services
  • A digital tax package proposal concerning the "sharing economy" and online remote sales
  • Draft measures introducing a tax withholding requirement for wages paid by employers having no permanent establishment in Austria
  • Court decisions concerning "loss-trafficking rules,” a participation attributable to a foreign permanent establishment qualifying for the international participation exemption, VAT on rental agreements, and the VAT exemption for education services

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