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Austria: Tax plans of newly inaugurated government outlined

Austria: Tax plans of newly inaugurated government

Austria’s new government—consisting of the conservative Austrian people’s party (ÖVP) and the Austrian Green party, led by Chancellor Sebastian Kurz—was inaugurated today, 7 January 2020.

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The new government recently published its plans for governing, including its intentions in terms of taxation. Among the tax changes that could be proposed are the following:

  • A reduction of the rate of corporate income tax from 25% to 21% (the prior government had intended to reduce the corporate income tax rate to 23% in 2022 and then to 21% in 2023; the new government may pursue a different time schedule).
  • A focus on making taxation “more ecological”—for instance, increased taxes on airline tickets and gasoline.
  • A taxpayer right to request a tax audit.
  • Large businesses can already elect “horizontal monitoring” instead of “classical” tax audits. Under the government plan, small and medium size enterprises (SMEs) would be allowed to electronically transmit accounting data to allow for a digital audit, and in turn, this could possibly allow SMEs eventually to participate in horizontal monitoring.
  • Possible re-introduction of a proposal to provide a tax exemption for capital gains from investments held by individuals on a mid-term to long-term basis.
  • Possible reduction of income tax rates corresponding to the current 25% / 35% / 42% income tax brackets (Austrian income tax is imposed at progressive tax rates beginning at 0% and increasing to 25%, 35%, 42%, 48%, 50% or 55% depending on the income tax bracket).
     

KPMG observation

Tax professionals note that these possible measures currently only summarize what may be the government’s intentions, and any of these tax changes if introduced would be subject to the Austrian legislative process. Also, it has been observed that the government plan is a five-year plan, and some of the tax measures could be introduced at later stages during the five-year period.
 

For more information, contact a tax professional with the KPMG member firm in Austria:

Markus Vaishor | +43 1 31332-3652 | mvaishor@kpmg.at

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

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