Austria Tax - Austria Bank Account

In Austria, the income tax for individuals in 2005 was progressively set up to 50% on a four-bracket progressive schedule: 21% (on taxable income from €3,640 to €7,270; 31% (€7,270 to €21,800); 41% (€21,800 to 50,870); and 50% above €51,000. Married people are taxed separately. Payroll withholding tax is in effect.
Taxes are levied on corporations (25% on distributed and undistributed profits), trade income, real estate, inheritance, dividends, gifts, and several miscellaneous services and properties. A value-added tax was introduced January 1, 1973 at a basic rate of 16%. The standard rate in 2005 was 20%. A reduced rate of 10% applied to basic foodstuffs, agricultural products, rents, tourism, and entertainment; banking transactions are exempt and exports are untaxed. There was also an augmented rate of 32% on automobiles, airplanes, and ships.

Capital gains and dividend income are taxed at 25% and are withheld at the source. There is no wealth tax. In accordance with EU guidelines, tax exemptions and reductions are included in incentive packages for investment in economically depressed and underdeveloped areas along Austria’s eastern border.

INDIVIDUAL TAXATION

Nonresidents are taxed on their Austrian-sourced income. Married couples are taxed separately.


INCOME TAX
Income is taxed at progressive rates.

INCOME TAX 2011
TAXABLE INCOME, €    MARGINAL TAX RATE
Up to €11,000   0%
€11,000 – €25,000   36.50% on band over €11,000
€25,000 – €60,000   43.21% on band over €25,000
Over €60,000   50% on all income over €60,000
Source: Global Property Guide
RENTAL INCOME
Taxable rental income is the excess of receipts over income-related expenses (werbungskoten). Expenses such as maintenance and repairs, depreciation, administrative expenses (including professional tax advice), interest payments and real estate tax are deductible.

Nonresidents suffer special penalties, the tax base of each nonresident individual being notionally increased by €8,000.


CAPITAL GAINS
Capital gains realized from the sale of real estate held for more than 10 years are exempt from taxation. But properties sold within 10 years of acquisition are taxable, except if the property has served as the owner’s primary residence for the past two years or if the owner have erected or have the building erected himself.

Taxable capital gains for properties sold within the 10 years retention period will be considered as speculative (exemption stated above) and will be charged at the same rates as income tax. The acquisition cost will be deducted from the selling price to arrive at the taxable amount.

PROPERTY TAXES

REAL ESTATE TAX

Property taxes in Austria are levied on the assessed value of real property, which is generally less than the prevailing market value. It is levied at a basic federal rate, multiplied by a municipal coefficient. The basic federal rate is generally 2% and the municipal coefficients range up to 500%.

CORPORATE TAXATION
INCOME TAX
The standard corporate income tax rate is 25%, which is levied on income and capital gains earned by companies. This rate applies to companies incorporated in Austria or foreign companies doing business in Austria.

Starting 2006, net rental income by nonresident individuals will also be taxed as business income at the tax rate of 25% if the property is part of his business abroad.