A Smooth Guide To Filing Tax Returns In Austria

If you live and work in Austria, you are likely liable to pay income tax and file a return. The Austrian government levies tax on residents' salaries, wages, and other forms of remuneration. The tax year in Austria lasts from 1 January to 31 December, and you can apply for a tax refund at the end of each tax year. Income tax returns can be filed with the local tax office, and the deadline for paper forms is 30 April of the following year, while the deadline for electronic filing is the end of June. You can file your tax return on paper or electronically via FinanzOnline, Austria's most popular e-government application.

Who needs to apply for a tax return in Austria?

In Austria, you are required to submit a tax return if you have unrestricted tax liability. This means that you are domiciled in Austria or that your usual place of residence is in Austria. If you live and work in Austria, you are likely liable to pay income tax and file a return.

If you have a permanent or temporary residence in Austria (defined as a place where the taxpayer lived for more than 6 months/183 days in a year), you are considered a resident for tax purposes and are required to pay income tax on your worldwide income. Foreign employees are considered fully tax-liable from arrival, provided they have a work or employment contract lasting at least six months. Seasonal workers, however, only need to pay income tax if their stay exceeds half a year.

If you are a freelancer or self-employed, you typically pay about 25% income tax if your income surpasses the tax-free threshold of €13,308. If your earnings exceed €30,000, you must also pay value-added tax (VAT). As a resident, if you are self-employed or receive income from multiple sources, you need to file an income tax return at the end of the tax year.

The Austrian Income Tax Act (Einkommensteuergesetz) stipulates seven types of earnings that are liable for taxation and splits them into two groups: business or profit income and non-business or receipts over expenditure income. The tax rate can be anywhere from 0% to 55% of taxable income, and the more you earn, the higher the rate of taxation.

What documents do you need to apply for a tax return?

If you are employed in Austria, you are most likely entitled to a tax refund. To apply for a tax return, you will need the following documents:

• Lohnzettel: This is the Austrian version of a taxable income statement, also known as Form L16 or L1. It is a document that summarises all your sources of income, tax levies, and tax advances. It is issued by your employer at the end of the tax year (31 December) and is used to calculate your tax liability and determine the amount of your tax refund.
• Proof of income: This includes payslips, which can be used if your employer does not provide a Lohnzettel. You can request copies of your payslips from your employer or access them through FinanzOnline.
• Other financial information: You will need to disclose your income and all other tax-related matters, including deductible special expenses and exceptional costs. If you are a trader, you may need to enclose your balance sheet and profit-and-loss account with your tax return.
• Confirmation of income from your home country: If you worked in Austria for only part of the year, the Austrian tax office will require Form L1, which your home country's tax office will need to confirm based on your filed tax return there.

It is important to note that the requirements and procedures for filing a tax return in Austria may vary depending on individual circumstances, such as employment status and residency. The Austrian tax system can be complex, and it is recommended to seek further guidance from official sources or tax professionals.

How do you apply for a tax return?

If you live and work in Austria, you are likely liable to pay income tax and file a return. The Austrian government levies tax on residents' salaries, wages, and other forms of remuneration, differentiating between income and wage tax. Salaried employees and pensioners pay wage tax, while self-employed workers pay income tax. The tax brackets are the same but differ in method of collection. Whether you pay income or wage tax, you will most likely have to file a return at the end of the tax year. The Austrian tax year lasts from 1 January to 31 December – the whole calendar year. You can apply for a tax refund at the end of each tax year.

Income tax returns can be filed with the local tax office after the end of each calendar year. Tax returns must be filed by 30 April of the following year (paper form) or the end of June of the following year (electronic filing). You can file tax returns for up to five years back.

In Austria, there is a 3-day protection period that applies to all taxes. After these three days, the tax office will impose a late filing penalty of 2% of the tax. If you submit your tax return late without a justifiable reason, a surcharge of up to 10% of the prescribed tax amount can be applied. You may qualify for a longer deadline if you are represented by a tax advisor.

You will need the following documents to file your tax return: a confirmation of taxable income (Lohnzettel) from each employer, and an L1i form if you have worked in Austria for less than six months. The L1i form is an attachment to the L1 form and serves as proof that you have no income in your home country and that your only source of income is from Austria. On the basis of this form, you will be considered an Austrian tax resident. You may also need to include your balance sheet and profit-and-loss account.

A tax return in Austria can be filed on paper or electronically. To file electronically, you can use the FinanzOnline portal. Registration with FinanzOnline is carried out in person with a tax office or by an accountant (tax advisor). You can also register using an ID Austria. You only need a mobile phone signature or ID Austria account to log in; there is no need to register.

When do you need to apply for a tax return?

In Austria, you are required to apply for a tax return if you are liable to pay income tax. This typically applies to those with unrestricted tax liability, such as Austrian residents or those whose primary residence is in Austria. If you are a salaried employee or pensioner, you are subject to wage tax (Lohnsteuer), while self-employed workers pay income tax (Einkommensteuer).

If you worked in Austria for only a portion of the year, it is essential to file a tax return in your home country. You will need to submit Form L1, which your home country's tax office will confirm based on your filed tax return. Additionally, if you have worked in Austria for less than six months, you will need to include the L1i form as an attachment to the L1 form. This form serves as proof that your only source of income during that time was from Austria, and it entitles you to be considered an Austrian tax resident, allowing you to benefit from the Austrian tax system's advantages.

The Austrian tax year lasts from January 1st to December 31st, and you can apply for a tax refund at the end of each tax year. The deadline for submitting tax returns is April 30th of the following year for paper forms and the end of June of the following year for electronic filing. It is important to note that submitting your tax return late without a valid reason can result in a surcharge of up to 10% of the prescribed tax amount.

You can file your tax return on paper or electronically. The FinanzOnline portal is Austria's most popular e-government application, allowing users to submit employee tax returns and receive official rulings electronically. To use FinanzOnline, you will need an ID Austria account or a mobile phone signature to log in. Alternatively, you can make an appointment at the Tax Office to set up an ID Austria account.

What are the consequences of a late application?

Late submission of tax returns in Austria can result in several consequences, including penalties and enforcement charges. Here are the detailed explanations:

Late-Filing Charge:

If you fail to submit your tax return by the deadline, the Austrian tax office can impose a late-filing charge. This charge is at the discretion of the tax authority but cannot exceed 10% of the assessed tax. It is important to note that there is a grace period of three days for all taxes in Austria, and delays of up to three days do not have any legal impact.

Late-Payment Charge:

If you submit your tax return late and owe taxes, you may also face a late-payment charge. This charge is typically applied when VAT or withholding taxes are levied in a tax audit. The late-payment charge is calculated as 2% of the tax due, increasing by an additional 1% every three months until it reaches a total interest of 4%.

Enforcement Charges:

The tax authorities may impose enforcement charges to compel taxpayers to file their tax returns. These charges can be significant, reaching up to €5,000.

Criminal Consequences:

In some cases, late or incorrect tax returns can lead to criminal tax evasion charges. This occurs when a deliberate breach of the obligation to disclose relevant information to the tax office results in a reduction in taxes.

Audit and Adjustments:

Submitting a tax return late may also increase the likelihood of an audit, which could result in adjustments to your tax liability. Negligent errors on your tax return could lead to additional taxes or fines, depending on the nature and extent of the mistakes.

It is important to note that you can request an extension for submitting your tax return if you have a valid reason, such as an illness or the assistance of a tax advisor. However, failing to meet the extended deadline can still result in the consequences mentioned above.

Frequently asked questions