The income of all individuals living or permanently residing in Austria is subject to unlimited taxation. It appears that in Austria the income tax is levied on all the income earned within and beyond the country. The liability to pay taxes also arises in respect of income received in the territory of Austria by individuals who do not have permanent residence in this country.
The calculation of the income tax in Austria takes place after filling in and submission of the income declaration to the tax authority.
Income of legal entities in Austria is subject to corporation tax. The limited liability companies, joint-stock companies, as well as private funds are primarily considered as the entities.
A legal person is solely accountable to the tax authority. Therefore, corporation tax is charged regardless of the taxes accrued for founders. In respect of the founders or shareholders the tax charge is performed at the stage of payment of dividends.
The corporate tax in Austria is now 25%. It is charged based on the results of the annual balance sheet of the legal entity.
Value Added Tax (VAT)
The standard VAT rate in Austria is 20%. In some categories of goods and services in Austria a reduced VAT rate is allowed. The value-added tax is a pass position for the entrepreneur and is paid by the end user. Entrepreneur provides VAT reports to tax authorities mainly on a monthly basis. However, the practice of quarterly VAT reporting is widely accepted too.