Investing in Austria 2021

 

What investors & companies need to know!

What tax changes will 2021 bring in Austria? What should investors pay attention to in the future – and which decisions will benefit them? TPA’s experts have summarized the most significant tax news for Austria for you. The beginning of 2021 has seen changes mainly in connection with COVID-19. Please see below for the overview of the most important changes: Austria Tax News 2021!

COVID-19 measures

Various measures were introduced to help Austrian companies deal with the coronavirus crisis. These measures include:

  • VAT reductions (see below)
  • Tax deferments, subsidies/grants (e.g. grant for fixed costs, compensation for lost turnover)
  • Loss carryback: Possibility to carry back losses that cannot be offset in 2020 to the 2019 tax year (max. EUR 5 million) or, under certain conditions, to the 2018 tax year (max. EUR 2 million).

Degressive depreciation as well as accelerated depreciation for buildings:

  • Certain economic assets (excluding buildings, cars, etc.) acquired or constructed after 30 June 2020 using the declining balance method instead of the straight-line method.
  • Accelerated depreciation is possible for buildings acquired or constructed after 30 June 2020. The rate of depreciation is max. three times the amount in the 1st year, max. two times the amount in the 2nd year, followed by the normal rate of depreciation in subsequent years; no half-year depreciation rule.

Collective allowance for doubtful accounts and collective provisions

For financial years beginning after 31 December 2020, collective allowances for doubtful accounts and collective provisions for uncertain liabilities (recognised for tax purposes).

Changes to the flat rate applicable to small businesses

As of 1 January 2021, the flat rate applicable to small businesses was brought in line with the small business regulation for VAT with regard to the scope of application (turnover limit: EUR 35,000 net).

EU interest limitation rule in force since 1 January 2021

The interest limitation rule was transposed into national law as of 1 January 2021. Surplus interest payments are now generally only tax deductible up to 30 % of EBITDA. An allowance of EUR 3 million per tax year applies.

What is new in value-added tax

Tax reductions in connection with COVID-19 measures ƒ

  • 5 % VAT (at present limited until 31 December 2021) for restaurant sales, hotel services, print media and e-publications (except newspapers), works of art and turnover from activities as an artist as well as admission tickets (e.g. theatres, museums, zoos) ƒ
  • 10 % VAT from 1 January 2021 onwards also for certain repair services and feminine hygiene articles ƒ
  • Temporary tax exemptions for items such as protective masks and COVID-19 in vitro diagnostic medical devices and COVID-19 vaccines

E-commerce package of measures

Registration in the country of destination will no longer be required from 1 July 2021 for the following services because turnover can be declared collectively via the One-Stop-Shop (OSS) in a Member State of the EU: ƒ

  • B2C services ƒ
  • Mail order: Delivery threshold removed (exceptions for microentrepreneurs) ƒ
  • Imports: Tax exemption for importing goods < EUR 22 removed; import One-Stop-Shop (IOSS) applicable for goods imported by mail order < EUR 150 ƒ
  • Platforms: Certain platforms are treated as if they had supplied the goods themselves; platform may become liable to pay tax

As of 15 January 2021, entrepreneurs from third countries will no longer be entitled to input tax refunds for fuels.

Other tax changes in Austria

  • The rates for the standard fuel consumption tax (NoVA) will be increased and the obligation to pay NoVA extended to small trucks and pick-ups from 1 July 2021.
  • The new law on working from home creates new opportunities for employees to claim income-related expenses.
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