In Austria, the income tax for individuals in 2005 was progressively set up to 50% on a four-
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-
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.
Nonresidents are taxed on their Austrian-
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
Taxable rental income is the excess of receipts over income-
Nonresidents suffer special penalties, the tax base of each nonresident individual being notionally increased by €8,000.
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.
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%.
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.