Tax Rate Reduction in Detail

validity of tax rates	income brackets in €	marginal tax rates	number
tax rates until 31/12/2008	up to 10,000	no tax	2,540,000
	from 10,000 to 25,000	38.333%	2,580,000
	from 25,000 to 51,000	43.596%	1,145,000
	from 51,000	50.000%	270,000
new tax rates as from 1/1/2009	up to 11,000	no tax	2,700,000
	from 11,000 to 25,000	36.500%	2,400,000
	from 25,000 to 60,000	43.214%	1,235,000
	from 60,000	50.000%	200,000

The tax-free bracket for low income is raised from € 10,000 to € 11,000. As the tax credits remain unchanged, the actual obligation to pay income tax starts with the following annual income:

double earners
	14 gross salaries	assessment basis of current receipts	gross receipts/month
salaried employees	16,871 €	11,945 €	1,205.09 €
wage earners	16,897 €	11,945 €	1,206.96 €
public officials	17,091 €	11,945 €	1,220.80 €
retirees	14,944 €	12,096 €	1,067.43 €

 

sole earners (without a child)
	14 gross salaries	assessment basis of current receipts	gross receipts/month
salaried employees	18,478 €	12,942 €	1,319.83 €
wage earners	18,507 €	12,942 €	1,321.91 €
public officials	18,496 €	12,942 €	1,321.11 €
retirees	16,170 €	13,093 €	1,155.00 €

 

income after the consideration of the tax-free amount for profits as from 2010
	double earners	sole earners (without a child)
self-employed	12,713 €	13,859 €

Taxation of other receipts

In Sec 67 para 1 the amount which is relevant for the tax-free sixth part of the annual income has been increased from € 2,000 to € 2,100. The other receipts minus social insurance contributions and other contributions constitute the taxable base for calculating the tax exemption limit under the assessment or the roll-up procedure by the employer.

Effects of the tax rate reductions

Whereas in 2008 2.54 million people out of 6.535 million taxpayers did not pay any taxes on salaries/income, from 1 January 2009 2.7 million people no longer pay taxes on salaries/income.

How to receive your money?

The rate reductions become applicable retroactively as of 1 January 2009. The employer has to recalculate the wage tax as soon as possible after the Tax Reform 2009 comes into effect (presumably in April) but not later than 30 June 2009 provided that technical and organisational facilities are available and there exists an employment relationship with that employer. Technical and organisational facilities are considered to be available if payroll software is used. Therewith, you promptly get back the taxes which were retained on salaries on too high a level as from 1 January 2009.

If the employer is not in the position to roll up the accounts (change of the employer), your local tax office recalculates your taxes on salaries in the course of the tax assessment procedure – at the earliest in 2010. Without a roll-up of the accounts by the employer an earlier refund cannot be granted.

Income taxpayers are granted a refund of possible excessive prepayments of income tax only after filing their tax return. For a reduction of the advance payments of income tax an application is obligatory which plausibly illustrates the forecast profits or the expected income from employment of the year 2009 and which therefore allows to deduce the expected income tax. An automatic adjustment is not envisaged.

For calculating your actual amount of taxes saved please use the tax-comparison-calculator on our homepage https://www.bmf.gv.at/Steuern/Berechnungsprogramme/_start.htm.

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