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Vienna, 30.04.2019 Tax Reform to Relieve Burden on Companies by More Than € 1.5 Billion

The Federal Government is thus promoting the expansion of employment, setting investment incentives and, above all, strengthening SMEs

Vienna (OTS) – With “Relieving Austria,” the Federal Government is releasing more than € 1.5 bn to make Austria a more attractive business location. In this way it promotes growth and investment, strengthens the equity base of domestic companies, and supports the expansion of employment.

The core element here is the reduction of corporate income tax. While nominal corporate income tax rates have been reduced in almost all neighbouring countries in recent years, the current corporate income tax rate of 25% in Austria dates back to 2005. In order not to lose attractiveness in international competition, the Federal Government is therefore reducing corporate income tax by 2 percent in 2022, from 25 percent to 23 percent, and by a further 2 percent to 21 percent in 2023. This will result in relief by around € 800 m for Austrian companies from 2022 and by € 1.6 bn per year from 2023 on.

In addition, numerous other measures will be taken to make the business location more attractive. For example, the basic tax allowance, which lowers the tax assessment base for companies paying income tax, will be increased to € 100,000 (relief: € 100 m). Similarly, the limit for low-value assets will be increased from € 400 to € 800 in 2020 and to € 1,000 in 2021, thus facilitating immediate depreciation (relief: € 300 m). “Relieving Austria” will also include preferential treatment for employee profit-sharing totalling a maximum of 10 percent of the profit and up to € 3,000 per employee and year (relief: € 100 m). The small-business limit, i.e. the turnover limit above which VAT is payable, will also be increased from the current € 30,000 to € 35,000. In addition, in the future there will also be a simple flat-rate option for these companies in the field of income tax (relief: € 75 m). Last but not least, the research premium is going to be increased, with individual entrepreneurs and shareholders of partnerships benefiting most.

Finance Minister Hartwig Löger said: “With ‘Relieving Austria’, we as the Federal Government of Austria are promoting the expansion of employment and creating incentives to invest in Austria. We are thus strengthening growth and ensuring that Austria becomes even more attractive in international competition.”

Finance State Secretary Hubert Fuchs said: “With our measures to make the business location more attractive, we are strengthening our small and medium-sized enterprises in particular. We relieve our entrepreneurs not only financially, but provide also for reduction of bureaucracy as well as simplifications, thereby making daily work clearly simpler.”