While possible new taxes – such as the wealth and inheritance tax – are occupying the coalition negotiators of the ÖVP, SPÖ and NEOS, some tax changes from the Black-Green federal government have already been determined. The small business limit will be increased to 55,000 euros, among other things.
As part of the automatic inflation adjustment, the first four rate limits will be adjusted on January 1. This means that the marginal tax rate for the first 13,308 euros is zero percent, for income up to 21,617 euros 20 percent, for income up to 35,836 euros 30 percent and up to 69,166 euros 40 percent. The marginal tax rate is 48 percent up to 103,072 euros and 50 percent above.
To date, the exemption limit for “other remuneration” (particularly holiday and Christmas bonuses) is not part of the compensation for cold progression. As in 2024, a corresponding adjustment will also take place next year.
The tax deduction is also adjusted to inflation, even for single earners. From July, single parents with an annual income of up to 25,725 euros are entitled to additional child benefit in the form of a sales amount for children up to the age of 18. The amount of 60 euros and the maximum income amount will be adjusted annually to inflation from 2026.
More money for business trips and mileage reimbursement
The kilometer allowance will be increased to 50 cents per kilometer from the beginning of this year; a contribution of 15 cents can be claimed for persons transported. In addition, the current upper limit for the kilometer allowance for bicycles will be doubled from 1,500 kilometers to 3,000 kilometers per year and the lower limit for pedestrians will be halved to one kilometer.
In service apartments, the living area, which is completely free of benefits, is increased to 35 square meters and the common areas are no longer fully allocated to each individual resident, as was previously the case, but on a pro rata basis. The day and night allowances will also be increased: daily allowances for domestic business trips can then amount to 30 euros (previously 26.40 euros), the night allowance will be increased from 15 to 17 euros.
In addition to the increase in the limit, small businesses have another reason to be happy: in the future they will always have the option to issue invoices in a simplified way, regardless of the amount stated on the invoice (previously this was only possible for invoices up to 400 euros). In the future, the small business exemption can also be used by entrepreneurs who operate their business not in Austria, but in another EU Member State.
New for employees is the ‘Telework Act’; this replaces the home office and makes it possible to work from any location, for example in a coffee house, if agreed with the employer.
Appointments with the Tax Authorities via video or live chat
There are also innovations in the field of financial administration. For security reasons, the FinanzOnline login is converted to two-factor authentication. This will be mandatory from autumn 2025 at the latest. The capacity for video appointments at the Tax Authorities is being expanded. In addition, the ability to provide information via live chat or on the phone should also be promoted.
A scheme has been extended, under which a withholding tax of 10 percent is deducted from payments made when laying pipes (usually to farmers). In the future, payments for flood protection measures should also be recorded. An entrepreneur who wants to transfer his business to a family member can submit an application from January 1 to supervise the transfer of the business.
The funding is assessed and published
To make the background of the budget more understandable, ‘open e-learning’ will be launched in the second quarter. In addition, in the first quarter, the most important economic indicators relevant to the budget will be presented in national and international comparisons on the homepage of the Ministry of Finance.
A financing task force will also be launched in 2025 to identify any duplication in the financing structure. The interfederal and state development of suitable impact indicators for registration in the transparency database should increase transparency and improve the data situation on the impact of financing.
A pilot project is starting in Vienna to reduce the national budget risk in the climate sector. In the context of the Public Information Act, all subsidies to companies worth 1,500 euros or more must be proactively published from September.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
