When it comes to taxation in Austria, many people have the feeling that tax rates are too high and tax laws are too complicated. Well, they are right... in general :-) A least in your case high taxation rates can be fought by filing a tax return or claiming VAT in certain circumstances; the complexity remains.
The following article will give you a brief overview on taxation in Austria relevant for trainees and employees from abroad. It is not be understood as a tax consultancy service. The provided information is based on the tax legislation in force as at May 2013.
Please note: Pursuant to local legislation IAESTE must not give advise on taxation in any kind. Do not rely on the information furnished below without seeking advise from a professional tax consultant. The information provided is not complete and/or may not outline specific matters relevant for you.
As a trainee/employee from abroad you will be taxed as employee pursuant to Austrian Income Tax Act (AIT). As a rule, the tax and the social insurance contribution is levied by way of withholding by the employer.
Relevant for your tax situtation is, whether you are a limited taxpayer or an unlimited taxpayer in Austria. As unlimited taxpayer the worldwide income you generate (eg wages, capital gains,...) - for the term you have the unlimted taxpayer status in Austria - is in principal subject to taxation in Austria (exemptions are likely). As limited taxpayer only income with connection to Austria is subject to taxation in Austria (eg. wages from employed work in Austria).
Am I a limited or unlimited taxpayer?
This question requires an analysis of your situation. Nevertheless, some examples:
Taxation regime for Unlimited Taxpayers
Taxation regime for Limited Taxpayers
Opting-in as unlimited taxpayer
Limited taxpayers may opt-in to be deemed an unlimted taxpayer in Austria, if the following prerequisits are met:
for unlimited taxpayers:
|Examples wages and net incomes. All figures approximations and in EUR.*)|
|gross wage / month||net / month||length of work contract||potential total tax return (per anno)|
*) Amounts may differ slightly depending on the Austrian city you are located.
For unlimted taxpayers or those who can opt-in as unlimted taxpayers:
In general the tax return must be filed using a online tool from the financial authorities after year end (Finanzonline, German only). In order to receive the maximum return, it might be required to deduct additional expenses from your income. Please note that there might be bilateral agreements between your home country and Austria; such agreement will include additional rules regarding taxation.
If you require help with filing the tax return or have additional questions, please get in touch with Erich at firstname.lastname@example.org. Please let us know in time if you intend to file a tax return to make sure you have access to neccessary information.
Not neccessarily, there is no legal obligation to use such services. Please be aware that the Austrian nominal tax rate is comparable high, on the other hand Austrian tax law offers many examptions and tax deductible items, which you may take advantage of. Especially, if you moved to Austria for working it is advisable to seek professional tax consultation in order to reduce your tax burden. In addition, the fee for tax consulting services are tax deductible if paid during your term in Austria (advance payment possible). The fee for tax consulting services will range from about EUR 250-400, therefore please estimate your potential tax return (see table above), whether it pays off to engage a tax advisor.
Tourists including trainees might be eligible to claim VAT on purchases in the European Union upon departure under the following conditions:
In practice the process is as follows: after shopping tell the shop assistant that you are a tourist and he/she will fill-in the applicable form "U34" for you. Upon departure this form has to be presented to the EU customs officers at the airport or at the outer-border of the European Union (when travelling by car or train) and you will receive a customs stamp. The stamped form must be returned to the shop, and you will receive the VAT return.
In most cases you will be obliged to declare customs and settle import VAT once you return to your non-EU home country.
Please get in contact with us at email@example.com, and we will take care of your queries.