Tax base and tax rate for municipal tax
The tax base is the total wages paid to the employees of a permanent business establishment of the enterprise in a calendar month. The permanent business establishment must be located in an Austrian municipality.
There are special rules for companies with permanent business establishments in multiple municipalities and itinerant companies:
- Should business establishments extend over several municipalities, the entrepreneur must divide the tax base between the municipalities involved.
- For itinerant companies, the tax base must be divided in accordance with the amount of time spent in each municipality.
In addition to the tax rate that is applied to the tax base, a personal allowance and a tax threshold must also be taken into account for municipal tax.
- The monthly gross salaries paid to employees at a business establishment within Austria
- The monthly salaries and other remuneration of any kind given to (shareholder-) directors of capital companies
- For foreign temporary workers: 70 per cent of recruitment fee
- For persons allocated for service by a public body: compensation for salaries
- The monthly salaries and other remuneration of any kind paid to freelancers
- Pension and retirement benefits
- Voluntary redundancy and severance payments
- Certain salaries exempt from income tax, some of which are:
- 60 per cent of the payments which employees receive for work abroad subject to tax concessions
- earnings received by development aid professionals as employees of development aid organisations as part of a development aid programme
Contributions for future provisions for employees under certain circumstances
voluntary social contributions to all employees, to certain groups or to the works council fund - free or subsidised meals and drinks for employees
- the non-cash benefits accrued by employees through use of facilities and equipment which are made available by the employer to all or to certain groups of employees
- wages paid to registered disabled persons pursuant to the Behinderteneinstellungsgesetz
- Salaries and other remuneration owed to major shareholders in a capital company for previous activity that otherwise has all the characteristics of an employment relationship
Legal bases
- Salaries exempt from income tax that do not form part of the municipal tax base: section 3 paragraph 1 (10), (11) and (13) to (21) of the Einkommensteuergesetz (EStG)
- Salaries and remuneration from a capital company to major shareholders: section 22 (2) of the EStG
Tax rate
The municipal tax amounts to 3 percent of the tax base.
Personal allowance
If an enterprise having one or more permanent business establishments does not exceed the tax base (monthly wage total, recruitment fee, salary reimbursement) of 1,095 Euro no municipal tax is charged.
Tax threshold
If the entire monthly wage total amounts to no more than 1,460 Euro the personal allowance of 1,095 Euro is deducted and the 3 per cent municipal tax is charged on the remaining amount:
- where the business establishments in which employees work are located in multiple municipalities, the personal allowance must be allocated by the entrepreneur to the business establishments in proportion to the wage totals,
- for a company which has business establishments in more than one municipality, but whose employees only work at one establishment, the personal allowance is allocated in full to the latter establishment.
Responsible for the content: Federal Ministry of Finance
