Austria - Taxation

The income tax for individuals ranged in 1996 from 10% on annual taxable income of up to S 50,000 to 50% on taxable income of S 700,000 or more, with tax relief available for individuals. Payroll withholding tax is in effect. Taxes are levied on corporations (34% of profits, less deductions and credits), trade income, real estate, inheritance, dividends, gifts, and several miscellaneous services and properties. A value-added tax was introduced 1 January 1973 at a basic rate of 16%; the standard rate in 1996 was 20%. A reduced rate of 10% applied to basic foodstuffs, farm products, horticultural and fishery products, books and newspapers, rental of immovable property, tourism, and some professional services. There was also an augmented rate of 32% on automobiles, airplanes, and ships.

Direct taxes in Austria include a corporate tax of 34%, applicable to both domestic and foreign companies, and on both distributed and reinvested profits; and a progressive income tax with five brackets: 0% on the first increment up to about $3,600; 21% on the next increment up to about $7,200; 31% on the next increment up to about $21,000; 41% on the next increment up to about $50,000; and 50% on income above $50,000. Capital gains are taxed at 34%. Dividend income is taxed at 25%, withheld at the source. There is no wealth tax. In accordance with EU guidelines, tax exemptions and reductions are included in incentive packages for investment in economically depressed and underdeveloped areas along Austria's eastern border.

Income tax for an individual in 2002 was according to a four-bracket progressive schedule: 21% (on taxable income from €3,640 to €7,270; 31% (€7,270 to €21,800); 41% (€21,800 to 50,870); and 50% above €50,870. Married people are taxed separately.

The main indirect tax in Austria is its value-added tax (VAT) introduced 1 January 1973 at a basic rate of 16%. In 2002 the standard rate was 20%. A reduced rate of 10% applied to basic foodstuffs, farm products, horticultural and fishery products, books and newspapers, rental of immovable property, tourism, and some professional services. There was also an augmented rate of 32% on automobiles, airplanes, and ships, with a standard rate of 20%, and a reduced rate of 10%.