New Government Plans Tax Reform

The newly sworn in Austrian government recently introduced its 326-page government plan for 2020 – 2024, which also includes some intended changes with respect to taxation. The aim of these possible changes is to lower the overall tax burden and to make the tax system more ecological.

These are some of the main proposed tax changes:

• Income tax: Austria has a progressive rate of income tax, beginning at 0 % and increasing to 25 %, 35 %, 42 %, 48 %, 50 % and 55 %.

The government plan proposes reducing the progressive income tax rate from 25 % to 20 %, from 35 % to 30 % and from 42 % to 40 %. Individuals with low and medium incomes should benefit from these reductions. At present there is no proposal to reduce the progressive income tax rate of 55 %, which is one of the highest in the OECD.