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Austria Planning Personal Income Tax Cuts

by Ulrika Lomas, Tax-News.com, Brussels

30 September 2014


The Austrian Government has proposed a package of tax cuts worth at least EUR5bn (USD6.3bn) for 2016.

Starting from 2016, the Government plans to begin to reduce the personal income tax rate on incomes between EUR11,000 and EUR25,000 from the current 36.5 percent rate to an eventual rate of 25 percent. Further tax relief measures could be introduced in 2018.

The two parties that make up the ruling coalition – the Social Democrats (SPO) and the People's Party (ÖVP) – have not yet agreed on how the cuts will be financed.

In August of this year, the country's former Finance Minister and Vice Chancellor, Michael Spindelegger, resigned after he was unable to broker an agreement on income tax cuts. In particular Spindelegger, who was also the head of the ÖVP, had opposed the SPO's plan to introduce new wealth taxes to fund income tax reductions. The announcement could mean a breakthrough on this impasse, but the deal could come unstuck as the two parties wrangle on funding.

TAGS: tax | gross domestic product (GDP) | budget | agreements | Austria | tax breaks | individual income tax

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