New Austrian Government Agrees On Tax Reforms

by Ulrika Lomas, Tax-News.com, Brussels

15 January 2020

The new Austrian coalition government, consisting of the conservative People's Party and the Green Party, has agreed on a program for government, which includes several significant tax measures.

The main tax proposals in the coalition agreement include the following measures:

• A reduction in corporate tax from 25 to 21 percent. The previous Government also announced plans, last year, to lower corporate tax to 23 percent in 2022 and to 21 percent in 2023.
• A reduction to the rates for the first three personal income tax brackets from 25, 35 and 42 percent, to 20, 30, and 40 percent, respectively.
• The possible introduction of a national carbon tax, or hikes to existing taxes, on sectors not covered by the European Union Emissions Trading Scheme from 2022.
• Tax measures to encourage the purchase of non-CO2 emitting vehicles.
• Possible introduction of capital gains tax exemptions based on the period of time assets are held.
• The introduction of a flat flight ticket tax of EUR12 (EUR13.36) per flight. Currently, flights are taxed at EUR3.50 to EUR17.50, depending on destination.
• Changes to tax laws to make them simpler and fairer.

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