Austria will witness a major tax reform in 2024

The Austrian Chancellor, Karl Nehammer, has announced the introduction of a major tax reform in 2024, which will relieve taxpayers’ financial burden. The new tax brackets for yearly income earned will be as follows:

• EUR 12,816 - 20,818 – 20%
• EUR 20,819 - 34,513 – 30%
• EUR 34,514 - 66,612 – 40%
• EUR 66,613 - 99,266 – 48%
• EUR 99,267 and above – 50%

The self-employed will see relief as well, as their minimum taxable amount will increase to EUR 33,000. This tax group has to pay 27% of their gross profit in health and social insurance before paying tax on the rest.

Additional child allowances for lower income families will be raised to EUR 700 from EUR 550. Also, the government plans to increase childcare subsidies from employers to EUR 2,000 from EUR 1,000.

Overtime allowances are highly likely to see a raise as well. At the moment, the first EUR 86 earned from overtime hours isn’t taxed at all. This amount is planned to be increased to EUR 120, while monthly tax-free allowances could amount to EUR 400.

Home office deductions, which became effective in 2021 for those who work from home, will be made permanent.

Deduction amounts will be automatically adjusted to 100% of the inflation amount instead of the current two-thirds. As a result, tax credits claimed on annual returns, including transport and pensioner tax credits and the single parent tax deductions, for instance, will rise along with the inflation level.