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Austria.
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Tax reform reduces the burden on companies

Wirtschaftsministerin Margarete Schramböck © Austrian Federal Ministry for Digital and Economic Affairs

The tax reform 2022 reduces the corporate income tax rate as well as wage and income taxes, whereas the tax-free profit allowance and investment allowance round off the package of measures designed to benefit the business community. The tax burden on companies will be reduced by up to € 700 million by the decrease of the corporate income tax (KÖSt). The corporate income tax will be cut from 25 to 24 percent in 2023 and then once again decline to 23 percent in 2024. Moreover, the investment allowance will provide tax relief of up to € 350 million. Small and medium-sized firms will save an average of € 1,000 annually.

The tax-free profit allowance introduced 2010 will be increased from 13 to 15 percent. All individual persons with diverse types of business income can take advantage of this profit allowance, regardless of whether they determine their profits by means of income and expenditure accounting or a balance sheet. In the future, depreciable property, plant and equipment with a value of up to € 1,000 (previously: € 800) considered to be "low-value assets" can be completely deducted as operating expenditures effective immediately.

A carbon dioxide tax has been introduced for climate protection purposes. The tax reform measures also encompass tax-related incentive effects derived from the setting up of a national emission certificate system. Based on the German model, relief will also be provided to CO₂-intensive companies as a means of avoiding "carbon leakage." This measure is designed to ensure that companies do not relocate production operations to countries with less stringent environmental regulations due to costs related to climate protection measures. A hardship scheme for particularly energy-intensive companies is also included. There will also be an exemption from the "own electricity tax" on producing electricity for one's own consumption, which will also provide relief of € 50 million.

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