Current values: income tax/corporation tax 2025

Income tax rate (valid for 2025)

Simplified tax calculation in EUR:

Annual income       x percent     minus fixed amount = tax (before deductibles)

up to 13,308           x 0%             - 0                         = 0

> 13,308 to 21,617    x 20%           - 2,661.60              = tax

> 21,617 to 35,836    x 30%           - 4,823.30               = tax

> 35,836 to 69,166    x 40%           - 8,406.90              = tax

> 69,166 to 103,072  x 48%           - 13,940.18             = tax

> 103,072 to 1 million         x 50%           - 16,001.62             = tax

> 1 million               x 55%           - 66,001.62             = tax

Examples:

Annual income EUR 15,798.00 x 20% = EUR 3,159.60 less EUR 2,661.60 = EUR 498.00

Annual income EUR 45,672.00 x 40% = EUR 18,268.80 less EUR 8,406.90 = EUR 9,861.90

As part of the eco-social tax reform, the decision was made to reduce the second and third income tax rates. The second tax rate was reduced on 1 January 2022 from 35% to 32.50% and again on 1 January 2023 to 30%. The third tax rate was reduced on 1 January 2023 from 42% to 41% and again on 1 January 2024 to 40%. The first tax rate was reduced from 25% to 20% ahead of this in calendar year 2020.

Fiscal drag

Fiscal drag is a term that describes the hidden tax increase that occurs when the thresholds of the progressive tax rate are not adjusted in line with the rate of inflation, meaning that increases in income are therefore subject to a higher tax burden in real terms. Both the removal of fiscal drag and the application of indexation, i.e. adjustment in line with inflation, were adopted in 2022. As a result, the tax thresholds and deductible amounts are automatically increased each year by two thirds the prevailing rate of inflation. Use of the remaining third is decided upon again each year and should mainly benefit people on lower and middle incomes. 

In 2025, the tax rate levels will be raised by 3.83%. The threshold for the top tax rate will remain the same.

Tax rate thresholds from 2025:

Deductions

Unless otherwise specified, the deductions are annual amounts and reduce the amount of tax calculated in accordance with the income tax rate.

Family Bonus Plus

Until the end of the month in which a child turns 18, a monthly amount of EUR 166.68 (EUR 2,000 per year)

After the end of the month in which a child turns 18, a monthly amount of EUR 58.34

These amounts were indexed for children who live outside of Austria. On 16 June 2022, the European Court of Justice (ECJ) ruled that the indexing of the family allowance, the child deductions of the Family Bonus Plus and other family-related deductions was incompatible with EU law. Detailed information on the indexing of tax deductions can be found on the website of the Austrian Federal Ministry of Finance (BMF).

Deductions for sole earners/single parents (AVAB/AEAB)

If the income tax calculation results in a negative amount, the AVAB/AEAB is to be reimbursed to that extent.

Deduction for child support – monthly

For child support payments for children not living with the claimant in their own household, if the child is living permanently in Austria, in an EU member state, a state of the European Economic Area or Switzerland:

Deduction for travel expenses 

Deduction for travel expenses

Social security reimbursement / negative tax:

If the calculated income tax is below zero, the deductible amount for sole earners or the deductible amount for single parents is to be reimbursed.

The reimbursement for income tax below zero is a maximum of EUR 487.00 for employees (EUR 790.00 when claiming a surcharge on the deduction for travel expenses) and 608.00 EUR for commuters. Pensioners can be reimbursed a maximum amount of EUR 669.00.

Additional amount for children

From 2024, the additional amount for children is up to EUR 700.00 per child. In order to claim this additional amount for children, a minimum of 30 days of taxable business or non-self employed income must be accrued in the calendar year or only benefits pursuant to the Childcare Benefit Act, maternity allowance or carer’s allowance are received throughout the entire calendar year. Moreover, the additional amount for children can only be claimed if there is an entitlement to the deductible amount for sole earners or single parents and a calculated tax of less than EUR 700, or if both partners in a marriage/partnership have an income and the calculated tax on that income is less than EUR 700 each. In these cases, the additional amount for children is available only once per child for the person entitled to receive family tax credit.

Commuting allowance and commuter euro (for active employees)

Please refer to the “Commuting allowance and commuter euro” information sheet for details.

Duty to submit tax returns

Capital gains tax 

Tax deduction with limited tax liability

Corporation tax

 - since 2005: 25% of the income

As part of the eco-social tax reform, the decision was made to reduce the rate of corporation tax to 24% in calendar year 2023, and to 23% for calendar years from 2024 onwards.

*) The minimum corporation tax for limited liability companies (GmbH) founded after 30 June 2013 amounts to EUR 500.00 annually in the first five years, or EUR 125.00 quarterly, and in the following 5 years to EUR 1,000.00 annually, or EUR 250.00 quarterly. From the 11th year, the minimum corporation tax of 1,750.00 EUR had to be paid (5% of 35,000.00). Following the reduction of the minimum share capital for limited liability companies (GmbH) to EUR 10,000.00 from 2024 by the 2023 Corporate Law Amendment Act (GesRÄG), the minimum corporation tax for all limited liability companies (and the new FlexKap) is generally EUR 500.00 (5% of EUR 10,000.00) from 2024.  

Minor assets (Article 13 of the Income Tax Act [EStG])

Accounting limit

Please refer to the “Types of Profit Assessment” brochure for details.

Stand: 29.04.2025