Income Tax
in Austria

Income tax reaches natural persons and nobody else. EStG § 1 Abs. 1 says so in one line: only natural persons are liable to income tax. A company is not; an Austrian GmbH, FlexCo or AG pays corporate income tax at 23 percent instead, which is a different tax on a different person and is set out in the corporate tax guide. The two meet only when the company pays something out.

What a person is taxed on depends on one test. Under EStG § 1 Abs. 2, an individual with a Wohnsitz (domicile) or a gewöhnlicher Aufenthalt (habitual abode) in Austria is unlimitedly liable, and that liability covers all income, Austrian and foreign. Under Abs. 3, an individual with neither is limitedly liable, and that reaches only the Austrian income listed in EStG § 98.

Nothing in that test turns on nationality, on a residence permit or on where a company is registered. It turns on a dwelling and on time spent, and both have statutory definitions, set out below.

Six bands, charged on parts of income rather than on the whole of it. The figures below are the amounts in force for the 2026 calendar year.

The statute writes six bands and then one further sentence: for parts of income above one million euro the rate is 55 percent in the calendar years 2016 to 2029. That sentence is the only part of the tariff with an end date on it, and a table that folds it into a seventh band loses the fact.

Austria indexes its tariff. EStG § 33 Abs. 1a subjects the band thresholds to inflation adjustment under EStG § 33a, and § 33a Abs. 4 requires the Minister of Finance to publish the following year's amounts by regulation by 31 August of the current year. The 2027 amounts were published on time.

The regulation states its own arithmetic. The inflation rate measured under § 33a Abs. 3 is 3.4 percent, so the 2026 amounts are raised by two thirds of it, 2.2666 percent, and rounded up to whole euros. Every 2026 figure on this page reproduces its 2027 counterpart exactly on that calculation, which is the check we ran before publishing either column.

Two thirds is not all of it. § 33a Abs. 5 requires the government to deal with the remaining third separately, by a Council of Ministers resolution each year by 15 September. What that step will contain for 2027 is not in any instrument we have read, so this page does not say.

Because the rates apply to parts of income, a person in the 30 percent band does not pay 30 percent. Taking EUR 40,000 of taxable income and running it through both tariffs:

This is one number for one stated figure of taxable income, and it is not a calculation of anybody's tax. There are no deductions in it, no Sonderausgaben, no tax credits, no Familienbonus Plus, and no social insurance. Those change the result for every real person, and working out which of them apply to a particular taxpayer is work Austrian law reserves, as the section on reserved work below explains.

Limited liability is not simply the same tariff on less income. EStG § 102 changes the calculation and removes several reliefs.

This is the part of Austrian income tax that surprises founders, and it turns on a single number.

EStG § 22 Z 2 treats the salaries and other remuneration of any kind that a company pays to a person substantially involved in it as income from self-employed work, even where the engagement otherwise bears every feature of an employment relationship within EStG § 47 Abs. 2. A person is substantially involved where his share of the company's share or nominal capital is more than 25 percent, and a holding through a trustee or through another company counts the same as a direct one. Below that line, EStG § 25 Abs. 1 Z 1 lit. b puts the same pay back into employment income, even where the articles remove the director's duty to follow instructions.

So the shareholding, not the job title and not the service contract, decides the head of income. What follows is mechanical.

An Austrian employee is commonly paid fourteen times a year. That comes from collective agreements and contracts of employment, not from tax law; what tax law does is set what happens to the extra payments.

Two limits sit around that ladder. Taxation at those fixed rates does not happen at all where the Jahressechstel is EUR 2,615 or less in 2026, rising to EUR 2,675 in 2027: such payments go into ordinary wage tax instead. And the Jahressechstel itself is one sixth of the current pay already received in the year, annualised, so payments beyond it, or beyond EUR 83,333, are taxed in the month they are paid under § 67 Abs. 10. An employer may not put more than one sixth of the year's current pay through the fixed rates (§ 77 Abs. 4a).

Income from capital is taxed at a special rate and outside the tariff. EStG § 27a Abs. 1 charges 25 percent on money deposits and unsecuritised money claims against credit institutions, and 27.5 percent in all other cases, which is the rate a distribution from an Austrian GmbH carries.

The sentence that matters for a founder comes next in the same paragraph: capital income taxed at those special rates is taken into account neither in the total amount of income nor in the income within EStG § 2 Abs. 2, unless the taxpayer opts into ordinary assessment under § 27a Abs. 5. So a dividend does not sit on top of a salary and drag it into the next band. The tariff never sees it.

Who withholds that tax, when, and how a treaty reduces it is a separate subject: how withholding tax on dividends works in Austria. Selling the shares rather than drawing a dividend is a different charge again, and it is on the capital gains tax guide.

Not everybody files. EStG § 42 sets out who must, and EStG § 41 adds the cases where a person whose income has already borne wage tax is assessed anyway.

The dates are the same for income tax as for corporate tax. BAO § 134 Abs. 1 sets the end of April of the following year for a paper return and the end of June for an electronic one, with an individual extension available on a reasoned application. Where a professional representative holding a power of attorney files under the Quotenregelung in BAO § 134a Abs. 1, the date is 31 March of the second calendar year after the assessment period.

Not all of this work may lawfully be done by anyone. Under WTBG 2017 § 2 Abs. 1, advice and assistance in tax law and accounting, bookkeeping including payroll, closing the books and representation before the tax authorities are reserved to a licensed Austrian Steuerberater. This page therefore sets out what the statutes provide and what follows from them mechanically, and advises on no reader's position.

What we can tell you without reservation. Which rules are in play, which paragraph sets each figure, and which of them turn on facts you already know: your shareholding, where you keep a dwelling, how long you are in Austria and whether your pay has borne wage tax.

What we hand to a licensed adviser. Anything that applies those rules to your own numbers: the return itself, the deductions and credits you can take, the treaty position, and any correspondence with the tax office.

What we do alongside it. The company work the tax sits on: the formation, the register filings, the registered office, the tax number and the VAT number, and the founder's residence route. Those are not reserved and they are what this firm is for.

The reserved part goes to a licensed Austrian Steuerberater. Advice on your own tax position, the return itself and any representation before the tax office are reserved by WTBG 2017 § 2 Abs. 1. We say so rather than answer it.

The company part is ours. Formation, register filings, the registered office, the tax number and the VAT number, and the founder's residence route: ask about your Austrian position, or start your onboarding if you are ready to engage.