Budget: Government Launches Major Tax Package

The majority of the measures are already known from the coalition pact, but it now also includes the suspension of the valorization of the child tax credit for the next two years. The third of the "cold progression" remaining with the finance minister will even be retained for the entire legislative period.

Overall, the measures amount to a volume of 76 million euros for this year. Next year, they are expected to bring in 696 million.

The package also includes some measures that provide relief. Beneficiaries are drivers, as the commuter euro is tripled to six euros per kilometer. This is intended as compensation for the abolition of the climate bonus. The negative surcharge for commuters will also be increased. Furthermore, the previously announced VAT exemption for women's hygiene products and contraceptives will be implemented. Additionally, a tax-free employee bonus of up to 1,000 euros is to be made possible this year. It will also be available next year, although the amount is still open for budgetary reasons.

Government Initiates Major Tax Package

Also planned is an increase in the basic flat-rate taxation including input tax flat rate: This year, it rises (from 220,000 euros and 12 percent) to 320,000 euros and 13.5 percent, and from next year to 420,000 euros and 15 percent. The flat-rate taxation involves determining parts of operating expenses and input taxes with a flat rate, largely eliminating record-keeping and document retention obligations. Overall, the relief measures are expected to amount to 170 million this year, and even 273 million by 2026.

The foundation entry tax rate will be increased - from 2.5 to 3.5 percent. There is a closure of a loophole in the real estate transfer tax. Previously, if the buyer did not directly purchase the property but rather a company that owned the property, a reduced tax rate applied. This will now be corrected.

Rezoning Levy Introduced

Additionally, a rezoning levy is being introduced. Specifically, a rezoning surcharge is to be added to the positive (business and non-business) income from the sale of rezoned land. This is to amount to 30 percent and will be collected as part of the real estate income tax.

The energy levy is being "adjusted." Otherwise, according to the Ministry of Finance, the agreed 200 million in consolidation contributions would not be reached. Specifically, the limit for subsidized investments is being reduced from 72 to 20 euros per megawatt hour.

Another change concerns the mandatory electronic delivery via FinanzOnline for all companies required to submit a VAT return. This now also affects small businesses that were previously able to apply for exemptions.

Gambling Becomes Expensive

With another legislative amendment, the gambling levy for lotteries is being increased from 16 to 17.5 percent, and the concession and gambling levy for electronic lotteries (online gambling) is to be raised from 40 to 45 percent. Additionally, the gambling levies for state games with gaming machines and for games with video lottery terminals are being increased from ten to eleven percent, and the surcharge levies of the states from 15 to 16.5 percent. Furthermore, a gambling levy on the administrative cost contribution for lotteries of 7.5 percent is to be introduced.

Finance Minister Markus Marterbauer (SPÖ) emphasized in a statement that the measures sent for review promote tax fairness without weakening the economy. Additionally, the government is relying on targeted relief measures. State Secretary Barbara Eibinger-Miedl (ÖVP) stated that a mix of initiatives is needed on the way to a balanced budget. With the relief steps, the first steps are now being taken to strengthen the business location.

The Greens were not enthusiastic about the tax package. Budget spokesperson Jakob Schwarz saw "reckless" cuts in the "completely wrong place." The social third in the adjustment of cold progression, which in the past provided greater tax relief for single parents, is being cut. The other two thirds, which provide greater relief for higher earners, remain untouched. The suspended valorization of the child allowance also demonstrates "social harshness," according to Schwarz: "Apparently, combating child poverty is just lip service for the government." The Greens also criticize the government's plans to compensate for the abolished climate bonus by tripling the commuter euro. The climate bonus is being cut for everyone, while the commuter euro only helps commuters.

(APA/Red)

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