Austria plans to cut €4.5 billion (US$5.2 billion) in taxes - about 1.5% of its economic output - over the next three years.
To help fund Chancellor Sebastian Kurz’s campaign promises while keeping the budget on track for a surplus, the country hopes to tap US internet giants such as Facebook and Amazon as a way of balancing the books.
According to Bloomberg, the coalition government of conservatives and nationalists will start with about €1 billion (US$1.14 billion) of cuts in 2020 that will mostly benefit low-income workers. A broader income tax cut and lower taxes on corporations is due to follow.
But as much as €200 million (US$227 million) will be raised through new levies on internet advertising, online retailers and sharing platforms. This includes a new 3% tax on internet advertising revenue.
Kurz said: “Our focus is on small incomes, medium incomes, and on measures to make Austria more attractive as a place to do business. The tax reform is designed not to raise new debt.”
More details on the proposed tax cuts will be released over the coming months, but key elements of the tax plan that was announced last week include:
- A €700 million (US$795 million) cut in social security contributions, which must be paid even by people who earn less than the tax-free income ceiling – this is the largest single element of the measures to be introduced in 2020;
- Reforming the main tax brackets in 2021, although details have yet to be specified;
- Company tax relief in 2022, which includes simplifying tax declarations, thereby making the hiring of tax consultants unnecessary for small employers;
- Requiring online retailers from non-European Union countries to pay value-added tax for low-value goods as exemptions for orders below €22 (US$25) are phased out;
- Subjecting sharing platforms, such as Airbnb, to stricter reporting rules in order to prevent tax evasion and making them liable for tax payments.
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
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Minding your manners in Central Europe
Austria plans to cut €4.5 billion (US$5.2 billion) in taxes - about 1.5% of its economic output - over the next three years.
To help fund Chancellor Sebastian Kurz’s campaign promises while keeping the budget on track for a surplus, the country hopes to tap US internet giants such as Facebook and Amazon as a way of balancing the books.
According to Bloomberg, the coalition government of conservatives and nationalists will start with about €1 billion (US$1.14 billion) of cuts in 2020 that will mostly benefit low-income workers. A broader income tax cut and lower taxes on corporations is due to follow.
But as much as €200 million (US$227 million) will be raised through new levies on internet advertising, online retailers and sharing platforms. This includes a new 3% tax on internet advertising revenue.
Kurz said: “Our focus is on small incomes, medium incomes, and on measures to make Austria more attractive as a place to do business. The tax reform is designed not to raise new debt.”
More details on the proposed tax cuts will be released over the coming months, but key elements of the tax plan that was announced last week include:
- A €700 million (US$795 million) cut in social security contributions, which must be paid even by people who earn less than the tax-free income ceiling – this is the largest single element of the measures to be introduced in 2020;
- Reforming the main tax brackets in 2021, although details have yet to be specified;
- Company tax relief in 2022, which includes simplifying tax declarations, thereby making the hiring of tax consultants unnecessary for small employers;
- Requiring online retailers from non-European Union countries to pay value-added tax for low-value goods as exemptions for orders below €22 (US$25) are phased out;
- Subjecting sharing platforms, such as Airbnb, to stricter reporting rules in order to prevent tax evasion and making them liable for tax payments.
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
OTHER STORIES THAT MAY INTEREST YOU
Minding your manners in Central Europe
