Austria Crypto Tax

Austria is 18th in the International Tax Competitiveness Index in 2022, which means that a pretty reasonably structured system of taxation doesn’t obstruct the emergence of new business and at the same time efficiently finances those priorities that are so important for the government. And among such priorities there is support for innovative businesses, which is why crypto entrepreneurs should definitely be interested in this jurisdiction.

The Tax Authority Austria is responsible for collecting and managing taxes all over the country and generally considers crypto activities to be taxable. The tax year corresponds to the calendar year, from 1 January until 31 December. If the tax and financial years of the company vary, then the annual assessments are based on the profits sourced during the financial year ending within the relevant calendar year.

Tax Reliefs

Austrian R&D tax incentives have been getting more generous over time. Austrian does give R&D tax relief through a volume-based R&D tax credit. The normal rate of the credit is 14% of the R&D expenses, which are fully deductible at the moment they are made. This incentive only covers R&D activities performed in Austria.

This means, amongst others, that an expert report certifying the R&D expenses is required in order to receive the R&D-credit. The report is issued by the Austrian Research Promotion Organisation (FFG). If R&D is subcontracted, the R&D tax credit is available as well. However, subcontracted R&D expenses are limited to a maximum of 1 mill. EUR annually.

In order not to tax a business with cross-border activities twice by two different countries, Austria has an extensive list of international agreements on the elimination of double taxation. They regulate which country may collect the taxes and which one has to refrain. Only residents of Austria can avail themselves of these agreements.

Such a treaty might stipulate that the right to tax the company is with another country, so it needs to be done according to the respective country’s tax legislation, and hence the Austrian tax authority cannot advise on that. If you need more detailed clarification in relation to your specific country, then our team here at Regulated United Europe (RUE) will be more than happy to help you; we regularly keep track of all the European jurisdictions’ updates and changes in international tax laws.

Corporate Income Tax

In Austria, the standard Corporate Income Tax rate is 24%, whether the profits are reinvested or distributed. In Austria, Austrian tax-resident companies are taxed on domestic and foreign income alike. A company is considered an Austrian tax resident if it is either duly incorporated in Austria, or has its place of effective management in Austria. The taxation of non-Austrian tax residents is limited, concerning income with its source in Austria. Under the general conditions, the crypto trading or exchanging businesses’ main activity is subject to taxation.

Those companies that are in a tax-loss position have to pay at least minimum Corporate Income Tax, which can be carried forward with no time limitations and credited against future Corporate Income Tax obligations. The minimum tax for GmbHs established after the 30th of June 2013 is 125 EUR quarterly per year for the first five years and 250 EUR quarterly for another five years. As for Joint Stock Companies (AG), it is 875 EUR quarterly per year.

Withholding Tax

Generally, domestic dividends paid to the company’s shareholders are subject to the Withholding Tax at the following rates: for corporations at 25% and for individual recipients at 27.5%. Foreign dividends paid to a domestic deposit account are also taxed at 27.5%. Therefore, all dividends paid to foreign deposit accounts must attract a tax rate of 27.5% and should constitute part of the return.

Very often, if gains from disposals, or income from capital assets, arise abroad, reference may be made to an applicable double taxation agreement. Whether or not this is the case with a double taxation agreement, foreign taxes paid on foreign dividends can be credited up to a maximum of 15%.

Capital Gains Tax

Pursuant to the Environmentally Responsible Tax Reform, new regulations concerning the taxing of cryptocurrencies came into effect at the beginning of March 2022. Holders are now treated as income from capital assets and will be taxed at a special rate of 27.5%. However, long-term gains are not subject to tax if cryptocurrencies were acquired prior to 28 February 2021. A gain is considered long-term when the cryptocurrencies have been held for more than one year.

According to the Austrian Income Tax Act, cryptocurrencies are specified as a digital representation of a value, which has not been issued or guaranteed by a central bank or other state body, is not necessarily pegged to a legal currency, and does not have the legal status of a currency but has been accepted by natural or legal persons as a means of exchange, and which can be transferred, stored, or traded electronically.

It involves all tokens that are publicly offered in payment, plus stablecoins whose value is linked to a legal currency. This definition does not include NFTs or asset-backed tokens since these are subject to taxation based on the nature of the underlying assets or securities.

Value-Added Tax

The standard VAT rate in Austria amounts to 20% and generally is levied on all products and services sold within Austria, as well as in the case of intra-community acquisitions. To register as a VAT payer, a crypto company needs to fill out an application and send it to the Austrian tax authority. In some cases, however, registration for value-added tax settlements is not obligatory. The general rule is that there is, for instance, an annual VAT registration threshold of 35,000 EUR for EU VAT-registered companies selling their products via the internet to Austrian consumers.

In fact, according to the decision of the CJEU, exchange and trading in cryptocurrencies are excluded from VAT. Because in those cases, they fall under the definition of currencies. On the other hand, most of the crypto-based or crypto-related business models are subject to VAT and, therefore, shall undergo a return of the same.

Besides annual VAT returns, businesses must also file the following returns:

If the annual turnover is less than 30 000 EUR – the company is excluded from charging and filing periodic VAT returns.

Social Insurance Contributions

If an Austrian crypto company employs people, then it has to register all employees with the Health Insurance Fund, which in turn informs the institutions responsible for accidents, pension, unemployment insurance, and other matters. The tax covers sickness, incapacity for work, disability, paternal leave, unemployment, old age pensions, death of a person liable to provide maintenance, survivors’ pensions, nursing care, and social benefits. Social Insurance Contributions are paid both by employers and employees. Employers pay it in sum, comprising 21.03% of employees’ salaries, while employees pay at 18.12%.

The key association of Austrian Security Institutions consists of all insurance funds and represents general interests at a national level concerning social insurance. This association is responsible for general coordination, comprehensively performed concerning activities connected with the Austrian social insurance.

Where wages are paid to their employees employers have to calculate their employees’ social insurance contributions based on salaries and withhold those from the salaries. For the employee’s contribution, the employer’s contribution has to be transferred to the health insurance provider en bloc for all employees by the 15th of the following month.

European and Global Tax Rules

The Austrian system of taxation is in really good harmony with EU and international taxation regulation, meaning Austrian crypto businesses should also pay attention to and closely follow the changes in international taxation.

So, here are the regulatory frameworks to consider:
Crypto-Asset Reporting Framework, recently cleared by the Organisation for Economic Cooperation and Development, a system to automate tax reporting and sharing of taxpayer information between authorities internationally.

How to Pay Tax on Crypto in Austria in 2024?

Austrian tax legislation still supports the current methods of taxing income from cryptocurrencies that were decided on as of 1 March 2022. Basically, it puts cryptocurrencies in a position equal to securities, giving an investor a level playing field when investing in traditional financial instruments and digital assets. The goal here is to make investments in cryptocurrencies more transparent and accessible for raising more confidence in this sphere.

There is a 27.5% capital gains tax for cryptocurrencies and securities. That is, the said capital gains from investments in bitcoin and other forms of cryptocurrencies purchased after 28 February 2021 become taxed with that rate. It is further expressed that cryptocurrencies bought before this date are not taxable since they are considered “old” assets whereby the speculative period of one calendar year has expired.

Besides providing a unified taxation of crypto assets, Austria offers multiple income tax reliefs for individuals to reduce the overall tax burden. Some such reliefs include transport allowances, family allowances, and allowances for single parents and large families. All of these measures will give relief to the taxpayers in regard to their financial situation and hence are ascribable to the economic development of the country.

The Austrian attitude towards taxing cryptocurrencies has so far been guided by gradual changes associated with the development of the digital economy. At the same time, allowing cryptoassets to be placed within the general tax system creates an investment-friendly environment that also strengthens the position of Austria in the international financial market.

Table with the main tax rates in Austria