Austria Crypto Tax

Austria ranks 18th in the 2022 International Tax Competitiveness Index, which is an indication of a fairly reasonably structured taxation system that doesn’t hinder the development of new businesses, as well as efficiently funds the government’s priorities. The priorities include the promotion of innovative businesses, which is why crypto entrepreneurs should feel compelled to explore this jurisdiction.

The Tax Authority Austria is responsible for the collection and administration of taxes across the country and generally considers crypto activities taxable. The tax year coincides with the calendar year and runs from the 1st of January until the 31st of December. If the tax and the company’s financial years differ, the annual tax assessments are then based on the profits sourced during the financial year(s) ending in the respective calendar year.

Tax Reliefs

In Austria, the generosity of research and development (R&D) tax incentives has been consistently increasing. The country provides R&D tax relief through a volume-based R&D tax credit. The standard rate of the credit is 14% of the R&D expenses, which are fully deductible at the time they’re incurred. Only R&D activities performed in Austria qualify for the incentive.

In order to receive the R&D credit, an expert report is required to verify the R&D expenses. The report is issued by the Austrian Research Promotion Organisation (FFG). The R&D tax credit is also available in the event of subcontracted R&D. However, subcontracted R&D expenses are limited to a maximum of 1 mill. EUR annually.

To prevent businesses engaging in cross-border activities from being taxed twice by two different countries, Austria has an extensive list of international agreements on the elimination of double taxation. They regulate which country can collect taxes and which one has to refrain. Only residents of Austria can avail of these agreements.

If such an agreement stipulates that another country has the right to tax the company, then it’s done in accordance with that country’s tax legislation and therefore the Austrian tax authority can’t advise on it. If you require further clarification in relation to a specific country, our team here at Regulated United Europe (RUE) will be delighted to assist you, as we closely monitor all European jurisdictions and international tax laws.

Corporate Income Tax

In Austria, the standard Corporate Income Tax rate is 24%, regardless of whether profits are retained or distributed. Austrian tax resident companies are taxed on their domestic and foreign income. A company is considered a tax resident if it has its registered office or place of effective management in Austria. Non-Austrian tax residents are subject to limited taxation on income sourced in Austria. Businesses whose core activity is crypto trading or exchange are subject to the tax under general conditions.

Companies that are in a tax-loss position, pay the minimum Corporate Income Tax, which can be carried forward with no time limitations and can be credited against future Corporate Income Tax obligations. For Limited Liability Companies (GmbH) established after the 30th of June 2013, the minimum tax is 125 EUR per annual quarter for the first five years and 250 EUR per quarter for the next five years. For Joint Stock Companies (AG), the minimum tax is 875 EUR per annual quarter.

Withholding Tax

Domestic dividends distributed to the company’s shareholders are generally subject to the Withholding Tax at a rate of 25% for corporations and 27.5% for individual recipients. Foreign dividends paid to a domestic deposit account are also subject to a 27.5% rate. It’s important to note that dividends paid to foreign deposit accounts are also subject to a 27.5% rate and must be included in the tax return.

In many cases, where disposal profits or income from capital assets are derived from abroad, it’s possible to refer to an applicable double taxation agreement. However, irrespective of a double taxation agreement, foreign-paid taxes on foreign dividends can be credited up to a maximum of 15%.

Capital Gains Tax

In accordance with the Environmentally Responsible Tax Reform, new regulations on the taxation of cryptocurrencies came into force in March 2022. Cryptocurrency holdings, including long-term gains, are now regarded as income from capital assets and are taxed at the special rate of 27.5%. However, long-term gains are tax-free if cryptocurrencies were bought before the 28th of February 2021. A long-term gain is considered when cryptocurrencies have been held for more than a year.

The Austrian Income Tax Act defines cryptocurrencies as digital representations of a value that haven’t been determined or guaranteed by a central bank or other state body, aren’t necessarily tied to a legal currency, and don’t hold the legal status of a currency, but are accepted by natural or legal persons as a means of exchange and can be transferred, stored or traded by electronic means.

It includes all publicly offered payment tokens, as well as stablecoins, the value of which is tied to a legal currency. The definition excludes non-fungible tokens (NFTs) and asset-backed tokens, as they’re taxed depending on the nature of the underlying assets or securities.

Value-Added Tax

In Austria, the standard VAT rate is 20% and is generally levied on all products and services sold in Austria and in the case of intra-community acquisitions. To register as a VAT payer, a crypto company should fill out an application and submit it to the Austrian tax authority. However, in some cases registering for VAT payments isn’t mandatory. For instance, for EU VAT-registered companies selling products on the internet to consumers in Austria, there is a VAT registration threshold of 35,000 EUR per annum.

In line with the decision of the Court of Justice of the European Union (CJEU), the exchange and trading of cryptocurrencies are tax-exempt for VAT purposes. This is because in this context, cryptocurrencies are treated as traditional currencies. However, many other crypto-based or crypto-related business models are liable for VAT and therefore should be submitting VAT returns.

In addition to annual VAT returns, businesses also have to submit the following:

• When the turnover exceeds 100,000 EUR, a company is obligated to file monthly VAT returns
• When the turnover is between 30,000 EUR and 100,000 EUR, such a company has to file quarterly VAT returns

When the annual turnover is less than 30,000 EUR, the company is exempt from charging VAT and submitting periodic VAT returns.

Social Insurance Contributions

If an Austrian crypto company employs people, it’s required to register all employees with the Health Insurance Fund, which will then inform the institutions responsible for accidents, pension, unemployment insurance, and other relevant 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 by employers and employees. Employers pay 21.03% of the employees’ salaries, and employees have to pay 18.12%.

All insurance funds are included in the Main Association of Austrian Security Institutions, which represents the general interests of national social insurance. The association is responsible for the comprehensive coordination of the activities related to Austrian social insurance.

Employers must calculate their employees’ social insurance contributions on the basis of their salaries and deduct them from those salaries. Both the employer’s contribution and the employee’s contribution must be transferred to the health insurance provider collectively for all employees by the 15th of the following month.

European and Global Tax Rules

The Austrian taxation system is well-harmonised with the EU and international taxation regulations, which means that Austrian crypto businesses should also be familiar with and closely monitor international taxation changes.

The following regulatory frameworks are worth taking into account:

• The EU’s Directive on Administrative Cooperation (DAC), which was introduced to ensure fair and efficient taxation within the union and is aligned with the landmark Markets in Crypto-Assets (MiCA) regulation
• The Crypto-Asset Reporting Framework (CARF) which has been recently approved by the Organisation for Economic Cooperation and Development (OECD), and is designed to automate tax reporting and taxpayer information sharing between international authorities

How do I pay taxes on crypto in Austria in 2024?

In 2024, the Austrian tax system still supports the current approaches to the taxation of cryptocurrency income introduced as of 1 March 2022. Under these rules, cryptocurrencies are equated with securities, which provides investors with a uniform environment for investing in both traditional financial instruments and digital assets. This decision aims to increase transparency and accessibility of investments in cryptocurrencies, thus increasing confidence in this sector.

The capital gains tax rate for cryptocurrencies and securities is 27.5%. This means that capital gains from investments in bitcoin and other cryptocurrencies purchased after 28 February 2021 are taxed at this rate. It is important to note that cryptocurrencies purchased before this date are not taxable, as they are considered “old” assets for which the speculative period of one calendar year has already expired.

In addition to a harmonised tax rate for cryptoassets, Austria provides a variety of tax deductions for individuals aimed at reducing the tax burden. Such deductions include transport allowances, family allowances, allowances for single parents and large families. These measures alleviate the financial situation of taxpayers, thus contributing to the economic development of the country.

Overall, Austria has demonstrated a progressive approach to the taxation of cryptocurrencies in an effort to adapt to the development of the digital economy. The integration of cryptoassets into the general tax system helps to create a favourable environment for investors and strengthen the country’s position in the international financial market.

Table with the main tax rates in Austria