Austria’s lower house of parliament (Nationalrat) passed the Budget Restructuring Measures Bill 2025 (Budgetsanierungsmaßnahmengesetz 2025) on 7 March 2025.

The announcement was made in a release on 10 March 2025 by the Austrian Ministry of Finance

A series of consolidation measures were adopted in the first session of the National Council following the swearing-in of the Federal Government. These first consolidation steps mark the beginning of the adjustment of the federal budget to meet the new challenges. In doing so, the Federal Government attaches especially great importance to measures that are growth- and employment-promoting, socially acceptable and balanced, and that take effect on both the payments and the receipts side.

Overall, these measures will lead to a consolidation of EUR 1.24 billion in 2025 and EUR 1.65 billion in 2026. This table lists the individual expenditure and revenue measures together with their annual budgetary savings effects.

Overview of initial consolidation measures in 2025/2026

Description of the measures and changes to tax law

The abolition of the existing model of educational leave (UG 20 Arbeit) will lead to savings of EUR 350.0 million in 2025 and EUR 650.0 million in 2026. A follow-up regulation is to be developed for 2026.

On the revenue side, this first consolidation package includes the following tax law changes, which will enter into force for the majority of the measures from 1 April 2025:

• Extension of the top tax rate by four years up to and including 2029: The so-called ‘top tax rate’ of 55% for income in excess of EUR 1 million was introduced for a limited period by the Tax Reform Act 2015/2016. As part of the Economic Stimulus Act 2020, the top tax rate was extended by a further five years (until 31 December 2025). Now, it is to be extended by a further four years (until 31 December 2029). This is expected to generate additional revenue of around EUR 50 million per year.
• Early abolition of VAT exemption for PV systems as of 1 April 2025: In the sector of value added tax, a zero tax rate (corresponding to a real exemption from value added tax) was introduced for the purchase and installation of photovoltaic modules from 1 January 2024 for a limited period until 31 December 2025. The regulation is now to be cancelled prematurely from 1 April 2025. In 2025, additional revenues of around EUR 175 million are expected.
• Increase in betting fee to 5% as of 1 April 2025: The legal transaction fee pursuant to Section 33 TP 17 (1) (1) of the 1957 Fees Act currently amounts to 2% of the stakes. This is relatively low compared to the gambling tax, which is generally 16% of the stake. Due to the similarity of betting and gambling under the Austrian Gambling Act, the tax burden is to be harmonised. As of 1 April 2025, the betting fee is to be 5%. This is expected to generate additional revenue of around EUR 50 million in 2025.
• Inclusion of e-vehicles in the motor-based Insurance Tax as of 1 April 2025: Electric vehicles (vehicles with zero CO2 emissions) are currently exempt from motor-based Insurance Tax (and Motor Vehicle Tax). In the future, the average tax level will be based on that of passenger vehicles with combustion engines. To further support the achievement of climate targets under tax law, however, this will be set below that. As with cars with combustion engines, taxation should take into account the engine power on the one hand and, on the other hand, the weight of the car due to the lack of CO2 emissions. By focusing on engine power and designing a graduated tariff, smaller and less powerful motor vehicles should be taxed less. This should generate additional revenue of around EUR 65 million by 2025.
• Increase in tobacco tax for cigarettes and heated tobacco as of 1 April 2025: In order to increase tobacco tax revenue, the tobacco tax on cigarettes is to be adjusted by suspending the reduction in the price element from 32% to 31.5% planned for 1 April 2025. Furthermore, the tobacco tax burden (incidence of tobacco tax) on heated tobacco is to be further aligned with that on cigarettes. The measures in the sector of tobacco tax are expected to generate additional revenues of up to EUR 50 million in 2025.
• Increase in the stability levy (bank levy): As banks have been able to benefit from high revenues due to the ECB’s historically strong interest rate hike cycle since 2022 and the asymmetric adjustments of lending and deposit rates, particularly in recent years, around half of the EU Member States have increased their bank taxes or introduced new ones. The tax rates of the ‘regular’ stability levy are to be increased in order to achieve additional revenue of around EUR 50 million. The previous system will not be changed. In addition, a special payment is to be provided for the years 2025 and 2026, which, similar to the regular stability levy, will have a two-tier tax rate. This is expected to generate around EUR 300 million per year.
• Extension of the energy crisis contribution for electricity and fossil fuels (site contribution of the energy industry): The energy crisis contribution for electricity was introduced at the end of 2022. The Federal Law on the Energy Crisis Contribution for Electricity (EKBSG) remains in force. According to the currently valid version, the last EKB-S collection period ended on 31 December 2024. The EKB-S is now to be extended for a further five collection periods (April 2025 to March 2026, April to March 2026 to 2030), with various parameters being adjusted to generate the corresponding tax revenue. In addition, the energy crisis contribution for fossil fuels (EKB-F) will be extended for a further five collection periods (April to December 2025, January to December 2026 to 2029). Overall, revenues of around EUR 200 million are expected for 2025 (from both funds).

The Bill must now receive approval from the upper house of parliament (Bundesrat).