The Austrian Ministry of Finance published a report by the Tax Reform Commission on 12 January 2015. The Tax Reform Commission consists of members from the coalition parties and the report was prepared in 2014.
The report comprises several proposals for the simplification and harmonization of tax laws in Austria. One of the important items suggested in the report is the provision of tax relief for lower income earners and families. In order to achieve this, it is suggested that the initial tax rate for the lowest bracket should be reduced from the current 36.5% to 25%. It is further suggested to increase the amount to which the maximum tax rate applies from the current EUR 60,000 to EUR 80,000 or EUR 100,000. In addition, the report provides suggestions to increase the child allowance and the deductibility of childcare expenses. Another aim of the planned tax reform is the harmonization of the assessment basis for tax and social security contributions.
Regarding international tax matters, the report considers amendments to the exit tax rules, incentives to promote research and development activities, and an expansion of the advance ruling practice.
It is intended that a draft bill on the tax reform will be presented to the government in March 2015.
