Draft bill introduces income tax inflation adjustments and updates to global minimum tax rules, with consultation open until 3 November 2025.
The Austrian Ministry of Finance (MOF) has released the draft Tax Amendment Act 2025 (Abgabenänderungsgesetz 2025) for public consultation, which is open until 3 November 2025. The bill proposes changes to various tax laws to align with EU requirements, simplify administration, and ensure legal certainty.
The draft act updates Austria’s implementation of Pillar 2 global minimum tax rules, clarifying definitions and treatment of transparent, hybrid, and reverse hybrid entities. It simplifies the calculation of deferred taxes, safe harbors, and allocations of CFC taxes. These updates apply to financial years starting on or after 31 December 2023.
A key measure includes adjustments to individual income tax for 2026, with an increase of the basic allowance from EUR 13,308 to EUR 13,539 and updated tax brackets ranging from 0% to 55%. Various tax credits, such as those for sole earners, alimony, and retirement, will also be adjusted for inflation.
Other changes include revisions to the Minimum Tax Act, the Tobacco Monopoly Act for e-liquids and temporary hemp licenses, and administrative modifications to the Federal Tax Code, Insurance Tax Act, and Fire Protection Tax Act. Most measures will enter into force in 2026 and 2027.
Stakeholders can review the draft legislation in German and submit comments during the consultation period.
