Austria’s Federal Council (Bundesrat) approved the Tax Amendment Act 2024 (AbgÄG 2024) on 11 July 2024, following its earlier approval by the National Council (lower house of parliament). The Act introduces several changes, particularly to Value Added Tax (VAT).

Austria is set to implement several changes to its VAT policy aimed at benefiting small businesses and charitable organisations. The turnover threshold for the VAT exemption scheme for small businesses will be increased from EUR 35,000 to EUR 42,000. Additionally, food donations to charitable organisations will be exempted from VAT. The VAT exemption scheme will also be extended to small businesses from other EU Member States, provided their turnover in Austria does not exceed EUR 42,000 and their total EU turnover does not exceed EUR 100,000.

Additionally, the Act amends the Minimum Taxation Reform Act (MinBestRefG) to align with the latest OECD guidance on temporary safe harbour rules for the Pillar Two global minimum tax issued in December 2023.

Other measures include creating the possibility to convert virtual company shares into start-up employee participation, expansion of the possibility of simplified invoicing (small-amount invoices) for small businesses, extension of the exemption from the 10% limit for the transfer of direct benefit commitments to pension funds; expansion of the possibility of an employee tax assessment without application, issuance of exemption notices only upon application, introduction of a rule that the subsequent transmission of a (corrected) pay slip constitutes a retroactive event, fee exemption for digital supplements that have already been submitted and charged for in analog form, flat-rate fees for digitally issued certificates, introduction of a withholding tax with final taxation effect on income from compensation payments due to measures to prevent flood damage, and regulation on the non-deductibility of losses in the event of a gradual expansion of the group of companies.