Tux Cuts Planned for Austria

September 29, 2014 Taxation in Austria

Tax cuts in AustriaVIENNA – Individuals in Austria will almost certainly enjoy a tax cut by the end of 2016, although the government has not specified how it will funds such cuts.

Over the weekend at a conference held in Schladming the ruling Social Democrats (SPO) party of Austria proposed that at least EUR 5 billion of new tax relief should be provided to taxpayers in 2016.

The tax reduction will come primarily in the form of a cut to the rate of personal income taxes from 36.5 percent to 25 percent for incomes exceeding EUR 11 000, with further tax cuts to be potentially implemented after 2018.

So far no details have been released on how the tax will be funded, but political experts have noted that there is a difference of opinion on this matter between the SPO and its coalition partner People’s Party (OVP), as the SPO is calling for the imposition of a wealth tax to raise the funds, while the OVP is suggesting that the government need to reduce spending and expenditure in order to free the necessary money.

Despite the difference on opinion, both parties have agreed that the tax cuts cannot be funded via more debts, as national debt has already reached 80 percent of the national GDP.

Photo By: Thomas Quine