New Austrian legislation on homeworking and its implications for payroll

On 24 February 2021, the Austrian National Council approved the 2nd COVID-19 Tax Measures Act, which provides for non-taxable reimbursement of costs by the employer and a flat rate deduction for business expenses for the employee if homeworking (so-called “home office”) has been agreed. After a year of working from home due to COVID-19, employees or works […]

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Austrian government confirms retroactive change to wage tax deduction for foreign employers

As reported in an earlier article (see blog post from 27.11.2020), the Austrian government announced in December that the wage tax withholding obligation for employers without a wage tax PE in Austria would be repealed with retroactive effect. In accordance with this draft, under the new rules these employers will no longer be required to […]

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Is Home Office the new Trojan Horse?

When the COVID-19 pandemic swept across Europe, more than a few companies faced a challenge that they had put off, or rather overslept, for far too long in the course of the highly discussed  digital transformation: Am I able to let all of my employees work from home ? Assuming that you have provided your […]

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Post-Brexit: Social security implications for cross-border employee assignments after the end of the transition period and recommended actions for employers

Situation to date The United Kingdom left the European Union on 31 January 2020. A Withdrawal Agreement was agreed between the UK and the EU, which entered into force on 1 February 2020, and established the terms of the UK’s orderly departure from the EU. The Withdrawal Agreement provides for a transition period, during which the EU […]

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Mandatory wage tax deduction for employers without a PE for wage tax purposes in Austria about to be revoked?

From 01.01.2020 on, employers of individuals subject to unlimited taxation in Austria are required to withhold Austrian wage tax. However, due to a legislative motion for the planned COVID-19 Tax Measures Act, which was submitted on 20 November 2020, this provision now seems likely to be – retroactively – revoked: Thus, foreign employers without a PE […]

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Current information on deferral of social security contributions

Employers who have been affected by business restrictions or closures due to the Austrian government directive, Austrian Federal Law Gazette (BGBl) II 2020/96, or a ban on access under the Austrian Epidemics Act (BGBl II 2020/74), have benefited since March 2020 from an automatic, interest-free deferral of payment of social security contributions for the contribution […]

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Austrian Federal Financial Court (BFG) ruling on exemption with progression in state of source

A recent decision of the Austrian Federal Financial Court (BFG) considered the question as to whether foreign income must be taken into account in Austria under an “exemption with progression” clause even if Austria is not the state of residence under treaty law. The BFG takes the view that in cases of unlimited tax liability […]

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BMF information on the application and interpretation of Double Tax Treaties

The COVID-19 pandemic has implications for the taxation of income of cross-border workers, as the allocation of taxation rights under tax treaties depends, among other things, on where the the activities are carried out. The duration of activities and the length of stay in a country are decisive factors for taxation and the creation of […]

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Back to business as usual?

These unprecedented times have brought insecurity and new risks. A variety of new measures have changed the way we live our lives. Most of us have never experienced anything like social distancing, a concept and approach which has significant implications for many working activities. Politicians and business leaders must take decisions which they have not […]

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COVID-19: Austria-Germany consultation agreement on cross-border working of 15 April 2020

On 16 April 2020, the Austrian Ministry of Finance (BMF) published a consultation agreement concluded between Austria and Germany (Decree of 15 April 2020, 2020-0.239.636, BMF-AV Nr. 55/2020). The goal of the agreement is to limit the individual impacts during the COVID-19 restrictions as far as possible for all employees who work cross-border between Austria […]

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