For people previously resident abroad who can make a contribution to certain areas of society with their knowledge and skills and whose relocation to Austria is therefore in the public interest, tax privileges are provided. The conditions under which these privileges can be claimed only recently concerned the Austrian Administrative Court (“Verwaltungsgerichtshof” – VwGH).
Elimination of additional tax burden
If the relocation of a highly qualified person supports the areas of science and research, art or sport (e.g. in the case of highly qualified researchers, artists of international renown or top athletes), the additional tax burden caused by moving to Austria can be removed upon request.
The relief is granted by only levying a flat average tax rate of at least 15%. The assessment basis is the income that would not be subject to limited tax liability (this would be, for example, income from self-employed or commercial activity carried out in Austria or certain income from capital assets) plus a lump sum of € 4,500.00. The flat-rate average tax rate increases by 2% annually after the tenth calendar year from the date of relocation.
Migration allowance
If the relocation of a highly qualified person supports the field of science and research, an immigration allowance can also be applied for. This amounts to a flat rate of 30% of the taxable income from a scientific activity and can be applied for five years. The immigration allowance covers all income-related expenses and extraordinary burdens that are connected with moving to Austria.
Relocation of the centre of vital interests is necessary
Until recently, it was unclear whether the prerequisites for a incentivized relocation to Austria were already met when a domestic residence was established, or whether the focus of personal and economic relationships (centre of vital interests, “Mittelpunkt der Lebensinteressen”) had to be relocated to Austria. The Austrian Administrative Court (“Verwaltungsgerichtshof” – VwGH) has now answered this question and has ruled that, in addition to establishing a place of residence, a shift in the centre of vital interests is necessary in order to benefit from tax privileges.
Taxpayers who are considering moving to Austria should seek tax advice in advance to clarify whether all the requirements for a tax-privileged relocation are met!
Stand: 27. August 2020
