Specific taxes in Austria 2026: VAT, property, payroll and more

Last reviewed: November 2026 · Reviewed by Stéphane Gombauld, tax expert, technologist and digital nomad

You know Austria's income tax is steep. What catches people are the taxes around it: VAT when you invoice, transfer tax when you buy a flat, withholding on investments and duties on contracts. This guide lists the specific taxes that matter to freelancers, founders and investors in 2026, with rates, thresholds and who pays.

Austria specific taxes in 2026: the key figures

What changed for 2026

• New 4.9% VAT rate. From 1 July 2026, selected basic foods (dairy, eggs, vegetables, fruit, rice, flour, plain pasta, bread, salt) drop from 10% to 4.9%. Restaurant meals are excluded (BGBl. I Nr. 37/2026 on oesterreich.gv.at).
• Higher payroll contribution ceiling. Social security is levied on gross salary up to EUR 6,930 a month in 2026, up from EUR 6,450 (PwC, secondary).
• NoVA relief for cross-border leasing. From 1 July 2026, the car registration tax for vehicles leased from another EU/EEA state can be reduced at registration.

Is this guide for you?

Read on if you…

• freelance or run a company in Austria and need the taxes beyond income tax
• plan to buy, rent out or sell Austrian property
• invest from Austria and want the withholding rates in one place

Probably not your case if you…

• only need personal income tax brackets (see the Austria tax landscape overview)
• are a visitor with no Austrian income or assets

How does VAT work in Austria for freelancers and small businesses?

Austrian VAT (Umsatzsteuer, USt) has a 20% standard rate under the UStG 1994. The Business Service Portal (USP) lists the reduced rates:

• 10%: residential lettings, furnished accommodation, books, newspapers, food not covered by 4.9%, waste collection.
• 13%: live animals and plants, firewood, artists' services, film and circus shows, sports event tickets.
• 4.9%: the selected basic foods listed above, since 1 July 2026.

The small-business exemption (Kleinunternehmer)

If your turnover stays at or below EUR 55,000 a year, you charge no VAT and recover no input VAT. If you cross the limit by no more than 10%, the exemption still applies for the rest of that year. Cross it by more, and it ends immediately, with the transaction that breaks the limit. Either way, it is gone the following year (USP Kleinunternehmen).

For many digital freelancers the exemption is a false friend. Foreign B2B clients self-assess VAT anyway, while you lose input VAT on your laptop and software. You can waive the exemption in writing. The waiver binds you for five years.

Cross-border services

• B2B services to EU businesses: generally no Austrian VAT; the client self-assesses under the reverse charge. You need a VAT ID (UID number) and file a recapitulative statement.
• B2C digital services to EU consumers: generally VAT of the customer's country, declared through the One-Stop-Shop (OSS).
• Clients outside the EU: usually no Austrian VAT on B2B services.

Filing

Advance returns (UVA) are quarterly if last year's turnover was EUR 100,000 or less, otherwise monthly. Each UVA and payment is due on the 15th of the second following month. The annual return is due by 30 April, or 30 June when filed via FinanzOnline (USP).

Which taxes hit property buyers, owners and sellers?

Austria taxes property mainly at transaction time, not while you hold it.

1. Real estate transfer tax (Grunderwerbsteuer). Generally 3.5%. Family and gratuitous transfers use a stepped scale on the property value: 0.5% on the first EUR 250,000, 2% on the next EUR 150,000, 3.5% above (USP). A notary or lawyer files it via FinanzOnline.
2. Share deals. Transferring at least 75% of a property-owning company's shares to new partners within seven years, or uniting 75% in one hand, is taxable. The rate is 0.5% of the property value, or 3.5% of market value for real estate companies.
3. Annual property tax (Grundsteuer). Levied by the municipality on the old assessed value (Einheitswert), with a multiplier of up to 500%. Bills above EUR 75 are paid quarterly (USP Grundsteuer).
4. Rent. Rental income is taxed at your progressive rate. Residential lettings carry 10% VAT if you are not a small business.
5. Selling: real estate income tax (ImmoESt). 30% on the gain, withheld by the notary or lawyer as a final tax. You can opt for your lower progressive rate (oesterreich.gv.at).

Two exemptions matter most. Your main home is exempt if you lived there continuously for two years since purchase, or for five of the last ten years. A house you built yourself is exempt for the building, not the land.

Property bought before 31 March 2002 (Alt-Grundstücke) can use a lump sum instead of real costs. The official portal still shows a deemed gain of 14% of the price (an effective 4.2%), or 60% for rezoned land (18%). The § 30(4) EStG text in force since 30 July 2026 raises this to 20% and 70%: an effective 6% and 21%. Land rezoned after 2024 and sold after 30 June 2025 also bears a 30% surcharge on the gain. Your sale date decides which version applies.

What withholding and investment taxes apply?

The capital income tax (Kapitalertragsteuer, KESt) is a final withholding tax. Austrian banks deduct it; the income is then settled (BMF).

• 27.5% on dividends, bond interest and gains on shares and securitised derivatives.
• 25% on interest from savings and current accounts.
• 27.5% on crypto acquired after 28 February 2021. Crypto-to-crypto swaps are not taxable. Austrian providers withhold KESt on income after 31 December 2023.

You may opt for progressive taxation, but only for all capital income together. Details in capital gains tax in Austria and cryptocurrency taxes in Austria.

Companies withhold 27.5% KESt on dividends to individuals. With 23% corporate tax, distributed profit bears 44.175% in total; see corporate income taxes in Austria.

Which payroll, business and consumption taxes should founders budget for?

Payroll levies (employers)

• Municipal tax: 3% of monthly gross wages, paid to the municipality by the 15th of the following month. Annual return by 31 March (USP).
• Family fund levy (Dienstgeberbeitrag): 3.7% of payroll since 1 January 2025, down from 3.9% (PwC, secondary).
• Social security: 20.98% employer and 18.07% employee on current pay, up to the EUR 6,930 monthly ceiling (PwC, secondary).

Contracts, advertising and cars

• Lease duty (Gebühr). 1% of the rent value on lease contracts, self-assessed by the landlord by the 15th of the second following month. Residential leases are exempt. For open-ended leases, three years of rent is the base (USP).
• Advertising tax (Werbeabgabe). 5% on print, radio, TV and outdoor ads, exempt while taxable fees stay below EUR 10,000 a year.
• Digital tax. 5% on Austrian online advertising revenue, only for the large groups in the table above.
• Car registration tax (NoVA). Based on CO₂ emissions; electric vehicles are exempt.
• Motor-related insurance tax. Paid with your car insurance. Electric cars pay it too, based on motor output and weight.

What Austria does not have

No wealth tax, no inheritance tax and no gift tax. Instead, gifts must be reported to the tax office within three months under § 121a BAO. Exempt from reporting: gifts between relatives up to EUR 50,000 within one year, and between others up to EUR 15,000 within five years. Intentionally skipping the report risks a fine of up to 10% of the gift (BMF).

Common mistakes (and what they cost)

• Keeping the small-business exemption by habit → with mostly foreign B2B clients, you forfeit all input VAT on equipment and software.
• Crossing EUR 55,000 by more than 10% unnoticed → the exemption ends with that invoice, and VAT is due on that and every later sale.
• Budgeting a flat without transfer tax → 3.5% adds EUR 14,000 on a EUR 400,000 purchase, before notary and agent fees.
• Selling a second home before checking ImmoESt → 30% of the gain, withheld at closing; only a main home that meets the two-year or five-of-ten rule is exempt.
• Not reporting a large family gift → no tax is due, but a deliberate omission risks a fine of up to 10% of its value under the tax fraud regulations of Austria.

Frequently asked questions

What is the VAT rate in Austria in 2026?

The standard rate is 20%. A 10% rate covers residential rent, accommodation, books and newspapers. A 13% rate covers artists, film shows, sports tickets and live plants. Since 1 July 2026, selected basic foods such as bread, milk, eggs, vegetables and fruit are taxed at 4.9%.

Does Austria have a wealth tax or inheritance tax?

No. Austria has no inheritance, gift or wealth tax in 2026. Gifts must still be reported to the tax office within three months, unless they stay within EUR 50,000 a year between relatives or EUR 15,000 over five years between others. Inherited property can still trigger real estate transfer tax.

How much tax do you pay when buying property in Austria?

Real estate transfer tax is 3.5% of the price for a standard purchase. On a EUR 400,000 apartment, that is EUR 14,000. Within the family, a stepped scale of 0.5%, 2% and 3.5% applies to the property value. Land register, notary and agent fees come on top.

What is the Kleinunternehmer limit in Austria?

EUR 55,000 of annual turnover. Below it, you charge no VAT and recover no input VAT. Exceeding it by up to 10% keeps the exemption for that year; exceeding it by more ends it immediately. You can waive the exemption in writing, which binds you for five years.

Is there a tax on dividends in Austria?

Yes. Dividends carry 27.5% KESt, withheld at source and final for Austrian residents. Foreign dividends are taxed at the same rate through your return, with any foreign withholding credited under the relevant treaty. Non-residents may reduce Austrian withholding under a tax treaty; see international tax treaties of Austria.

Do I pay municipal tax as a freelancer in Austria?

Not on your own profit. Municipal tax is 3% of wages paid to employees in Austrian establishments, so it starts once you hire. A GmbH paying salaries owes it on that payroll, which is one cost to weigh in legal forms of business in Austria.

Related guides

• Austria tax landscape overview
• Capital gains tax in Austria
• Cryptocurrency taxes in Austria
• Corporate income taxes in Austria
• Specific taxes applicable in Malta
• Specific taxes in Switzerland
• All country tax guides

Sources

• Steuersätze und Steuerbefreiungen der Umsatzsteuer – Business Service Portal (USP)
• Kleinunternehmen (VAT) – USP
• Umsatzsteuergesetz amendment, BGBl. I Nr. 37/2026 – oesterreich.gv.at
• Grunderwerbsteuer – USP
• Immobilienertragsteuer – oesterreich.gv.at
• Besteuerung inländischer Kapitalerträge – Federal Ministry of Finance (BMF)
• Schenkungsmeldung – BMF
• Austria – Corporate – Other taxes – PwC Worldwide Tax Summaries (secondary)
• EStG § 30 consolidated text – JUSLINE (secondary)

This guide is general information, not personalised tax advice. See how we research and review.