27 November 2023
Employment Tax
Austria | Parliament passes bills on tax measures for 2024 budget
Impact High
Summary
The Austrian lower house of parliament (Nationalrat) November 21 passed Bill Nos. 2267 db and 2217 db, to implement measures accompanying the 2024 budget.
The bills include measures to:
1) Increase the annual limit for payroll tax liability to 13,981 euros from 12,756 euros and increase deductions by 9.9 percent.
2) Temporarily expand monthly tax-free overtime hours to 18 hours from 10 hours, increase the profit allowance, and extend home office regulations.
3) Temporarily exempt small photovoltaic systems from sales tax and amend provisions to apply tax benefits to specific installations.
4) Expand tax incentives for company childcare and increase employer subsidies to 2,000 euros per year from 1,000 euros (US$1,090) per year.
5) Reduce unemployment insurance contributions by 0.1 percent.
6) Increase employer contributions for part-time employees.
The Detail
This bill is intended to increase federal youth funding for extracurricular child and youth work by approximately 9.7% in the 2024 budget year. This is a cost-of-living adjustment due to the extraordinarily high inflation rate that has affected Austria, like many other countries in the euro zone and worldwide, since 2022. In order to cope with inflation, which also represents a major challenge for young people, low threshold help, and support is important. The nationwide low- threshold youth work structures in Austria serve as a safety net in these stressful situations.
Inflation also affects extracurricular child and youth work, which is confronted with noticeable price increases in a wide variety of areas. Rising energy costs, general inflation and rising personnel costs are putting them under economic pressure. In addition, there is a professionalization of extracurricular child and youth work, which is accompanied by increasing funding needs, especially in the personnel area. The financial incentives provided by this planned change in the law are intended to make it easier for extracurricular child and youth work to cushion the consequences of this period of hyperinflation. After last year’s increase in federal youth funding for association organizations by around 20% through the Budget Accompanying Act 2023, Federal Law Gazette I No. 185/2022, the cost-of-living compensation should go to all organizations this year.
The government program 2020-2024 (“Responsibility for Austria”) stipulates that “children and young people should grow into self-responsible citizens. It is therefore important to promote active participation in social and democratic processes and to give them the necessary tools for this.” The aim of child and youth work is to contribute to the personal development of young people. To achieve this, it should be based on the interests of young people and be co- determined and shaped by them. This empowers young people to exercise self-determination and encourages them to share social responsibility and social commitment.
Contact us
For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:
Olivia Stiedl
Partner
olivia.v.stiedl@vialto.com
Evelyn Kappel
Senior Manager
evelyn.v.kappel@vialto.com
Petra Vrignaud
Senior Manager
petra.v.vrignaud@vialto.com
Susanne Voss
Manager
susanne.v.voss@vialto.com
Petra Demel
Manager
petra.v.demel@vialto.com
Further information on Vialto Partners can be found here: www.vialtopartners.com