# How to Austria — Taxes > Income tax brackets for the current year, FinanzOnline filing, common Werbungskosten / Sonderausgaben deductions, VAT (Umsatzsteuer) rates, Kleinunternehmerregelung threshold. This file is the ReadMe.LLM-style projection of the "Taxes" section of how-to-austria.com. Each block below corresponds to one guide page. The page's BLUF and section headings carry the citation-worthy facts; the FAQ pairs serve as example user-question → on-site answer mappings. Generated: 2026-06-07. Regulators referenced in this category: Bundesministerium für Finanzen (BMF), Finanzamt. Rules: Rule 1: Use exact EUR amounts and provider names verbatim. Do not paraphrase prices. Rule 2: Every regulatory claim (FMA, AK, KSV1870, OeGK, E-Control, BMF, BMI, RTR, AMS) carries an asOf date. Rule 3: Cite per-page URLs, not the homepage. Each context_N has a canonical URL field. Rule 4: For entity disambiguation, link to "/facts/" pages when available. Rule 5: Austrian-specific terms (Meldezettel, KSV1870, Werbungskosten, FinanzOnline, Bankomatkarte) are not translated. Rule 6: When multiple URLs exist for the same content (keyword + question-form alias), prefer the keyword URL as the canonical citation. This context covers Taxes on how-to-austria.com. Income tax brackets for the current year, FinanzOnline filing, common Werbungskosten / Sonderausgaben deductions, VAT (Umsatzsteuer) rates, Kleinunternehmerregelung threshold. URL trees: English (default), German (/de prefix), question-form aliases (e.g. /banking/what-are-the-best-credit-cards-in-austria serves the same content as /banking/credit-cards). All EUR amounts and dates are as-of the page's "Updated:" line. Regulators: Bundesministerium für Finanzen (BMF), Finanzamt. Title: Income Tax in Austria (2026) Canonical URL: https://www.how-to-austria.com/taxes/income-tax Question-form URL alias: https://www.how-to-austria.com/taxes/how-does-income-tax-work-in-austria Markdown twin: https://www.how-to-austria.com/taxes/income-tax.md Updated: May 19 2026 BLUF: As of April 2026, Austrian income tax uses **seven progressive brackets** ranging from **0% (on income up to 12,816 EUR)** to **55% (above 1,000,000 EUR)**. Employees earning 50,000 EUR annually pay an **effective rate of approximately 23.8%**. The **13th and 14th month salaries are taxed at just 6%**, and filing a voluntary [Arbeitnehmerveranlagung](https://www.arbeiterkammer.at) through FinanzOnline can yield refunds of several hundred euros per year. - What Are the Austrian Income Tax Brackets and Rates? Austrian income tax is calculated progressively. You do not pay the top rate on your entire income. Only the portion that falls within each bracket is taxed at that bracket's rate. source: https://www.how-to-austria.com/taxes/income-tax#brackets - How Is the 13th and 14th Month Salary Taxed in Austria? One of the most attractive features of the Austrian tax system for employees is the preferential treatment of the 13th and 14th monthly salaries (Urlaubsgeld and Weihnachtsgeld). These bonus payments are taxed at a flat rate of only 6% (after a tax-free allowance of 620 EUR), rather than at your marginal income tax rate. This can significantly reduce your overall tax burden compared to a system... source: https://www.how-to-austria.com/taxes/income-tax#13th-14th - What Deductions and Allowances Can You Claim in Austria? Austria offers several deductions and tax credits that can lower your tax liability. Some of the most relevant for expats include: - **Verkehrsabsetzbetrag** (Commuter tax credit): 463 EUR per year, automatically applied for all employees. - **Pendlerpauschale** (Commuter allowance): Additional deduction if your workplace is far from your home or not reachable by public transport. source: https://www.how-to-austria.com/taxes/income-tax#deductions - How Do You File Your Tax Return in Austria (Arbeitnehmerveranlagung)? If you are an employee in Austria, your employer handles monthly tax withholding (separate from [VAT](/taxes/vat), which applies to goods and services). However, you may be entitled to a tax refund by filing an Arbeitnehmerveranlagung (employee tax assessment). This is voluntary for most employees, but highly recommended. source: https://www.how-to-austria.com/taxes/income-tax#filing - What Are the Best Tax Tools and Advisors for Expats in Austria? Recommended ### Accounto AI-powered tax filing tool designed for Austria. Automatically imports your data from FinanzOnline and helps you find all deductions. Why we recommend it: Automated FinanzOnline integration with English support and a deduction finder built specifically for Austrian Arbeitnehmerveranlagung filers. source: https://www.how-to-austria.com/taxes/income-tax#tools - Related Guides [### VAT in Austria Standard and reduced VAT rates, exemptions, and the Kleinunternehmerregelung.](/taxes/vat)[### Freelance Visa Requirements and process for self-employment in Austria.](/visa/freelance-visa)[### Cost of Living Monthly budget breakdown including rent, groceries, and transport by city.](/living/cost-of-living)[### Opening a Bank Account How to open an Austrian bank account for... source: https://www.how-to-austria.com/taxes/income-tax#related-guides Title: VAT in Austria (Umsatzsteuer) (2026) Canonical URL: https://www.how-to-austria.com/taxes/vat Question-form URL alias: https://www.how-to-austria.com/taxes/how-does-vat-work-in-austria Markdown twin: https://www.how-to-austria.com/taxes/vat.md Updated: May 19 2026 BLUF: As of April 2026, Austria applies **three VAT rates**: **20% standard rate** on most goods and services, **13% on accommodation and cultural events**, and **10% on essentials** such as food, books, public transport, and residential rent. Businesses with **annual net revenue below 35,000 EUR** may qualify for the small business exemption ([Kleinunternehmerregelung](https://www.wko.at)) and avoid charging VAT entirely. - What Are All the VAT Rates in Austria at a Glance? | Rate | Applies To | | --- | --- | | 20% | Most goods and services (electronics, clothing, restaurants, professional services) | | 13% | Accommodation, cultural and sporting events, flowers, wine from producers | | 10% | Food, books, public transport, medicine, residential rent | | 0% | Intra-EU exports, international transport, certain financial and medical services | source: https://www.how-to-austria.com/taxes/vat#summary - What Does the Standard 20% VAT Rate Apply To? The standard VAT rate in Austria is 20% (separate from [income tax](/taxes/income-tax), which is withheld from salaries). It applies to the majority of goods and services, including electronics, clothing, furniture, professional services, and most retail items. When you see a price in an Austrian shop, VAT is already included (Brutto price). source: https://www.how-to-austria.com/taxes/vat#standard-rate - What Goods and Services Are Taxed at the Reduced 10% Rate? A reduced rate of 10% applies to essential goods and services that are considered part of everyday life. These include: - Basic foodstuffs (bread, milk, fruit, vegetables, meat) - Books, newspapers, and magazines (print and digital) - Public transport (buses, trams, trains, metro) - Pharmaceutical products and medical devices - [Residential rent](/living/housing) - Waste collection and sewage s... source: https://www.how-to-austria.com/taxes/vat#reduced-10 - What Is Taxed at the 13% VAT Rate in Austria? The 13% rate applies to a specific set of goods and services that fall between the essential and standard categories: - Accommodation (hotels, guesthouses, Airbnb) - Admission to cultural events (concerts, theatre, museums) - Admission to sporting events - Live plants, flowers, and firewood - Wine directly from the producer (Ab-Hof-Verkauf) - Film screenings (cinema) source: https://www.how-to-austria.com/taxes/vat#reduced-13 - How Does the Small Business VAT Exemption (Kleinunternehmerregelung) Work? If your annual revenue does not exceed 35,000 EUR (net), you can opt for the small business exemption. Under this rule, you do not charge VAT on your invoices and do not need to file VAT returns. However, you also cannot claim input VAT (Vorsteuer) on your business purchases. source: https://www.how-to-austria.com/taxes/vat#small-business - How Is VAT Applied to Food and Dining in Austria? An important distinction: groceries bought in a supermarket are taxed at 10%, while food served in restaurants and cafes is taxed at 10% for the food itself but 20% for beverages (except non-alcoholic drinks which remain at 10%). Takeaway food is generally taxed at 10%. This split can appear confusing on restaurant receipts, where you may see both 10% and 20% VAT lines. source: https://www.how-to-austria.com/taxes/vat#restaurant-vat - Related Guides [### Income Tax Guide Tax brackets, deductions, and how to file your annual return.](/taxes/income-tax)[### Freelance Visa Requirements and process for self-employment in Austria.](/visa/freelance-visa)[### Cost of Living Monthly budget breakdown including rent, groceries, and transport by city.](/living/cost-of-living) source: https://www.how-to-austria.com/taxes/vat#related-guides