Impact of the Amendment to the Austrian income tax act on Slovak companies
From January 2020, employers, who employ Austrian tax residents will be required to register for Austrian taxes and withhold Austrian wage tax from their salaries. The new legislation could have an impact on Slovak companies employing persons living in Austria.
According to amended legislation effective from January 2020, employers, who employ Austrian tax residents subject to unlimited taxation, will be required to register for Austrian taxes and withhold Austrian wage tax from their salaries. Until the end of 2019 such obligation applied only on companies having permanent establishment for wage tax purposes in Austria.
An individual is subject to unlimited taxation in Austria if he/she has a residence or habitual abode in Austria. According to the amendment, employers without permanent establishment for wage tax purposes but employing Austrian tax residents will have several obligations. For more information please follow the link: https://home.kpmg/xx/en/home/insights/2019/11/flash-alert-2019-175.html
Recently, a new information of the Austrian Tax Administration was published according to which the foreign employer is obliged to withhold wage taxes only if the salary is taxable in Austria according to the respective Double Tax Avoidance Treaty. Moreover, it is expected that the Tax Administration will issue additional guidance with respect to calculation of prepayments from income taxable in Austria (e.g. in case of a home office in Austria or business trips in Austria).
The new legislation could have an impact on Slovak companies employing persons living in Austria. Many Slovak citizens employed by Slovak companies live in Austria near the borders. Should you or your company be impacted by the Austrian amendment and need further assistance, please contact us.