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How to prepare for your Austrian tax return if you’re self-employed

For self-employed people in Austria, preparing for a tax return can be a daunting process, but a little preparation can help to bring the stress levels down.

Paperwork
It's time to get out the calculator and your expense receipts... and/or hire a tax advisor. Photo: Scott Graham/Unsplash

Filing a tax return is a necessary part of self-employment and it’s no different in Austria.

Trying to understand the Austrian tax system can be complicated though, and even more so for those without strong German language skills.

To find out more, The Local spoke to Claudia Barton, a bilingual (German and English) tax advisor based in Vienna. 

Start early

Austria’s tax year runs from January to December so self-employed people should start preparing their accounts now to ensure they are ready to be filed in January.

Claudia told The Local: “The best way to prepare for the tax return is to gather all documents in advance, such as invoices that have been charged to clients and expense receipts.

“People should also go through their bank statements to make sure everything in the tax return is recorded, including any charitable donations or medical bills, although adding medical bills to a tax return will depend on the overall income.”

FOR MEMBERS: EXPLAINED: What can I deduct from my tax bill in Austria?

Examples of expenses that can be included in a tax return are office materials, stationary, internet, phone, hardware, software, books, rent (eg. an office or business premises) and even German language lessons.

Other eligible expenses include travel costs for business trips (car mileage and other forms of transportation), ergonomic office furniture up to €150 and costs associated with working from home, although the rules surrounding the latter can be difficult to understand.

Claudia said: “It’s a grey area. For example, electricity costs in your apartment can only be claimed if that is the central area of your business – where the work takes place.”

This means a self-employed writer or a business coach that works from home can claim a percentage of electricity costs as an expense. But a self-employed language teacher that works at a school probably can’t claim home electricity bills as an expense.

Also, SVS payments (social insurance for self-employed people) are tax deductible and Claudia advises that all outstanding SVS bills are paid before the end of the year.

The most common mistakes when filing a tax return

One of the most common mistakes that people make before submitting a tax return is not checking whether it is more favourable to select a lump sum expense deduction or to claim back the amount for every individual expense.

A lump sum deduction (Betriebsausgabenpauschalierung) is a flat rate amount of 6 percent or 12 percent, as long as the annual revenue does not exceed €220,000. SVS contributions can still be deducted on top of the flat rate.

Additionally, since 2020, it has been possible for service providers to apply a 20 percent flat tax rate for expenses, or 45 percent for other businesses. This applies to businesses with an annual revenue up to €35,000.

READ MORE: Everything you need to know about paying tax in Austria

At the beginning of 2021, this rule was then connected to the VAT exemption for small businesses (this is also applicable even if the small business “opts to apply VAT”), and can therefore be applied up to a revenue of €42,000.  

There is an upper limit of €8,400 for expenses which can be deducted for businesses which provide services and an upper limit of €18,900 for other businesses. 

Alternatively, you can go down the traditional expenses route which is to collect all receipts for expenses throughout the year, then subtract the total expense amount from the annual revenue to get your actual profit.

And if all of this makes your head spin, then consider hiring a tax advisor.

How much does it cost to hire a tax advisor for a tax return?

Rates for hiring a tax advisor vary from person to person and mostly depend on the amount of work required to complete and file the tax return.

Claudia said: “For a one-person business, the average cost of hiring a tax accountant for a tax return is between €400 and €900, but the actual cost will depend on the complexity.

“And don’t forget, the cost of hiring an accountant is tax deductible and can be included in your expenses the following year.”

For example, hiring an accountant for the 2021 tax return can be included in expenses for the 2022 tax return because the work will be carried out in 2022.

FOR MEMBERS: How much money do people earn in Austria – and which jobs are the best paid?

Are there any specific new tax laws to consider?

If the topic of tax wasn’t complicated enough already, most years there are also new laws to understand as well.

Thankfully, this year isn’t one of them with most changes related to Covid-19 subsidies for businesses.

Claudia said: “In 2021, changes to tax law were almost non-existent due to Covid regulations but I would still advise people to check if they are eligible for subsidies because some are still open for applications.  

“Most of these applications must be filed by a tax advisor and the subsidies can be hard to understand, so I advise people to seek help from a tax advisor.

“Austrian tax laws are hard to understand and you can’t properly file a tax return without fully understanding the system.”

However, for anyone that does want to file a tax return themselves, this can be done via the FinanzOnline platform.

Useful vocabulary

Tax – Steuer

Steuerberater/ Steuerberaterin – Male tax adviser/ Female tax adviser

Flat tax deduction rate – Betriebsausgabenpauschalierung

Tax-free profit allowance  – Grundfreibetrag

Business assets – Gewinnfreibetrag 

New self-employed – Neue Selbständige

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For members

JOBS

EXPLAINED: How to find a summer job in Austria?

Though Austria is mainly known for its winter resorts, there is no shortage of possibilities for those looking for seasonal jobs in summer.

EXPLAINED: How to find a summer job in Austria?

Summer is coming up, and those few hot months are a perfect opportunity for many people to get a seasonal job and earn some extra cash.

Austria’s economy is heavily based on tourism. But even though the winter resorts and sports are what the alpine country is most well-known for, the summer months are also hectic in the tourism and gastronomy sectors.

The demand for seasonal workers usually is high but has increased even more in the last few years. According to the Austrian employment agency AMS, there are more than 15,000 open positions in gastronomy and tourism still lacking workers.

The pandemic widened the gap, as the sector was hardly hit by lockdowns and changes in consumer behaviour. With coronavirus restrictions, the field lost some of its attraction. It is still having trouble finding new labour, AMS boss Johannes Kopf told broadcaster ORF.

A summer without coronavirus restrictions

However, for the first time since the pandemic started, Austria will see a summer with almost no coronavirus restrictions.

The country has recently dropped its 3G rule for entry for travellers, meaning that tourists (and residents) no longer have to show proof that they were vaccinated against Covid-19, recently recovered from the disease or tested negative.

The expectation is high that this will boost tourism, especially as the 3G rules and the mask mandate also fell in most indoor areas.

READ MORE: LATEST: What are Austria’s current Covid-19 rules?

Last year, even with some restrictions still in place, the sector saw a recovery compared to 2020 but was still not at pre-pandemic levels, according to Statistik Austria.

Still, the May to October season had more than 66 million overnight stays, with almost half of them (42.7 per cent) coming from Germany.

From imperial cities to lakes and mountains, Austria has no shortage of offers during summer. As travelling resumes, the sector is desperately looking for workers.

vienna, pratter

Vienna is big touristic destination also during summer months (Photo by Anton on Unsplash)

Where can I find summer jobs in Austria?

The capital is undoubtedly where most visitors come, according to Statistik Austria. However, it is also where many establishments have a year-round crew, and seasonal work might not be as easy to find.

It is far from impossible, though, and it is worth the search if you have your eyes set on Vienna.

READ ALSO: One day in Vienna: How to spend 24 hours in the Austrian capital

However, other major Austrian cities also have openings, most notably the touristic towns of and around Innsbruck and Salzburg. Of course, the mountainous region of Austria might be most famous for its ski slopes. Still, they also offer breathtaking summer views, cool and beautiful alpine lakes, and numerous hiking trails.

Plus excellent hotels for people to stay in and great Austrian restaurants – all looking for employees.

What types of jobs are available?

There are many job openings to skim through, but most will be the most traditional service work in tourism and gastronomy: waitressing, housekeeping, cooking, and reception.

If you look outside of Vienna, several professions in the tourism and gastronomy sector are included in Austria’s list of shortage occupations.

READ ALSO: How Austria is making it easier for non-EU workers to get residence permits

Those include some surprising ones like department store sales clerks, waiters and waitresses, masseuses, and others. If you don’t have a right to work in Austria (non-EU citizens without a work permit, for example), being skilled in a shortage occupation makes it easier to be hired and get a residence permit.

Most of these jobs will require a certain level of German, especially since Germans are an overwhelming part of tourists entering Austria. However, the high demand for workers might help those who do not speak the language yet, especially for positions that don’t require much customer interaction.

READ ALSO: Austria: Six German expressions to entice your Wanderlust

Another popular job for summer is instructor, or caretaker, in summer camps. As many of them are bilingual or in English, German is not usually a mandatory language – there are also positions for English teachers, especially in camps and schools with summer courses.

Where can I find these jobs?

As with most industries and professions, searching online is usually the first step in finding a summer job in Austria.

Outside of known employment platforms such as Glassdoor and LinkedIn, Austria’s Karriere.at might be a good place to look.

READ ALSO: Six official websites to know if you’re planning to work in Austria

Hogastjob is also a local platform with plenty of seasonal offers in Austria, Germany and Italy (South Tyrol region).

Another approach is to contact resorts or hotels directly to find out when they are hiring for the summer season and the types of roles that will be available – they should also have a job vacancies page on official websites that you can check.

Or get in touch with friends that have previously worked in the summer season in Austria and ask for a recommendation.

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