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TAXES

How to (legally) avoid paying the ORF TV and radio fee in Austria?

Austria is instituting an 'ORF fee' to support the public broadcaster that every household will have to pay from 2024. But is there any way to avoid the payment?

Published: 2 May 2023 15:43 CEST
TV remote
Austrian public broadcaster ORF has argued that the online availability of its programming means everyone should have to pay the TV licence fee. Photo by Chris DELMAS / AFP

Starting in 2024, every household in Austria will need to pay €15.30 for the ORF fee, replacing the current “GIS fee”, which was only applicable to homes with a television or radio device.

However, this new fee will be increased by province-level taxes, except in Lower Austria, Upper Austria, and Vorarlberg, where regional governments have announced that they will waive the tax. Salzburg is also reportedly considering the possibility of waiving the fee.

You can check out more about how much the fee will cost in each province HERE.

The changes are coming after a Constitutional Court decision on the previous GIS fee. Currently, only homes that have a TV or radio device have to pay for it. However, anyone who has internet access can find and watch content produced by the public broadcaster online. Austria’s highest court decided that this was unconstitutional – unfair to those who pay the fee – and told the country’s politicians to devise a solution by 2024.

READ ALSO: What is the new ORF TV licence fee every household in Austria will have to pay?

Several ideas were debated, but the Austrian government finally agreed on a common (lower) household fee that every single home in the country would have to pay. Instead of the GIS tariff, people would have to pay for the ORF fee regardless of whether or not they have a television or radio set.

With a few exceptions.

Can I avoid paying the ORF fee?

The ORF fee is just as controversial as the GIS, with many people in Austria voicing that they’d rather not pay for a service they don’t use. Previously, those people had the choice of not buying a television (instead watching streaming services on a laptop, monitor or projector). They could also pay for a specialised service that removes the reception device on a TV, allowing it to access ORF broadcast.

Now, all of that is off the table.

The only exceptions are those that already existed with the GIS. So, a net household income for one person that does not exceed € 1,243.49 (2023 numbers) or net income up to € 1,961.75 for two persons in a household and € 191.87 per additional person would be exempt.

With the appropriate proof, the unemployed, the deaf or recipients of childcare allowance subsidies are also exempt.

BACKGROUND: Austria set to make TV and radio fees mandatory for everyone

Also exempt, according to the GIS, are “recipients of benefits from other public funds due to need for social assistance,” including recipients of basic benefits, those doing community service or those exempt from prescription charges.

In addition, recipients of minimum income support, long-term care benefits, student or pupil benefits and pensioners are also exempt – if they do not exceed the income mentioned above.

Other exemptions are to secondary homes, as the new fee will only apply to primary residences.

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WORKING IN AUSTRIA

Why are people in Austria paying more taxes despite federal reforms?

Workers in Austria are still among those with the highest tax burdens in the world, with the taxes and contributions taking more than 40 percent of wages even as the country introduced sweeping tax reforms.

Published: 26 April 2024 12:21 CEST
Updated: 16 May 2024 14:01 CEST
Why are people in Austria paying more taxes despite federal reforms?

It’s often said that Austria is a country with high quality of living and high taxes, but a new OECD study shows just how high the tax burden is here compared to other OECD countries.

According to the report, Austria has the third-highest tax burden on workers and the so-called “tax wedge”, how much of a worker’s wage is taken by the government,  increased as well.

According to the OECD, in most countries, the increase in labour taxation was primarily driven by increases in personal income tax.

This is because nominal wages increased in 37 out of 38 OECD countries as inflation remained above historic levels. However, since most of these countries do not have automatic indexation of tax systems, high inflation tends to increase workers’ tax liabilities by pushing them into higher tax brackets. 

However, Austria’s federal tax reforms removed this in the country in 2023. This means that once inflation rises, the tax brackets that define how much taxes you will pay on your income will also rise – and they have risen in 2023 and in 2024 since the change. 

The measure was known as the “end of the cold progression” in Austria and should have protected workers’ incomes from inflation losses.

READ ALSO: The tax benefits that parents and families receive in Austria

What is the tax ‘wedge’?

The OECD defines a tax wedge as “income tax plus employee and employer social security contributions, minus cash benefits.” 

In other words, if an employer has a labour cost of €100, how much will they actually see in their pockets, and how much of this goes to the state? According to the organisation, the percentage is the tax wedge.

In Austria, €100 earned by a single employee without children was taxed at an average of €47.2 last year. The amount was only smaller than in Germany (47.9 percent) and Belgium (52.7 percent) and it rose compared to the previous year when it was still at 46.9 percent.

The average of the 38 OECD countries was 34.8 percent.

Married single-earner couples with two children also have high tax burdens, with a tax wedge of 32.8 percent (OECD average: 25.7 percent), which is the eleventh-highest tax and contribution burden within the OECD for this group (2022: 13th place). For married dual-earner couples, the wedge was 40.6 percent.

The tax wedge for individuals or households with children is generally lower than those without children, as many OECD countries grant households with children a tax advantage or cash benefits.

READ ALSO: Why it’s worth filling in your annual tax return in Austria

Why is Austria’s tax burden higher this year?

Despite the tax reform presented by the government, Austria’s tax wedge has increased compared to the year before. 

The reason is the relief granted in Austria in 2022 in the form of one-off state payments. With the rising cost of living, the federal government released several temporary measures to help people in the country cushion the effects, including the popular €500 Klimabonus payment every person who had been a resident of Austria for at least six months was entitled to. 

These payments and increases in family allowances reduced the tax burden in 2022 – but they no longer exist or were drastically cut in 2023. Because of that, the tax burden is rising again. 

“The abolition of cold progression and the other measures have merely prevented the tax burden from rising more sharply,” Wifo economist Margit Schratzenstaller told Der Standard.

The report said the increased tax issues show that there is still a need for action. Compared to other industrialised countries, Austria’s tax burden on work for a single person without children is ten percentage points higher. Of course, the expert noted, the fact that many industrialised countries have a different social system with fewer publicly funded benefits also plays a role here. However, labour is also expensive in Austria compared to the EU average.

READ ALSO: What foreign residents in Austria should know about taxes

“The fact that the tax burden on the middle classes has increased is due to the government’s failure. Instead of structural relief, there have been one-off payments that have evaporated,” said Lukas Sustala, head of Neos-Lab, the think tank of the liberal opposition party.

NEOS representatives have urgently called for a ‘comprehensive tax reform’ to alleviate the heavy labour burden, with a significant reduction in non-wage labour costs, according to an ORF report.

In addition, NEOS proposes the creation of ‘tax incentives for full-time work’ – including a full-time bonus and tax exemption for overtime pay. Simultaneously, NEOS aims to eliminate ‘part-time incentives of any kind’, offering a potential boost to the economy and workers’ incomes.

Economist Schratzenstaller also recommends action: She suggests reducing social insurance contributions, for example, for health insurance companies. However, it’s important to note that intervening in this area could affect the largely autonomous financing of Austria’s healthcare system, which is funded mainly through workers’ and companies’ payments via social insurance contributions. 

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