B. Types of special expenses
Insurance premiums
Which insurance premiums may be deducted?
Contributions to voluntarily continued insurance coverage under the statutory social security pension scheme and payments for the subsequent acquisition of insurance periods under the statutory social security scheme are deductible to the full amount without any limit on maximum amounts (no quartering).
When must tax on insurance premiums be paid with retroactive effect?
If claims are settled by a capital payment, before or when the annuity payments commence, tax must be paid retro-actively for the amounts claimed as special expenses. Subsequent taxation on insurance premiums must also be paid subsequently if life-insurance claims — without proof of a financial distress — are assigned, bought back or mortgaged within ten years. The subsequent taxation applied to the payment with retroactive effect is 30% of the amounts in question. In the case of reimbursements, future premiums cannot be claimed up to the amount of the reimbursement.
Church tax payments
To what extent can church tax payments be deducted?
Payments to state-recognised churches and religious communities may be claimed up to a maximum amount of €600 per year. Compulsory contributions paid to domestic churches or religious communities are directly communicated electronically from the receiving organisation to the tax administration. Hence, these no longer need to be asserted in the tax returns. For transmission, you must provide the organisation with your first and last name and date of birth. This information is encrypted in compliance with the applicable data protection regulations and to be used only by the tax office for the purpose of consideration in the assessment. To assert compulsory contributions to a foreign church or religious community, please use Form L 1d.
Donations
What donations are tax-deductible?
A tax benefit is granted for donations to research and teaching institutions. The following benefited recipients of donations are specifically listed in the law:
- Universities, art colleges, Academy of Fine Arts
- Research Promotion Fund
- Austrian Academy of Science
- Austrian National Library, GeoSphere Austria, OeAD GmbH
- Federal Office of Monuments and certain museums
- Umbrella organisations promoting sports for the disabled
- Institutions comparable in terms to the points listed above and headquartered in a Member State of the EU or a country with which there is comprehensive legal and administrative assistance (provided the donation supports Austrian science, adult education, arts and culture or Austrian sports for the disabled)
- Diplomatic Academy
- International Anti-Corruption Academy
Moreover, donations paid to benefited corporations for charity purposes, for fighting poverty and need in developing countries, as well as relief in case of national and international emergencies are recognised under special expenses by the fiscal authorities.
Donations of money to organisations for environmental, nature and species protection and officially authorised animal shelters are deductible as special expenses. Donations to volunteer fire departments and regional fire-fighting associations are also deductible.
You can find a list of preferentially treated beneficiary institutions at bmf.gv.at. Donations paid to benefited domestic organisations are directly communicated electronically from the receiving organisation to the tax administration. To assert donations to benefited foreign organisations, please use Form L 1d.
What amount of donations can be deducted?
Only monetary donations or donations in kind to the institutions directly considered in the law (e.g. museums, universities) can be deducted as special expenses. Donations can be deducted only to the extent of 10% of the total amount of income of the current year. Preferentially taxed remunerations (e.g. holiday pay, Christmas bonus) are not taken into account when calculating the maximum amount for special expenses.
Environmental special expenses
Since calendar year 2022, expenses for the thermal and energy renovation of buildings and expenses for replacing a fossil-fuel heating system for a climate-friendly heating system ("boiler replacement") can be deducted in a lump sum as special expenses. It is granted under the following conditions:
- After 30 June 2022, a federal subsidy was paid out for the expenses under the Environmental Subsidy Act,
- the data has been transmitted to the tax administration, and
- the expenses (minus paid subsidies from public funds) exceed the amount of €4,000 for thermal and energy renovation of buildings or €2,000 for a "boiler replacement".
What is required to be granted the "lump sum for environmental special expenses"?
The declaration that the lump sum is to be used must be submitted to Kommunalkredit Public Consulting as part of the application for federal funding. In addition, authorisation to the transfer of data to the tax office is required. In the case of condominium associations, the property management must electronically inform Kommunalkredit Public Consulting in the final invoice for the individual homeowners whether the lump sum for special expenses should be taken into account or not. The required data is transmitted by Kommunalkredit Public Consulting. The due lump sum is then automatically taken into account by the tax office as part of the employee tax assessment. There is no provision for a separate application as part of the assessment.
How much is the "lump sum for environmental special expenses"?
The annual lump sum for special expenses for subsidised thermal and energy renovation amounts to €800 and for subsidised "boiler replacement" to €400. These amounts will then be automatically taken into account in the employee tax assessment for five years.
From when can the "lump sum for environmental special expenses" be taken into account?
It will be granted for the first time for the assessment year 2022 if the application for funding was submitted after 31 March 2022 and the funding granted was paid out after 30 June 2022.
Examples of thermal and energy renovation include: insulation of external walls, insulation of roofs, and replacement of windows. Replacement of a fossil heating system (e.g. oil, gas, coal, coke) or an electricity-based heating system (night or direct storage heaters) with a climate-friendly heating system occurs, for example, if the new heating involves local or district heating, a wood-fired central heating system or a heat pump.