A. Personal liability to pay tax
Who is liable to pay tax in Austria?
Persons with unlimited tax liability are those whose place of residence or regular domicile is in Austria. Persons have a place of residence in Austria if they have a domicile at their disposal on Austrian Federal territory that they obviously use (or will use) as such on a longer-term basis. The domicile need not be the principal place of residence. It is sufficient if the domicile can be used for personal residential needs at any time. In order to establish residence, the domicile need not be used permanently, but at least on a recurrent basis.
Persons will have their regular domicile in Austria if they (are going to) stay on Austrian Federal territory not on a merely temporary basis (holiday, business trip, visit, etc.), but obviously for a longer period. In any event, persons have an unlimited tax liability after they have stayed in Austria for six months, with retroactive effect. Nationality is irrelevant in this context.
Unlimited tax liability means that all domestic and foreign earnings are taxable in Austria.
Limited liability to pay taxes applies to persons who earn income in Austria (e.g. as employees) or from Austria (e.g. social security pensions) but who are not resident in Austria and do not have their habitual abode there.
Employees with limited liability to pay tax can also be required to complete an employee tax assessment or can apply for a voluntary assessment of wage tax due on their income, claiming deductions for income-related expenses and special expenses incurred in Austria (see page 146). Rz 1178 ff
Please bear in mind that an amount of €10,888 is added to the tax assessment base of persons with limited liability to pay tax. This amount is not considered in standard payroll accounting.
The reason is that the tax-exempt subsistence minimum must as a rule be considered by the country of residence. On the basis of a tax-exempt threshold of €13,308 (see page 26) pursuant to the tax scale, taxpayers thus have a tax-exempt basic income of €2,421.
Note on the exchange of information within the EU
The EU tax authorities have agreed to cooperate more closely in order to collect taxes from their taxpayers properly. The pivotal legislation in this field is Directive 2011/16/EU of the Council on administrative cooperation in the field of taxation. This directive provides for the automatic exchange of information on the following categories of income and capital:
- Income from employment
- Remuneration for activity on supervisory or administrative boards
- Life insurance products not covered by other directives
- Retirement pay and pensions
- Ownership of immovable property and income from such assets
- Licence fees
Accordingly, the Austrian tax administration is aware of this foreign income. Please use the tax return forms L 1i or E 1, respectively, for exact disclosure of the income and any income-related expenses related thereto (see Chapter V).
EU/EEA citizens of countries with which Austria has a double taxation agreement with non-discrimination clause, who do not have a place of residence in Austria, but whose main income is earned in Austria (90% of the income is earned in Austria, or their foreign income does not exceed €13,308) can opt for unlimited tax liability when filing their return for employee tax assessment. In the 2025 tax year, all foreign income must be declared in addition to income earned in Austria. The foreign income itself is not taxed, but this income increases the tax rate at which the Austrian income is taxed. In this case, the amount of €10,888 need not be added for the tax assessment. Moreover, individual tax deductions (Family Bonus Plus, single-parent or single-earner tax credit, support money deduction) and extraordinary burdens may be claimed. Rz 7 ff
Double tax conventions prevent taxes having to be paid more than once on the same income if an individual has places of residence or receives income in more than one country (see page 145).
Special provisions apply to cross-border employees Rz 6, i.e. persons residing in Austria but working in Germany, Italy or Liechtenstein and commuting every day or working in close proximity to the border. As a rule, their income is taxed in Austria. Please see page 140 for more information concerning employees with income from which no wage tax has previously been deducted, or persons receiving income abroad.
Foreign employees Rz 4 are treated as subject to unlimited tax liability from the first day of their stay in Austria. This requires a work permit for at least six months or an employment contract for a minimum period of six months.
For seasonal workers Rz 5, unlimited tax liability generally arises when their stay in Austria exceeds six months. In this case, the unlimited tax liability commences on the first day.