Income tax allowance

The tax allowance under Austrian law is a tax concession granted to natural persons with business income. It is based on the provisions of § 10 of the Austrian Income Tax Act (EStG).

The tax allowance consists of two parts:

1. Basic allowance: This is available to all taxpayers regardless of investments and is automatically taken into account.
2. Investment-related profit allowance: This part of the profit allowance can be claimed in addition to the basic allowance if certain investments are made.

The investment-related profit allowance is linked to the acquisition or production of eligible assets. These assets must be depreciable physical assets. They must have a normal useful life of at least four years and be attributable to the fixed assets of a domestic business or a domestic permanent establishment.

Alternatively, certain securities, such as special investment funds, may also be considered as eligible assets. These funds meet the legal requirements for a tax-effective investment. After the prescribed minimum holding period of four years, you can sell them at will and without additional taxation.