Published on and written by Cyril Jarnias
More and more French people are choosing to settle in Austria, whether for a skilled job in Vienna, a scientific career, an entrepreneurial project, or buying a chalet in the Alps. But behind the image of a stable and prosperous country, taxation remains a technical field, especially when juggling the Austrian system and French obligations.
This article provides a comprehensive and clear guide to income tax and property taxation in Austria, specifically designed for expatriates. It is based on factual data and presents it from a practical perspective, useful particularly for French residents or investors in the country.
Understanding the Structure of the Austrian Tax System
Austrian taxation is based on three levels: the federal government, the Länder (regional states), and the municipalities. Together, they fund major public services—health, education, pensions, infrastructure—within a framework considered stable and transparent for foreign investors.
The tax year coincides with the calendar year, from January 1 to December 31. This uniformity simplifies comparison with the French tax system and facilitates coordination of tax returns.
One of the key points for any expatriate remains tax residency status. It determines the extent of taxation: only income from Austrian sources, or all of your worldwide income.
Tax Residency and the “183-Day Rule”: How Austria Classifies You
In Austria, the distinction is clear between “unlimited liability” taxpayers and “limited liability” taxpayers.
An individual is generally considered an Austrian tax resident if they meet one of the following criteria:
– they have a permanent home in Austria (owned or rented) and live there regularly,
– they stay more than 183 days in Austria during a calendar year,
– their center of vital interests is in Austria, meaning the core of their family and economic ties.
In this case, the individual is taxable in Austria on all their worldwide income, regardless of the country where it is generated, subject to the provisions of applicable international treaties.
Conversely, if you spend fewer than 183 days in Austria, without having your primary residence there, and your family and economic ties remain abroad, you will generally be considered a non-resident. Your tax liability is then limited to income from Austrian sources (salaries, rental income, capital gains on real estate, etc.).
For foreign workers, three typical situations emerge:
Three situations illustrate taxation in Austria: 1) If you live more than six months in Austria, you become a tax resident and are taxed on your worldwide income. 2) If you are not domiciled in Austria but receive a salary from an Austrian company, you are subject to limited taxation on that Austrian income only. 3) If you work temporarily in Austria for a foreign employer without having a permanent establishment there, taxation typically occurs in your country of residence, according to tax treaties.
This framework is essential to avoid over- or under-reporting, especially when juggling activity or assets in France.
Income Tax in Austria: Rates, Thresholds, and Specifics
Income tax in Austria is a progressive tax, applied to most categories of income: salaries, self-employment income, rental income, certain capital gains, etc. For individuals, the rate scale includes several brackets with an exemption threshold.
Key Features of the Tax Brackets
The report highlights a reference rate scale, widely used in practice, which can be summarized as follows:
| Annual Income Bracket (approx.) | Tax Rate |
|---|---|
| Up to €11,693 | 0% |
| €11,694 – €19,134 | 20% |
| €19,136 – €32,075 | 30% |
| €32,076 – €62,080 | 42% |
| €62,081 – €93,120 | 48% |
| €93,121 – €1,000,000 | 50% |
| Over €1,000,000 | 55% |
Recent reforms have raised the tax-free allowance threshold (around €11,000–€12,000) and reduced rates for so-called “middle” incomes. The top rates—50% and 55%—continue to apply to high incomes.
Floor of the basic tax allowance for certain non-residents in France, compared to €11,000 to €12,000 for residents.
The “Artificial Income Increase” Mechanism
Quite an obscure particularity: Austrian law provides, for non-residents, an “artificial increase in income” for calculating tax. Specifically, a flat amount of €9,567 is added to the actual income to determine the applicable tax rate.
This does not mean you pay tax on this fictitious amount, but that it serves to set a higher average rate, which is then applied to your limited taxable income. The idea is to prevent a non-resident from combining low Austrian income with potentially high foreign income while benefiting from a very low rate.
For an expatriate receiving significant income outside of Austria, this tax mechanism strongly influences the marginal rate applied to their Austrian-source income.
Employees, Self-Employed: Same Rate Scale, Different Collection Methods
Taxation distinguishes between:
– “Lohnsteuer”, withheld at source on salaries,
– “Einkommensteuer”, paid based on a tax return for self-employed individuals, liberal professions, rental income, etc.
The rate scale is identical; only the method of collection differs. For an employee, the employer calculates and withholds tax and social security contributions each month. The net salary paid is already reduced by these charges.
For a self-employed person or a freelancer, the tax is self-declared. The tax authorities set quarterly installments to be paid (February 15, May 15, August 15, November 15), followed by a reconciliation after the annual return.
Tax Returns and Obligations: Who Must Declare What, When, and How
An expatriate employee of an Austrian company is not always required to file a tax return. The withholding tax system covers most simple cases.
However, filing a return becomes:
– mandatory if you hold multiple salaried jobs,
– necessary if you receive other income (rentals, self-employment, capital gains not already subject to final withholding tax),
– useful if you want to reclaim overpaid tax or claim deductible expenses (professional expenses, donations, exceptional charges, etc.).
Deadlines and Forms
For individuals, the calendar is structured as follows:
| Type of Annual Return Filing | Deadline (Year N+1) |
|---|---|
| Paper return | April 30 |
| Online return via FinanzOnline | June 30 |
| Return filed via tax advisor | Until March 31 of year N+2 |
The central form for personal income tax is form L1 (or E1, depending on the nomenclature). International situations, particularly for cross-border commuters or those with foreign income, additionally require a supplementary form L1i.
To use the FinanzOnline portal, you must have an Austrian tax number (Steuernummer). Access can be created either online with an Austrian electronic ID, or in person by visiting a tax office (Finanzamt).
In case of late filing when a return is mandatory, the authorities may impose fines, or even pursue legal action in cases of repeated non-compliance or proven fraud. Conversely, if you are not required to file but are requesting a refund, you have five years to submit a request without penalty.
Social Security Contributions: A Significant Factor to Include in Your Calculations
Beyond income tax, Austria levies significant social security contributions, covering health insurance, pensions, unemployment, accident insurance, etc.
For employees, these contributions are shared between employer and employee. The figures highlighted in the report are as follows:
| Party | Social Security Contribution Rate (approx.) |
|---|---|
| Employee | 18.12% of gross salary |
| Employer | 21.03% of gross salary |
This is capped at a maximum remuneration base of approximately €5,850 per month. Beyond this limit, contributions do not continue to increase proportionally.
For a French expatriate, the level of social charges is comparable to that in France. It is crucial to include them in salary negotiations, as Austrian annual remuneration typically includes 14 months of salary (the usual 12 months, plus a 13th and 14th month, traditionally paid at Christmas and in summer).
Capital Income: Regime for Dividends, Interest, and Capital Gains
Investment income receives specific treatment that is fairly straightforward to understand:
– dividends,
– interest,
– capital gains from the sale of securities,
are generally subject to a flat withholding tax of 27.5%.
Capital gains realized from the sale of real estate are subject to a flat tax of 30% on the net gain. This rate is specific and distinct from the progressive income tax scale.
These rates generally apply at source or upon declaration. For an Austrian tax resident, they also cover capital gains realized abroad, subject to double taxation treaties and tax credit mechanisms.
Focus on Property Taxation: Rentals, Capital Gains, “Property Tax”
The French concept of “taxe foncière” (property tax) has no exact equivalent in Austria. The report specifies that there is no municipal residence tax in the French sense, but real estate remains widely taxed at other levels: tax on rental income, transfer tax, capital gains tax, potential wealth tax, and local charges (municipal taxes, broadcasting fees, tourist taxes).
Taxation of Rental Income: A Key Issue for Property-Owning Expatriates
Whether you are a resident or not, as soon as you receive rent from a property located in Austria, this income is taxable in Austria. This principle is based on Article 6 of the OECD Model, which attributes the primary right to tax real estate income to the state where the property is situated.
The report describes the regime as follows:
– rental income is classified as real estate income and subject to income tax (EStG),
– a non-resident, even domiciled abroad, must declare their rental income in Austria,
– it is mandatory to obtain an Austrian tax number and file an annual return.
In practice, this means a French person living in Paris but owning an apartment rented out in Vienna is taxed in Austria on that rental income, regardless of their situation in France. However, the Franco-Austrian tax treaty prevents full double taxation on the same income.
Franco-Austrian Tax Treaty
Deductible Expenses and Depreciation
Austrian rules allow for deducting a number of expenses from gross rental income:
– loan interest related to the financing of the property,
– maintenance costs, management fees, local taxes,
– depreciation of furnishings: 10% per year of the furniture value can be expensed.
For a taxpayer who has no other Austrian income besides their rental income, the report mentions a fairly low personal tax-free threshold (€2,330 per year for a single person, €4,660 for a couple). Above this, tax is due according to the rate scale, with the particularities already discussed for non-residents (reduced allowance, artificial income increase).
VAT and Short-Term Furnished Rentals
Touristic furnished rentals—for example, via platforms like Airbnb—have a VAT dimension that should not be overlooked.
The report highlights several key points:
If the annual rental turnover exceeds €33,000, VAT registration (Umsatzsteuer) is mandatory. Touristic rentals are generally subject to the reduced VAT rate of 10%. This registration allows you to deduct VAT on expenses related to the property (renovations, furnishings, etc.). In the absence of ancillary services (breakfast, daily cleaning), the activity remains non-commercial in the trade register but is subject to VAT and income tax.
For investors considering a rental program in a ski resort, this VAT/income tax articulation is major: the possibility of recovering part or all of the VAT on the purchase price can represent up to 20% of the amount, provided a long-term profitable rental operation is demonstrated (over a 20-year horizon, according to Austrian practice).
Tourist Tax and Local Taxation
In Austria, the “property tax” dimension in the strict sense is less visible than in other countries, but municipalities have tax levers, particularly in tourist regions.
The report notably reminds of the existence of a tourist tax, very common in mountain areas:
The tourist tax is due per night and per person, typically for individuals over 14 years old. Its amount varies by municipality, most often between €1 and €3 per night. It must be collected from tenants and then remitted to the competent municipality.
In regions like Tyrol, this tax is systematic for tourist rentals and adds to VAT and income tax. It should not be confused with a property tax in the wealth sense, but it represents a recurring charge linked to the use of the property.
Transfer Tax and Disposal: The Weight of Real Estate Capital Gains
When acquiring a property, Austria levies a tax on real estate transfers (Grunderwerbsteuer). The report does not detail the rate scale for this tax, but reminds of its existence. Added to this are notary fees, land registry registration fees, and agency fees.
Upon resale, real estate capital gains from Austrian sources are taxed at a flat rate of 30%. This rate applies:
– to Austrian residents, for the sale of properties located in Austria,
– to non-residents, for the sale of real estate in Austria.
Deductions can be made from the sale price to calculate the net capital gain (acquisition costs, renovations, certain costs attached to the sale). Again, the Franco-Austrian treaty determines how France will treat this gain for a French taxpayer or former resident.
Wealth Tax, Inheritance, and Real Estate Assets
The report mentions the existence of a wealth tax with two rates: 0.5% below €176,000 of estimated assets, 0.75% above. In recent practice, however, Austria no longer levies a generalized wealth tax on individuals, but this type of information serves as a reminder that the debate is never closed and that certain wealth levies exist in specific niches.
For Austrian tax residents, there is no longer a federal inheritance or gift tax since its abolition in 2008. Wealth transfer is therefore generally less taxed than in France. However, it is advisable to check the application of any related duties or international treaties.
For the French, a specific treaty between France and Austria covers inheritances and gifts to prevent the same real estate or shares of companies with predominantly real estate assets from being taxed twice. As a general rule, the property is taxed in the state where it is located (here, Austria), while France takes the entire estate into account to set the applicable rate, granting a tax credit.
Special Case of French Expatriates in Austria
A French person living in Austria does not magically sever all ties with the French tax authorities. The tax treaty signed between France and Austria in 1993, subsequently amended, sets the rules for the distribution of taxing rights.
What France Continues to Tax
An Austrian tax resident remains taxable in France on certain income and gains from French sources. The report notably lists:
– income from properties located in France (rental income, charges, etc.),
– capital gains from the sale of real estate in France,
– shares or units in companies whose assets are predominantly composed of French real estate,
– French public sector pensions and annuities (paid by the state or local authorities), except for nationality exceptions,
– certain professional income earned from a fixed base or permanent establishment in France (liberal, industrial, commercial activities),
– dividends paid by a French company, interest, and royalties from French sources, within the limits set by the treaty.
A French person residing in Vienna but receiving rental income from an apartment in Lyon, or receiving a French civil service pension, must therefore continue to file a return in France, with the Non-Resident Individual Tax Office, based in Noisy-le-Grand.
The Articulation of the Two Systems: Tax Credit and Imputation Method
The Franco-Austrian treaty provides that each state retains the right to tax certain income, but that the other avoids double taxation via a tax credit.
In many cases:
– either France applies the so-called “exemption with progression” method: it does not tax the income already taxed in Austria but takes it into account to determine the rate applicable to the remaining income,
– or it grants a tax credit equal to the French tax corresponding to the foreign income.
For private sector salaries, the tax treaty applies the imputation method. France may grant a tax credit equivalent to the French tax calculated on this income, limited to the amount actually due. In practice, a French person residing in Austria with no French-source income will pay all their tax in Austria. If they retain French income, the fiscal balance is achieved through these credit mechanisms.
Non-Resident Status in France: Rates and Specifics
The report reminds that a French non-resident taxpayer is taxed in France on their French-source income according to a specific rate scale, with a minimum rate:
| Net Taxable Income from French Sources | Minimum Rate Applied |
|---|---|
| Up to €29,315 | 20% |
| Over €29,315 | 30% |
However, it is possible to request the application of an average rate calculated on all your worldwide income, if that rate is more favorable than the default 20%/30%.
Non-residents cannot, in principle, deduct expenses from their French income, nor benefit from most tax reductions and credits reserved for residents. This point can create significant differences compared to their previous situation in France.
Other Taxes an Expatriate in Austria Should Know About
Besides income tax and property taxation, an expatriate must account for several ancillary levies:
Overview of the main specific tax contributions in Austria, outside of standard income tax.
A contribution based on income for members of recognized religious denominations. Exemptions are possible for low incomes or students.
Due when purchasing or receiving real estate as a gift.
The amount varies based on the type, size, and emissions of the vehicle.
Due by dog owners. It notably helps fund the maintenance of public spaces and dedicated infrastructure.
Costs between €19 and €25 per month per household for TV/radio reception.
Regarding VAT, the standard rate is 20%, with reduced rates of 13% and 10% for certain categories of goods and services, including tourist rentals or residential housing (10%), and specific rates mentioned for certain services (27% for electricity and gas, 10.5% for certain media).
What an Expatriate Should Remember for Practical Organization
For an employee settling in Austria with a local contract, the priorities are clear: clarify your tax residency status, check your remaining ties to France (real estate, pensions, dividends, etc.), register with the Austrian tax authorities, and, if necessary, also file a return in France as a non-resident.
For a property investor, whether living there or not, the core issue lies elsewhere: optimize the acquisition structure, understand the combination of income tax / VAT / capital gains upon exit / local taxes, and anticipate the impact of the Franco-Austrian treaty on their overall situation (including any French IFI—Real Estate Wealth Tax).
Austria has concluded double taxation treaties with approximately 84 countries, including France. Based on the OECD model, these treaties define the sharing of taxing rights and tax credit mechanisms. Compliance with them is essential to secure your tax situation as an expatriate and constitutes a more critical criterion than simply counting the 183 days of presence.
Finally, even though the tax authorities provide online simulators, only the tax administration—Austrian or French—gives a legally binding answer. For complex situations (mixed income, foreign company, asset structuring, mountain furnished rentals, etc.), seeking advice from an experienced local tax advisor often remains the best insurance against unpleasant surprises.
Disclaimer: The information provided on this website is for informational purposes only and does not constitute financial, legal, or professional advice. We encourage you to consult qualified experts before making any investment, real estate, or expatriation decisions. Although we strive to maintain up-to-date and accurate information, we do not guarantee the completeness, accuracy, or timeliness of the proposed content. As investment and expatriation involve risks, we disclaim any liability for potential losses or damages arising from the use of this site. Your use of this site confirms your acceptance of these terms and your understanding of the associated risks.
Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
