What 2025 will bring

More mileage allowance and tax relief

(Bild: APA/Herbert Neubauer)

While possible new taxes - such as the taxation of wealth and inheritance - are occupying the coalition negotiators from the ÖVP, SPÖ and NEOS, some tax changes from the Black-Green government are already fixed. Among other things, the small business tax threshold will be increased to 55,000 euros.

As part of the automatic inflation adjustment, the first four rate limits will be adjusted from January 1st. As a result, the marginal tax rate will be zero percent for the first 13,308 euros, 20 percent for income above this amount up to 21,617 euros, 30 percent up to 35,836 euros and 40 percent up to 69,166 euros. The marginal tax rate is 48 percent up to 103,072 euros and 50 percent above that.

To date, the exemption limit for "other remuneration" (in particular vacation and Christmas bonuses) has not been part of the compensation for cold progression. As in 2024, there will also be a corresponding adjustment in the coming year.

The deductible amounts will also be adjusted in line with inflation, including for single earners. From July, single parents with an annual income of no more than 25,725 euros for children up to the age of 18 will also be entitled to a child supplement in the form of a deduction. The amount of 60 euros and the maximum amount of income are to be adjusted annually in line with inflation from 2026.

More money for business trips and mileage allowance
The mileage allowance will be increased to 50 cents per kilometer from the beginning of the year, and a contribution of 15 cents can be claimed for passengers in future. In addition, the current upper limit for the mileage allowance for bicycles will be doubled from 1,500 kilometers to 3,000 kilometers per year and the lower limit for pedestrians will be halved to one kilometer.

In the case of official residences, the living space that is completely exempt from the allowance will be increased to 35 square meters, and common rooms will no longer be fully allocated to each individual resident as before, but on a pro rata basis. The daily and overnight allowances will also be increased: Daily allowances for domestic business trips may then be up to 30 euros (previously 26.40 euros), and the overnight allowance will be raised from 15 to 17 euros.

In addition to the increase in the limit, small businesses have another reason to be happy: in future, they will always have the option of issuing simplified invoices, regardless of the amount shown on the invoice (previously, this was only possible for invoices up to EUR 400). In future, the small business exemption can also be used by entrepreneurs who do not operate their business in Austria but in another EU member state.

The "Teleworking Act" is new for employees, replacing the home office and making it possible to work from any location, for example in a coffee house, if agreed with the employer.

Appointments at the tax office via video or live chat
There are also innovations in tax administration. For security reasons, the login to FinanzOnline will be switched to two-factor authentication. This will be mandatory from fall 2025 at the latest. The capacity for video appointments at the tax office is to be expanded. In addition, the possibility of providing information via live chat or over the phone is also to be promoted.

A regulation has been extended according to which a withholding tax of 10 percent is withheld on payments that are made when laying pipes (usually to farmers). In future, payments made in connection with flood protection measures will also be included. An entrepreneur who wishes to transfer their business to a relative can submit an application for assistance with the business transfer from January 1st.

Subsidies will be reviewed and published
An "open e-learning" will be launched in the second quarter to make the background to the budget easier to understand. In addition, the most important economic indicators relevant to the budget will be presented nationally and in international comparison on the Ministry of Finance's website in the first quarter.

A funding task force will also be launched in 2025 to search for possible duplications in the funding structure. The aim is to increase transparency and improve the data situation on the impact of funding by developing suitable impact indicators across the federal and state governments for reporting to the transparency database.

In Vienna, a pilot project is being launched to reduce the general government budget risk in the climate sector. As part of the Freedom of Information Act, all subsidies to companies worth EUR 1,500 or more must be proactively published by name from September.