In this tax dictionary, we explain complicated tax law terms. If you have questions about another tax term, comment on this blog post or drop us a line.
Table of contents
A
Additional child allowance
If you earn so little that you pay no taxes, the Family Bonus Plus is of no use to you. As a replacement for the Family Bonus Plus, you will receive the additional child allowance.
Automatic data transmission
Certain organizations automatically report data to the tax office. These are, for example, your employer (payslip) or organizations that transmit special expenses.
B
Basic benefits
Basic care includes the provision of asylum seekers and other foreigners in need of assistance by the state.
C
Certified special power of attorney
A special power of attorney is a power of attorney that only authorizes someone to carry out a specific transaction or a few specific transactions. For example, I can give someone a power of attorney to collect my Finanzonline access data. This special power of attorney must be notarized. This means that a notary confirms the authenticity of the signature.
Child allowance
If you are entitled to child deduction or support money deduction for more than 6 months of the year, you are entitled to the child allowance. As of 2019, the Family Bonus Plus will replace the child allowance.
Childcare benefits
The childcare benefits are benefits from Austria for the care of a newborn child by parents legally living in Austria (family allowance receipt, custody, joint household, mother-child passport examinations). There are two variants of payment.
Childcare subsidy
This is a subsidy for low-income families to reduce the financial cost of childcare.
Complaint, Objection
The complaint is a letter to the tax office, which must contain the following information:
The notice against which the appeal is directed.
A designation of what the appeal is.
A statement of why you are appealing the notice.
An explanation of what change you are requesting.
Sample letters for the various appeals can be found on the Chamber of Labor website in the Service section under the menu item Sample letters.
D
Decision on tax allowance
Once your employee tax assessment has been completed, you will receive your income tax assessment notice from the tax office. In addition to the income tax assessment notice, you will also receive a decision on tax allowances.
In an exemption notice, certain income-related expenses, special expenses or extraordinary burdens are recorded. When you hand it in to your employer, these expenses are already taken into account during the year. This means that you already pay less income tax month after month.
E
Employee tax assessment
In the employee tax assessment, the tax for a calendar year is calculated. Your entire income for a calendar year is taken into account. Does your income fluctuate throughout the year? Then your income tax is calculated in your employee tax assessment as if you earned the same amount each month throughout the year. Your income may fluctuate, for example, if you change jobs. This may result in a tax credit.
The employee assessment is also called annual equalization, wage tax equalization, or tax equalization.
A distinction is made between voluntary, application-free, and mandatory (obligatory) employee assessment:
A voluntary employee assessment is done by yourself.
An application-free employee tax assessment is done automatically. The payment of a possible refund is made automatically.
An obligatory employee tax assessment can exist under certain circumstances. For example, if you have two jobs at the same time. Then you have to make an employee assessment.
EU
The European Union (EU) is a union of 27 European countries:
Belgium
Bulgaria
Denmark
Germany
Estonia
Finland
France
Greece
Ireland
Italy
Croatia
Latvia
Lithuania
Luxembourg
Malta
Netherlands
Austria
Poland
Portugal
Romania
Sweden
Slovakia
Slovenia
Spain
Czech Republic
Hungary
Cyprus
EEA
The European Economic Area was created in 1994 by an agreement between the European Union (EU) and the so-called EFTA states Iceland, Liechtenstein, and Norway.
The EEA includes on the one hand the 27 EU member states and on the other hand the following states:
Iceland
Liechtenstein
Norway
Extraordinary burden
For an extraordinary burden to be deductible, the burden must meet certain requirements.
It must be extraordinary. It must be inevitable. It must have a significant impact on economic performance.
In the case of extraordinary burdens, a distinction is made between extraordinary burdens with and without a deductible.
F
Family allowance
You receive family allowance if you have your center of life in Austria and you live in a common household with your child. As soon as the child is 18 years old, family allowance is only paid under certain conditions.
Family Bonus Plus
The Family Bonus Plus is a tax deduction for tax-paying parents. It is a ax deduction and replaces the child allowance and the deductibility of childcare costs. You receive the Family Bonus Plus in addition to the family allowance and the child support deduction.
Finanzonline
Finanzonline is the e-government portal of the tax authorities. You can submit your employee assessment and tax return via the Finanzonline website.
G
Gross salary
Gross salary means your earnings before you pay taxes and social security contributions.
I
Income (Einkünfte)
Income is defined in the Income Tax Act. The sum of income is the total amount of income from the seven types of income. The profits and losses of the individual types of income are added together. The income results when the special expenses and extraordinary burdens are deducted from the sum of the income. The income is your tax base.
(Total sum of your) Income (Einkommen)
The Income Tax Act recognizes seven types of income.
Income from agriculture and forestry
Income from self-employment
Income from business operations
Income from employment
Income from capital assets
Income from renting and leasing
Other income
The sum of the 7 types of income results in the total amount of your INCOME.
Income from employment
Are you employed or do you receive a pension? Then you have income from employment. You have to pay income tax on your income.
What is the difference between wage tax and income tax? Employees and pensioners pay income tax. Self-employed persons pay income tax.
Wage tax is a special form of income tax. The tax rate is basically the same. You can find the current tax rates summarized here.
Income related expenses
Income-related expenses are professional expenses. For an employee, these are expenses so that the profession can be performed optimally.
Income tax
Income tax is a tax on the income of natural persons. Taxes and duties finance the Austrian community.
Income tax assessment notice
A notice is an administrative act. For example, an income tax assessment notice is used to determine taxes.
Income tax return
With the income tax return, you report (declare) to the state how much income you have received. The income is used to calculate your tax. Taxes and duties finance the Austrian community.
Income Tax Act
The Income Tax Act regulates the income tax of a natural person in Austria.
L
Legal Maintenance
Legal maintenance is a benefit so that a person can afford to live. Under certain conditions, children, parents, or partners are entitled to alimony.
Lump sum for commuters
Do you have particularly inconvenient or long routes to work?
Then you may be eligible for the lump sum for commuters and the commuters' euro.
M
Mobile phone signature
The mobile phone signature is like an ID card on the Internet. The mobile phone signature is your digital signature on the Internet, like your personal signature on paper, and is just as valid and binding before the law.
N
Negative tax
A low-income tax credit is also called a negative tax.
Net wage
Net wage is the wage that remains after the deduction of income tax and social security contributions.
Notice
A notice is an administrative act. For example, an income tax assessment notice is used to determine taxes.
P
Partnership
The term includes marriages and registered partnerships.
Payroll accounting
Payroll accounting calculates your wages and all taxes to be paid. For example, social security contributions or payroll tax.
Payslips
Every month, employees are sent a summary of their payslips. The payslip summarizes all details of your employee's pay, taxes, and duties.
Performance
Performance is the creation of value. For example, making a chair or writing a computer program.
Person subject to unlimited tax liability
Persons with unlimited tax liability in Austria are persons with residence or habitual abode in Austria. Unrestricted tax liability means that, in principle, all domestic and foreign income is taxable in Austria.
Pot special expenses
Insurance premiums (except voluntary continued insurance and subsequent purchase of insurance periods), pension fund contributions, housing creation, and housing renovation are also referred to as pot special expenses. They are deductible in total up to a personal maximum of 2,920 euros per year. You can only take these expenses into account in your employee tax assessment until 2020.
Important: The contract on which the payment is based must have been concluded before January 1, 2016, or the actual construction work must have begun before January 1, 2016.
Poverty relief assistance
If you no longer receive unemployment benefits and have not yet found a job, you receive poverty relief assistance – provided you meet the conditions.
Price level
The price level indicates how much money has to be paid for goods and services in a country.
R
Request for supplement (Ersuchen auf Ergänzung)
A request for a supplement is a letter from the tax office. The letter states what the tax office needs to further process your tax return.
S
Single-earner deduction
You are entitled to the single-earner deduction if you live in a partnership with a person who is subject to unlimited tax liability for more than 6 months in a calendar year. And you or your partner receive the family allowance for at least one child for more than 6 months in a calendar year and your partner does not earn more than 6,000 euros in income in the calendar year.
Single-parent deduction
The single-parent deduction is available to you as a taxpayer if you do not live in a partnership for more than 6 months in a calendar year and receive family allowance for at least one child for more than 6 months in a calendar year.
Special expenses
As of 2021, pot special expenses can no longer be taken into account.
This means that only
the automatically transferred special expenses,
tax consultancy costs (but only in exceptional cases because tax consultancy costs are normally to be deducted as business expenses or income-related expenses) and
certain life annuities
can be taken into account in the employee tax assessment.
Social security contribution
The social security contribution includes the contribution for statutory health, accident, and pension insurance. However, it also includes other contributions, such as unemployment insurance, the chamber of labor levy, the company employee pension plan ("Abfertigung neu"), or the surcharge for insolvency compensation. The amount of the social security contribution depends on the amount of your income.
Social security number
The abbreviations SV number, SVNR, VSNR, or VNR all mean the same thing. The social security number consists of a three-digit sequence number, a check digit, and the date of birth. It is stored on your e-card and is used to uniquely identify individuals.
Supplementary splitting variant
What if one parent is mainly responsible for child care?
There is a supplementary splitting variant of the Family Bonus Plus for parents who live separately.
The childcare costs must amount to at least 1,000 euros per year.
The Family Bonus Plus is divided into a ratio of 90% to 10%.
This results in 1,350 euros to 150 euros.
The advantage goes to the parent who mainly pays for childcare.
Support money deduction
When are you entitled to the monthly support money deduction?
You are divorced, and your child does not live in the same household. You or your new partner do not receive the family allowance for this child. Furthermore, you pay the statutory maintenance.
Then you can claim the monthly support money deduction in the employee tax assessment or tax return.
T
Tax credit
A tax credit is a refund from the tax office.
Tax deduction
Tax deductions are amounts that are deducted in full from income tax. Thus, the tax deduction amount directly reduces your tax.
Tax-exempt (steuerfrei) income
Tax-exempt means that these benefits are not taxed.
The most important tax-free benefits are
the family allowance,
the maternity allowance and comparable payments from statutory social insurance,
childcare allowance,
accident pensions,
care allowance and care allowance, pensions from long-term care insurance, long-term care pensions and
Tips for employees.
Tax office
The tax office is a public authority. A public authority is a legally regulated institution that is appointed to carry out certain public tasks. The tax office is subordinate to the Federal Ministry of Finance. Its tasks include the administration, assessment, and collection of taxes.
Tax return
With the income tax return (or tax declaration) you report (declare) to the state how much income you have received. The income is used to calculate your tax. Taxes and duties finance the Austrian community.
U
Unemployment benefit
You are unemployed and registered with the AMS (Arbeitsmarktservice). Unemployment benefits are intended to secure your livelihood while you are looking for work.
W
Wage slip
The employees' payments are summarized and sent each month as a wage slip (or payslip). The payslip summarizes all the details of your employee's pay, taxes, duties. At the end of the year, an annual payslip of your employment is sent to the tax office.
Wage tax
The wage tax is a tax on income from employment of natural persons. The wage tax is a special form of income tax.
Wage Tax Directives (Guideline)
Directives are a guide to the interpretation of the law. The purpose of guidelines is to grant a uniform application of the law.
Translations used by the Ministry of finance
tax Steuer
decision on tax allowances Freibetragsbescheid
tax refund Steuergutschrift
deductible Selbstbehalt
lump sum disability amount Pauschalbeträge bei Behinderung
nursing care allowance Pflegegeld
child deduction Kinderabsetzbetrag
tax deduction Absetzbeträge
lump sum for income related expenses Pauschale Werbungskosten
tax return Steuererklärung
income tax return Einkommensteuererklärung
childcare benefits Kinderbetreuungsgeld
single-earner deduction Alleinverdinerabsetzbetrag
single-parent deduction Alleinerzieherabsetzbetrag
social security contribution SV-Beiträge
poverty relief assistance Notstandshilfe
maternity allowance Wochengeld
child allowance Kinderfreibetrag
miltiplechild bonus Mehrkindzuschlag
additional child allowance Kindermehrbetrag
complaint Beschwerde
objection Beschwerde
increased transportation deduction Zuschlag zum Verkehrsabsetzbetrag
increased transportation deduction erhöhter Verkehrsabsetzbetrag
transportation deduction Verkehrsabsetzbetrag
home office flat rate Homeoffice Pauschale
commuters' euro Pendlereuro
lump sum for commuters Pendlerpauschale
Employee tax assessment without application automatische Arbeitnehmerveranlagung
wage tax Lohnsteuer
income tax Einkommensteuer
family bonus plus Familienbonus Plus
employee tax assessment Arbeitnehmerveranlagung
family allowance Familienbeihilfe
unemployment benefits Arbeitslosengeld
basic benefits Mindestsicherung
Special expenses Sonderausgaben
income related expenses Werbungskosten
extraordinary burdens außergewöhnliche Belastung
support money debtor Unterhaltszahler
legal maintenance Unterhalt
support money deduction Unterhaltsabsetzbetrag
income tax assessment notice Einkommensteuerbescheid
income from agriculture and forestry Einkünfte aus Landwirtschaft und Forstwirtschaft
income from self-employment Einkünfte aus selbstständiger Arbeit
income from trade of business Einkünfte aus Gewerbebetrieb
income from employment Einkünfte aus nicht-selbstständiger Arbeit