Austria: Mandatory wage tax deduction
Yvonne Schuchter-Mang 22 Dec 2020
The mandatory wage tax deduction for foreign employers who employ employees with unlimited tax liability in Austria without a domestic permanent establishment for payroll tax purposes will be abolished retroactively as of 1 January 2020.
The mandatory wage tax deduction for foreign employers who employ employees with unlimited tax liability in Austria without a domestic permanent establishment for payroll tax purposes will be abolished retroactively as of 1 January 2020. This has now been passed by the National Council as part of the COVID-19 Tax Measures Act. The wage tax deduction can continue to be made voluntarily.
Pursuant to Section 83 (2) of the Austrian Income Tax Act (‘ITA’), in these cases the employee is directly liable if the foreign employer has not withheld and remitted the wage tax in the correct amount. Additionally, a compulsory assessment exists for the employee in accordance with Section 41 (1) ITA.
The foreign employer is legally obligated to transmit a wage statement (form L17) if no voluntary wage tax deduction is made. The obligation to transmit the wage statement applies for the first time in 2021 for wage payment periods from 1 January 2020, the transmission must take place by 31 March 2021.
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