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Austria: Tax measures in 2025 draft budget law

Including measures relating to real estate transfer tax, foundation tax, income tax, VAT, energy crisis contributions, gambling taxes

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May 5, 2025

The draft of the Budget Accompanying Act 2025 includes the following tax measures:

  • Real estate transfer tax: Reform of the share consolidation in real estate transfer tax, intended to effectively equalize asset deals and share deals in real estate transactions
  • Foundation tax: Increase tax rate for donations to private foundations from 2.5% to 3.5% effective January 1, 2026
  • Income tax: Implement several measures announced in the 2025-2029 government program, including:
    • Tax reclassification gains more heavily under the real estate income tax
    • Grant employers the option of granting employees a tax-free employee bonus of up to €1,000 for calendar years 2025 and 2026
    • Expand scope of the basic flat-rate tax
  • Value added tax (VAT): Adjust flat-rate input tax allowance and provide VAT-free treatment for contraceptives and feminine hygiene products effective January 1, 2026
  • Energy crisis contribution for electricity and fossil fuels: Various further adjustments based on ongoing evaluation of effectiveness and price developments
  • Gambling taxes: Increase in concession fees and the gambling fee for certain lotteries

Read a May 2025 report (German) prepared by the KPMG member firm in Austria

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