When relocating to Austria, various tax regulations must also be considered.
A matter of particular importance is unlimited tax liability*. Unlimited tax liability arises when a residence is established in Austria, according to the definition provided by tax legislation. However, other circumstances may also lead to unlimited tax liability, such as having a habitual abode in Austria, provided it qualifies as such under Austrian tax law.
Unlimited tax liability means that all worldwide income must be declared in Austria and – unless a double taxation agreement concluded by Austria provides otherwise – is also subject to taxation in Austria. Double taxation agreements are designed to prevent the same income from being taxed in more than one country. They define which country has the right to tax specific types of income and whether taxes already paid abroad are credited against Austrian tax or whether the income is exempt from taxation in Austria (subject to progression). To benefit from these agreements, the taxpayer must take the necessary steps to ensure their application.
Note: Unlimited tax liability does not automatically mean that a tax return must always be filed in Austria. Whether there is a filing obligation – and if not, whether submitting a tax return voluntarily is still advisable – depends on the individual circumstances.
To ensure correct taxation while acting as advantageously as possible and avoiding costly mistakes, it is essential to consider both the departure from the foreign country and the relocation to Austria as interconnected factors. Therefore, obtaining professional and comprehensive advice before leaving a country and moving to Austria can be highly beneficial in order to proactively and appropriately structure the tax situation in a timely manner.
The following examples are intended to illustrate the potential relevance of clarifying the individual tax situation prior to relocation:
- Additional Income For income earned from employment carried out in Austria with one employer based in Austria, the employer is generally responsible for fulfilling the relevant tax obligations. This includes remitting wage tax and registering the employee for social security. In the case of additional income – from employment with any additional employers** or from other types of income – the individual concerned is personally responsible for taking care of any applicable reporting and payment obligations and ensuring they are fulfilled in a timely manner. This may apply not only to income tax, but also to other levies, such as social security contributions.
- Foreign Investment Income Foreign investment income is also considered part of the additional income, as outlined above. It is important to note that such income is generally subject to declaration – and, where applicable, taxation – in Austria as well. This is because the so-called “final taxation” (Endbesteuerung) – i.e. the automatic withholding and remittance of capital gains tax (Kapitalertragsteuer, KESt) – only applies to income processed through Austrian banks or domestic custodians. Interest income from foreign bank accounts or securities portfolios, on the other hand, is not subject to automatic taxation in Austria. As a consequence, foreign investment income must generally be actively declared in the Austrian tax return and, where applicable, taxed accordingly (this must be assessed on a case-by-case basis). In other words, foreign investment income typically triggers a mandatory tax assessment in order to ensure proper taxation in Austria.
It is therefore important to examine the handling of foreign capital income at an early stage before relocating and to strategically plan it with expert advice, in order to avoid financial disadvantages due to missed opportunities for tax optimization and significant future effort caused by differences between tax systems.
- Home office activities for foreign employers Home office activities carried out in Austria for foreign employers are generally not covered by this website. However, they are mentioned here due to their occasional relevance for accompanying partners. Such activities must be carefully reviewed before they commence, as specific regulations from various legal areas – particularly tax law, social security law, and labor law – must be observed. To ensure legal compliance and avoid disadvantages, it is strongly advised to seek early guidance from qualified tax advisors or specialized lawyers.
Please note: The examples provided are intended solely for illustrative purposes and do not claim to be exhaustive or complete.
Moreover, depending on individual life and asset circumstances, other types of taxes may become relevant alongside income tax (ESt) – such as capital gains tax (KESt), real estate transfer tax (ImmoESt), or potential tax consequences in the country of origin upon departure, such as exit taxation, if applicable under local law. Early expert advice is essential to maintain a clear overview and make the most of available tax planning opportunities.
Tip: Even if someone earns only employment income in Austria and there are no circumstances that require them to file a tax return (e.g. multiple employment relationships or additional taxable income), submitting a tax return – referred to as an “employee tax assessment” (“Arbeitnehmerveranlagung”) – can still often be beneficial. This is especially true if the person moved to Austria during the year or incurred tax-deductible expenses that were not considered by the employer. Filing such a voluntary tax return can often result in a tax refund.
It is also important to be aware that certain tax benefits in Austria can only be claimed within specific deadlines. It is therefore essential to seek timely and comprehensive information in order to assess their relevance and ensure that applications are submitted on time. One example of such a time-sensitive benefit is the so-called “Zuzugsbegünstigung”. This relief must be applied for within six months of relocating to Austria – in the sense of Austrian tax law – and is subject to specific eligibility criteria.
Our recommendation: Seek early professional and comprehensive advice as tax law can be complex and highly individual! Assessing the tax implications of your individual situation and receiving tailored recommendations always requires a thorough and personal consultation. Tax law is relevant before, during, and after your move to Austria.
In Tyrol, internationally experienced tax advisors are available to support you, and contacting them from abroad is usually straightforward. To avoid misunderstandings, it is advisable to clarify the expected costs in advance. Based on experience, the initial consultation – intended as a first meeting to get to know each other – is often free of charge, but this should also be confirmed beforehand.
The Chamber of Labour Tyrol (AK Tirol) also offers tax-related advice to its members. Membership is established automatically upon commencement of employment in Tyrol – with a few exceptions regulated by law – and entitles members to free (initial) consultations on various topics, including tax law.
In summary:
Clarifying essential tax matters before relocating to Austria can help international professionals avoid complications and make informed decisions – ideally with support from qualified advisors.
Key questions include:
- Which tax regulations apply to my situation?
- What steps can I take to optimize my tax position?
- What deadlines and administrative tasks do I need to be aware of?
- Can I benefit from tax advantages – such as the “Zuzugsbegünstigung“ under § 103 EStG – and if so, how exactly and within what timeframe?
Introductory information (not exhaustive and does not replace individual consultation):
*The so-called “limited tax liability” can also be relevant in certain cases. However, due to capacity constraints, this form of tax liability is not covered here. An individual case assessment by a qualified advisor is recommended.
**Please note that these FAQs do not cover self-employment (e.g. as a sideline) or any associated regulations.