Eco-social tax reform under review

Nov 24, 2021 Benn-Ibler Rechtsanwälte

The evaluation drafts of the eco-social tax reform are now available. The aim of the tax reform is the introduction of CO₂ pricing and a corresponding social compensation.

The following is an overview of important changes.

 Income tax (Section 33 Income Tax Act (Einkommensteuergesetz) 1988)

• 2nd tax bracket to be reduced from 35% to 30% as of July 1, 2022
• 3rd tax bracket is to be reduced from 42% to 40% as of July 1, 2023
• The Family Bonus Plus (Familienbonus Plus) is to be increased from EUR 1,500 to EUR 2,000.16 per child up to 18 years of age as of July 1, 2022, and the additional child allowance is to be increased from EUR 250 to EUR 450 per child and year

Corporate income tax (Sec. 22 Corporate Income Tax Act (Körperschaftssteuergesetz) 1988)

• Tax rate to be reduced to 24% for 2023 and to 23% from 2023 onwards

National Emissions Trading Act 2022 (Nationales Emissionszertifikatehandelsgesetz, NEHG 2022)

A national trading system for CO₂ certificates will be introduced in sectors that are not subject to the European trading system for emission certificates (non-ETS sector), such as buildings, transport, agriculture and small industrial plants. This initially concerns energy-related greenhouse gas emissions from the non-ETS sector, which are generated by coal, natural gas and petroleum products. The purchase of emission certificates entitles the holder to place certain substances on the market and thus indirectly cause greenhouse gas emissions.

In the first two phases (introduction phase and transition phase) there are fixed prices. Only from the third phase onwards (market phase) should certificates be freely tradable.

One certificate should entitle the holder to emit one tonne of CO₂. The following prices apply in the first two phases:

• 2022: EUR 30
• 2023: EUR 35
• 2024: EUR 45
• 2025: EUR 55

Climate bonus (Climate Bonus Act - Klimabonusgesetz)

The climate bonus, which is paid out annually, serves to reduce the burden on the private sector. It consists of a basic amount (EUR 100) and a regional compensation (EUR 33, 66 or 100 - depending on the place of residence). Anyone who has a primary residence in Austria and Austrian citizenship or a valid residence permit is entitled to receive the climate bonus. For children, half the climate bonus is paid, for persons with disabilities, the basic amount and the full regional compensation is always paid.

The assessment period runs until December 6, 2021.

158/ME, XXVII. GP (08.11.2021)

159/ME, XXVII. GP (08.11.2021)