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Austria Introduces New Withholding Requirements for Non-Resident Employers — Orbitax Tax News & Alerts

With effect from 1 January 2020, Austria has introduced new wage tax withholding requirements for non-resident employers. Changes in the requirements were included as part of the Tax Amendment Act 2020 published in October 2019, including that non-resident employers are obliged to withhold wage tax on Austrian employees that are subject to unlimited tax liability in Austria where the non-resident does not have a permanent establishment in Austria. Previously, withholding obligations only applied if the non-resident had a permanent establishment.

Further, due to the broad wording of the amendment, the Ministry of Finance has clarified that the withholding obligation in such cases only applies if the wages are in respect of activity exercised in Austria and Austria is entitled to tax the employee's wage income under an applicable tax treaty. This position will be formally implemented through amendments to the wage tax rules.