Family bonus for adults should be increased
Vienna (PK) – The minimum taxation of large corporations passed today alongside other major financial laws Finance Committee. In addition, the expansion of the deductibility of donations was approved and the green light was given for benefits for start-up employee shareholdings. By means of amendments, the family bonus plus for adults was increased in the committee and technical adjustments were made.
Family bonus for adults should be increased
The ÖVP and the Greens plan to increase the Family Bonus Plus for adult children from €54.18 per month to €58.34. This results in an annual amount of €700.08 instead of the previous around €650. This is justified by the increase in the additional child allowance to €700 from 2024, according to which an increase in the family bonus for adults is also indicated. Parents who receive family allowance for their adult child should be relieved of increasing expenses, argued the ÖVP and the Greens in a corresponding amendment, which was approved by the Finance Committee as part of the vote on the Start-Up Funding Act. The increase in the Family Bonus Plus for adult children should be taken into account in the payroll calculation or in the 2024 assessment from January 1st, 2024.
So that all deduction amounts applicable for the calendar year 2024 can be read directly from the law, the valorized child tax deduction should be included in the Income Tax Act. According to the amendment, the child tax credit in 2024 is €67.80 per month.
Committee unanimously in favor of minimum tax
The Finance Committee also discussed the introduction of a minimum tax. This is intended to affect multinational corporate groups that have group sales of at least €750 million (2322 d.B.). As a result, companies should be subject to an effective tax burden of at least 15% worldwide, explained Jakob Schwarz (Greens). If the taxation falls below an effective tax rate of 15%, the minimum tax is levied. Essentially, this is the implementation of an EU directive. This is based on an OECD model regulation on a global minimum tax for large, multinational corporate groups, which was adopted by 139 states and territories in November 2023. Finance Minister Brunner stated that the majority of the advantages that come with shifting profits to tax jurisdictions with no or very low taxation should be abolished.
Many questions would only arise in practice, emphasized Hubert Fuchs (FPÖ). Kai Jan Krainer (SPÖ) questioned the Ministry of Finance’s expected additional revenue of €100 million annually from 2026. By means of an amendment, technical changes to the Corporate Code in the area of the valuation of deferred taxes in financial statements were taken into account.
The tax deductibility of donations should be expanded
Eva Blimlinger (Greens) emphasized that a milestone had been achieved with the Non-Profit Reform Act 2023 with a view to art and culture, sport and education. The new regulation is intended to extend the tax deductibility of donations to other non-profit organizations and to simplify the process of qualifying for donations (2319 d.B.). Andreas Hanger (ÖVP) underlined that a change in the income tax law will in future allow all donation purposes that are considered non-profit or charitable to be eligible for donations, underlining the strengthening of the financial basis of non-profit organizations.
In order to provide tax support for the work of volunteers, payments from non-profit organizations to their volunteers should in future be regulated via a “volunteer flat rate,” said Hanger. This provides for tax exemption for income from voluntary work. Blimlinger held out the prospect of an amendment in the plenary session.
The FPÖ was positive about the amendment. Hubert Fuchs (FPÖ) was interested in the estimated shortfall in income and pointed out the problem that fake donations could be made tax-free. Alois Stöger (SPÖ) also followed this up and found it highly problematic to finance universities through donations. The SPÖ did not approve the draft law and was concerned, particularly in private schools, that school fees could be replaced by tax-privileged donations. From the Ministry of Finance’s perspective, the tax administration is aware of the problem and will pay attention to it.
On the NEOS side, Gerald Loacker (NEOS) welcomed the benefits in the education sector, although he was critical of other areas. Martina Künsberg Sarre (NEOS) considered the volunteer allowance to be problematic. The NEOS voted against the draft law and reserved its approval in the plenary session.
When asked by the SPÖ, Brunner explained that 33 employees are scheduled to process the applications. Ultimately, the ÖVP, Greens and FPÖ voted for the draft law.
Benefits for start-up employee shareholdings
The ÖVP, the Greens and the SPÖ spoke out in favor of a “start-up funding law” that would create separate tax benefits for start-up employee shareholdings (2321 d. B.). According to the current legal situation, there are tax exemptions for employee shareholdings in the amount of €3,000 for the free or discounted transfer of shareholdings or €4,500 for employee shareholding foundations. Due to a lack of liquidity, start-ups and young SMEs are often unable to pay appropriate monetary compensation for highly qualified employees, explained Elisabeth Götze (Greens) and referred to the “dry income problem”. Andreas Ottenschläger (ÖVP) welcomed a change in the Income Tax Act to create a separate tax model for start-up employee shareholdings and thus promote the loyalty of employees to the company.
According to Brunner, employee participation takes place by agreement between employers and employees, so employees become participants in the company. The draft law stipulates that, under certain conditions, a deferral of taxation will be granted until the shares are actually sold and that the complexity of the valuation will be reduced through a flat-rate regulation.
The NEOS still saw a lot of room for improvement. Gerald Loacker (NEOS) considered a mixed tax rate to be unnecessarily complicated and also did not correspond to international standards. In his view, it would be more appropriate to uniformly apply the capital gains tax rate of 27.5%. Loacker considered the companies’ requirements – a maximum of 10 years old, 100 employees and €40 million in sales – to be too low. The NEOS therefore submitted a far-reaching amendment, which, however, was not approved.
Selma Yildirim (SPÖ) highlighted contradictions and ambiguities. From their point of view, the boundaries between service contracts are not clear. She criticized the position of employees as beneficial owners without being able to dispose of it in the early years. While the requirements do not go far enough for the NEOS, they go beyond the mark for the SPÖ. Yildirim spoke out in favor of adequate pay as a better instrument for employee retention. Due to the lack of clarity, the SPÖ initially voted against the draft law.
Hubert Fuchs (FPÖ) agreed that many questions would have to be clarified in the future. A new system had to be inserted into the existing legal structure, the Ministry of Finance stated in response to criticism from the FPÖ, according to which several provisions were distributed in the Income Tax Act. Despite critical comments, the FPÖ voted for the draft law. Fuchs rated the basic intention positively. Start-ups would not have the opportunity to retain employees through rewards, so additional benefits could be granted through shares.
Photovoltaic systems: relief for transitional cases
Minor changes to the law were made through an initiative proposal from the ÖVP and the Greens. Specifically, it is about the sales tax exemption for photovoltaic systems. It was originally planned that no application for an investment grant could have been submitted in these cases. Now a “citizen-friendly relief regulation” is to be created for “transitional cases”, as the ÖVP and the Greens explained in the application. Accordingly, an application for an investment grant may have been submitted if the photovoltaic system in question is put into operation for the first time before January 1, 2024. Legally, this requires a (renewed) change to the sales tax law (3777/A).
Kai Jan Krainer (SPÖ) called for a market survey of the current price situation. He also criticized the fact that no sales tax exemption for food had been implemented to combat inflation. From the Treasury Department’s perspective, this is a different situation. Karlheinz Kopf (ÖVP) justified this with the incentive effect of ecologically desirable investments.
Changes are also planned in the Motor Vehicle Tax Act, the Electricity Tax Act, the Natural Gas Tax Act, the Coal Tax Act and the Federal Tax Code. It is planned to extend the later submission of tax returns by professional party representatives “quota regulation” to annual returns for motor vehicle tax, natural gas tax, electricity tax and coal tax. The deadlines are to be postponed from March 31st to June 30th. An amendment was based on the end of the financial year (instead of the beginning). This means that tax returns that relate to a different 2022/23 financial year can also be included in the quota regulation. The law was passed in the form of a committee proposal by a majority of the ÖVP and the Greens. In a separate vote, the SPÖ spoke out against the measures in the sales tax law, but in favor of the remaining parts of the law.
Opposition motion on the Export Promotion Act postponed again
A motion from Petra Bayr (SPÖ) on the Export Promotion Act (2666/A). The Social Democrats want to make the state export promotion system more sustainable. The ÖVP and the Greens justified the postponement with pending developments at the international and European level. (Final Finance Committee) gla
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