Since August 2008 the inheritance tax in Austria has been abolished. Heirs who inherit a property from their relatives are assessed with the property transfer tax. This fact, at least in public, continues to ensure that there is still sufficient talk of an inheritance tax, although - in principle - it no longer exists. At the same time, as part of a tax reform carried out in 2015/2016, the real estate transfer tax was significantly increased.
At that time, the Austrian Constitutional Court abolished inheritance and gift taxes due to massive unequal treatment of financial assets and real estate. At first glance, however, this only looked like an extreme tax loss for the state. After the disclosure of the figures from 2007, it became clear that only 110 million euros in inheritance tax were paid in the entire Federal Republic of Austria. Thus, the inheritance tax could be classified as a so-called minor tax.
In the years up to 2008, inheritance tax was always a major issue in public and politics. The government in Austria has currently no plans to reintroduce an inheritance tax as a new wealth tax.
Obligation to report inheritances and gifts
Inheritances or gifts are also observed by the tax office after this point. After this date, you still must report to the tax authorities. Donations from close relatives and life partners from a rate of € 50,000.00 and donations from other groups of people with an amount of € 15,000.00 within 5 years are still subject to notification.
Failure to report to the tax office will result in fines. Groups of people who do not make a report here must expect high fines of 10.00% of the gift amount. Things that do not have to be reported include works of art or occasional gifts up to a value of € 1,000.00, including gifts in the area of household items.
The extension of the real estate transfer tax
Basically, even with a free purchase of a property, resp. to pay the property tax on a property. When calculating the corresponding amount of real estate transfer tax, there was an adjustment to the tax base. So that the triple unit value was used.
Since January 2016, i.e. after the general tax reform, the market value has been used as the assessment basis in Austria. For the first € 250,000.00 the tax rate is 0.50%, for the further € 150,000.00 the rate is then 2.00%. If there are other sums involved, a rate of 3.50% will be charged. It can be seen here that the market value, which has not been increased in advance for many years, is significantly higher than the standard value.
A tax reporting obligation also applies to donations
If it is a gift among the living, Austria is obliged to notify so-called cash grants, capital claims, company shares and so on.
However, there is no obligation to notify a free purchase up to a limit of € 15,000.00. However, this limit has a time span of 5 years. This limit is calculated so that it is measured in time from the last gift. As mentioned above, however, he values donations from close relatives or relatives differently. However, the duty to notify described here does not apply to occasional gifts.
The foundation entrance tax
If the facts to be examined are free grants to private law. Foundations or similar act, here is a design according to Foundation input control. The tax rate levied is not quite cheap at 2.50% and in exceptional cases can also be 25.00%.
International
In order to avoid double taxation of inheritance matters and matters that can be assigned to gift tax, several double taxation agreements have been initiated. The countries affected include France, the Netherlands, the Czech Republic, Lichtenstein, Switzerland, Hungary and the USA.
Due to the elimination of the inheritance tax, the Federal Republic of Germany of the Federal Republic of Austria canceled the double taxation agreement of 1954, which was once concluded. Since then, the requirements of German inheritance tax law apply to the circumstances that arise.
The EU inheritance regulation has also been in existence since 2015. This applies throughout the European Union. Existing provisions clearly state that the taxation of the inheritance case is clearly not nationality, but the place of residence, which is the decisive factor for the natural person to be taxed. As a result, the double taxation agreement is hereby fully replaced.