TAX MEASURES AT THE TURN OF THE YEAR 2025/2026

There are a number of year-end tax planning measures that can be taken to reduce or optimise the tax burden on Austrian taxpayers and companies for the year 2025. Some of the most important ones are as follows:

Depreciating Work Equipment as Business Expenses

Generally, expenses for the acquisition of items used predominantly for professional purposes can be claimed as business expenses for tax purposes. For depreciable items with acquisition costs exceeding € 1,000 (including VAT), these costs must be spread over their useful life through depreciation. Therefore, purchases made before the end of the year are tax-advantageous, as at least half a year's depreciation is still possible.

Commuter Allowance

It is advisable to check at the end of the year whether you are eligible for the commuter allowance. The amount depends on both the distance travelled and the number of commuting days. Eligibility is met with as few as four days per month.

Home Office Allowance

To compensate for additional expenses, the employer can pay up to € 3 per day of working from home tax-free. This is possible for a maximum of 100 days of working from home per year. Thus, up to € 300 per year per employee can remain tax-free.

Claiming Business Travel Expenses

If employees receive no or only partial reimbursement of tax-deductible travel expenses from their employer, they can claim the remaining expenses, in whole or in part, as business expenses. Costs for any business-related trip – provided they are not reimbursed by the employer – can be claimed as business expenses. Commuting between home and work is excluded from this allowance.

Deducting Training and Professional Development Costs

Costs for training and professional development can also be considered for tax purposes, such as job-related courses or seminars that serve to improve knowledge and skills in the performance of that employment.

Claiming the Special Eco-expense Allowance

Expenses for the thermal and energy-efficient renovation of buildings and the replacement of fossil fuel heating systems can still be claimed as special expenses. This includes, for example, the insulation of exterior walls, the replacement of windows, or the replacement of an oil or gas heating system with a more climate-friendly heating system.

Low-Value Assets

Assets with acquisition costs of up to € 1,000 (amount excluding VAT if input tax deduction is possible, otherwise including VAT) can be fully expensed in the year of acquisition.

Income Tax Burden

The income tax burden for 2025 can still be influenced by accelerating expenses for accrual-basis taxpayers or by accelerating expenditures and deferring revenues for cash-basis taxpayers.

For example, payments for maintenance or repairs to business premises or machinery, etc., carried out this year can be fully deducted as business expenses in 2025. Advance payments on social security contributions are also recognized as business expenses. Regularly recurring income or expenses are allocated to the calendar year to which they economically relate if they are received or paid within 15 days before or after December 31st.

Donations from Business Assets

Donations from business assets for research and teaching purposes to specific institutions, as well as donations for charitable purposes, are tax-deductible up to a maximum of 10% of the profit before any tax credit. Tax deductible. A list of eligible recipients is available on the Federal Ministry of Finance's website.

In connection with acute disasters—such as the current war in Ukraine—businesses can claim aid provided in cash or in kind as a business expense. Disasters include natural disasters as well as damage from wildfires, earthquakes, etc, acts of war, terrorist attacks, or other humanitarian disasters (e.g., epidemics, famines, refugee crises). These donations can be deducted without limit under certain criteria.

Employee Benefits

Employee benefits through premiums for life, health, and accident insurance policies are tax-free up to € 300 per year. Since 2020, gifts in kind to employees on a service or company anniversary as well as other occasions remain tax-free up to €186 (e.g., Christmas gifts). Costs for company events (e.g., Christmas parties, company outings) remain tax-free up to € 365 per employee per year.

Volunteer Work

Volunteers can receive a tax-free flat-rate expense allowance for:

Small volunteer allowance: up to € 30 per day / up to € 1,000 per year

Large volunteer allowance: up to € 50 per day / up to € 3,000 per year

Retention Period for Books and Records

The 7-year tax retention period for books, records, receipts, and business documents from 2018 expires on December 31, 2025. Beyond this, receipts must be retained as long as they are relevant to pending tax proceedings. Records and documents relating to real estate must be retained for up to 22 years due to potential input tax refunds. Documents must also be retained if they are relevant to pending legal or administrative proceedings.

If you have any questions or require further information, please do not hesitate to contact us.

(c) Picture by olia danilevich