DRUCKEN

Taxation of Pension


Limited tax liability

Persons, who neither have established Austrian residence nor have regularly resided in Austria or have not resided in Austria for more than 6 months, are subject to limited tax liability.
The income tax regarding the pensions will be determined upon the provisions of the Income Tax Law. The deductible amount for sole wage earners and single parents as well as certain tax exemptions (for physically handicapped individuals or holders of victim passes and official certification) will not be taken into consideration.

EEA nationals and Swiss citizens

Citizens of one of the member states of the European Union or of a country, to which the treaty of the European Economic Area (EEA/EWR) applies, can be treated as persons with unrestricted tax liability, if their main income source is in Austria. Such a claim – for expired calendar years – should be presented to the tax authorities.
Current pensions are however further subject to taxation under valid regulations for limited tax liability.

Double taxation agreement (DTA)   

The double taxation agreement (DTA) serves to prevent multiple taxation in a number of countries. DTA divides taxation rights between the countries. In accordance to agreement made with individual countries, pensions transferred to a foreign country are only once subject to taxation. You will find the current list of agreements made with Austria on the homepage of the Bundesministerium für Finanzen (Federal Ministry of Finances) under www.bmf.gv.at.

If a DTA provides for the taxation in a (foreign) country of residence and thus the pension in Austria is to tax-exempt, a certificate of residence confirmed by the foreign tax authority has to be provided prior to a conversion of the tax referencing (Form ZS-QU1).