Setting up Self-Employed (Neue Selbständige) and freelancer taxes in Austria

To work in Austria, you must have residency rights in the country. This applies to freelancers as well as the self-employed. For example, you must be a citizen of an EU or EEA country, or already have a residence permit which entitles you to be self-employed. Because of this, it can be a little tricky for an ex-pat to be a freelancer. In addition, you have to be at least 18 years old.

There is no single category of self-employment in Austria; in reality, it is quite complex. According to social insurance laws, self-employed individuals fall into four groups. In Austria, self-employment is possible as:

• A new independent contractor (Neue Selbständige)
• A liberal specialist (Freiberufler)
• A self-employed individual who possesses a free or regulated business license (Freie/ Reguliertes Gewerbe).
• An independent contractor (Freie Dienstnehmer)

Each category is subject to unique laws and fees. Someone that is self-employed generally owns their own company that they register as a sole proprietorship. As such, this category covers many entrepreneurs, small business owners, and startup founders. Notably, Austria has a subcategory called “new self-employed”. This refers to professionals such as authors, experts, translators, and musicians, and are not considered freelancers. This blog post will focus on the process of becoming a new independent contractor, or Neue Selbständige.

New self-employed individuals are not considered members of WKO, the Austrian Chamber of Commerce, hence no membership cost applies. They are professionals registered with the Tax Office (Finanzamt) and are required to file an annual income tax return.

The cost of insurance contributions to the SVS is proportional to the enterprise's gross income. In some instances, insurance contributions are optional (usually for pension and health insurance). It is an enticing consideration when selecting a business type.

Small businesses are exempt from the requirement to register for VAT if their annual gross revenue is less than 35,000 euros.

Artists, writers, journalists, professors, (self-employed) nurses, midwives, scientists, self-employed psychologists, and therapists are some of the professions that fall under the new self-employed in Austria.

The following are the general characteristics of the Neue Selbständigen in Austria:

• Self-employed who rely primarily on their own operating funds
• Managing partners of a limited liability firm (known as a GmbH) who are not insured by their employment.
• limited business associates
• Individuals with employment contracts who are not members of the Austrian Chamber of Commerce- WKO are considered non-members (service has been agreed for work contracts)
• Partners with personal liability in a partnership

Registration of Neue Selbständige in Austria

The deadline for registration is four weeks from starting the professional activity.

1. Open a FinanzOnline account, which is the Austrian Tax Office's official website. In approximately ten business days, you will receive the access data (Login, PIN, and password) via mail after submitting the essential information.

1. Submit a request for your tax number using FinanzOnline after you have your login credentials. If you already have a tax identification number, you should navigate to the category More services ("Weitere Services") and select Explanation of change ("Erklarungswechsel" - only applicable if you make income from self-employment).

Pay close attention to the following fields when completing the following form: projected yearly revenue for the following year, estimated profit for the opening year, and estimated profit for the following year. Verify the accuracy of your other personal information to minimize delays and any problems.

1. If you do not have a tax number and have never filed a tax declaration in Austria, you must seek one by selecting More services ("Weitere Dienste") and Tax number request ("Anforderung Steuernummer").

1. If you have already filed a voluntary tax return ("Freiwillige Arbeitnehmerveranlagung"), a tax number has already been allocated to you. Since tax numbers do not change, you should use this number for your registration.

It takes FinanzOnline five to ten business days to process your request, so if you haven't heard from them after ten days, call your tax office and inquire whether you need to provide any further information or papers.

NEXT: Health insurance and social security

All freelancers and self-employed workers will need to register for freelance tax in Austria as well as health insurance and social security . In order to register for an Austrian Taxpayer Registration Number , you will need to fill out several forms and submit them to the tax office. In addition, your client(s) should issue you a statement of terms and conditions (in place of an employment contract) and is/are legally required to register you for social security.

The institution responsible for handling social contributions for the self-employed in Austria is call Sozialversicherungsanstalt der Selbständigen, or SVS, for short. You can register at SVS in several ways:

• by filling in the application form online and sending it by mail to SVS
• by filling in the application form electronically and emailing it to SVS.

Here you can find the application form.

Taxation

As an independent contractor, you will have to pay freelance tax in Austria. That said, this is only if you surpass the tax-free threshold of €11,000. However, even then, you will have to submit a tax declaration. Additionally, if you make more than €30,000, you have to deal with value-added tax. Although tax is levied on a progressive scale, you can expect to pay a freelance tax in Austria of about 25%.

Tax declaration submission deadlines - Tax returns must be filed in the year after the year being reported on. If you do submission online (FinanzOnline) deadline is the end of June for the previous year.

In Austria, there is a social insurance scheme for freelancers or SVA ( Sozialversicherungsanstalt der Gewerblichen Wirtschaft ). You will also have to get several types of insurance , which are all charged at different rates, including:

• Accident insurance – 1.2%
• Sickness insurance – 7.65%
• Pension insurance – 18.5%
• Unemployment insurance – 6%

In addition, you will need to pay €11.95 for your European Health Insurance Card (EHIC) and 20% of your medical fees. You may also have to get a Selbstständigenvorsorge , which is a retirement bonus on top of your normal pension. However, this depends on your income and is only mandatory if you make more than €5,256.60 a year.

VAT

The standard VAT rate in Austria is 20%, with reduced rates of 13%, 10%, and 0% applying to a few products.

Mandatory to apply for VAT:

• If your annual revenue is more than €35,000
• If you plan to invoice cross-border customers

You can register yourself by filling the U15 form at the Federal Ministry Republic of Austria Finance . While the website offers both German and English translations, the U15 form is only provided in German.

Next, you are required to submit documents, including

• A copy of Articles of Association
• A signature specimen
• A copy of an extract from your national trade register
• If your services are registered somewhere else in the EU, the VAT Certificate

Finally, you will be assigned a VAT identification number.

Alternatively, you can use Abillio - invoicing and tax compliance service for cross-border freelancing. In Abillio's case, you don't need to establish a legal entity, open bank account or apply for VAT - with Abillio's company-as-a-service solution you can start your freelancing business right away. Register your free account here >>

Note: This information is from official sources and should not be considered as a substitute for legal advice. Always check official websites or consult a lawyer or tax consultant before taking action.