Tax Advisor for Double Taxation in Austria – Tax and Social Security Aspects
Navigating international tax laws can be complex—especially when income is earned across borders. Whether you're an individual with ties to multiple countries or a business operating internationally, double taxation can lead to unnecessary financial strain if not handled correctly. As your trusted tax advisor in Austria, we specialize in helping clients manage cross-border tax obligations efficiently. We support you in understanding and applying double taxation agreements (DTAs), reducing your overall tax burden, and ensuring full compliance with international tax and social security regulations.
Double Taxation and Its Implications – Where Are You Liable for Taxes?
1. Legal Basis: Double Taxation Agreements (DTAs)
Double taxation agreements (DTAs) coordinate the taxation rights between Austria and other countries to prevent individuals and businesses from being taxed twice on the same income.
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DTAs are based on international models (e.g., OECD Model Tax Convention).
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They apply to Austrian tax residents who also have income or residency ties with another country.
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Each DTA regulates which country has taxing rights over specific types of income.
2. Where Are You Tax Resident?
General rule:
You are tax resident in the country where you have your center of vital interests – i.e., where your personal and economic ties are strongest.
Multiple residences:
If you maintain homes in Austria and another country, your residency status is determined by:
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Family location
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Main home
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Place of employment
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Habitual abode
Tip: If your family lives in Austria, this is often a strong indication of Austrian tax residency.
3. Taxation of Your Income
Employment income (Article 15 DTA):
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Generally taxed in the country where the work is physically performed.
Exemption with progression clause (Austria):
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If your employment income is taxed abroad, Austria may exempt it from taxation, but it will still affect your tax rate on other income.
Capital income and rental income:
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Typically taxed in the source country.
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The country of residence grants a credit or exemption to avoid double taxation.
4. Which Taxes Are Covered by DTAs?
Double taxation agreements typically apply to:
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Income tax
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Corporate tax
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Trade tax (if applicable)
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Real estate tax
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Capital income (e.g., dividends, interest)
Social Security Obligations – Which Country Is Responsible?
1. Legal Basis for Social Security
European regulations coordinate national systems to protect workers' rights.
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Regulation (EC) No 883/2004 and its implementing regulation govern responsibilities.
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Bilateral agreements between countries may specify further details.
2. In Which Country Are You Insured?
General rule:
You are generally insured in the country where you work (territoriality principle).
Multiple employment situations:
If you work in several countries, you are usually insured in the country of residence – provided that a substantial part of your activity (≥ 25%) is carried out there.
Special rules:
Apply for public officials and posted workers (temporary assignments abroad).
Exceptions:
Individual agreements may allow for deviations under special circumstances.
3. Posting of Employees and Self-Employed Persons
Employees:
Remain insured in their home country for up to 24 months if they continue to be employed by their home employer and are temporarily working abroad.
Self-employed persons:
Can also be posted abroad for up to 24 months, if they carry out a comparable activity.
4. Certificate PD A1
Required to prove social security coverage in a particular country.
Issued for cross-border employment or temporary postings abroad.