🎧 Listen to This Article
Austria is navigating through a challenging fiscal landscape, with the government’s foremost priority being to reduce the national budget deficit. A series of legislative initiatives have been launched to strengthen the financial system and build stronger banks, which will support the government’s policies to boost the domestic economy.
The Austrian Finance Ministry has taken significant steps by sending proposed tax and revenue measures for public consultation as part of the broader budget consolidation plan. Following the initial €1.25 billion package passed in the first week after the new government took office, today marks another crucial development, as 12 new measures, amounting to €76 million this year and €696 million in 2026, are now under review. These measures focus on both enhancing revenue collection and introducing targeted tax relief.
Key Measures in the 2025–2026 Budget Plan
A core aspect of this budget consolidation plan is the reduction of the deficit by €6.4 billion in 2025 and €8.7 billion in 2026. Finance Minister Markus Marterbauer stated, “While the fiscal situation is serious, we must approach this task collectively. We aim to reduce the budget deficit without burdening economic growth or employment, ensuring that those who can contribute more carry a greater share of the load.”
The proposed tax measures include increased taxation on property transactions involving “share deals,” introducing a surcharge for land sales after zoning changes, and increasing the foundation entry tax. Additionally, gambling taxes will see an increase, and certain inflation adjustments will be suspended. These actions, along with the restructuring of energy crisis contributions, are expected to generate significant revenue, ensuring the sustainability of Austria’s finances.
Relief Measures for Citizens and Businesses
The budget plan also includes several relief measures designed to ease the burden on the population and promote economic stability. Notable provisions include:
- Increased commuter benefits: The commuter allowance (Pendlereuro) will rise from €2 to €6 per kilometer.
- Non-taxable employee bonus: A tax-free employee bonus of up to €1,000 per employee for 2025, with a similar bonus planned for 2026.
- Support for small and medium enterprises (SMEs): The basis for income tax will be raised for SMEs, facilitating better growth prospects.
- VAT exemption: Women’s hygiene products and contraceptives will be exempt from VAT, providing economic relief to consumers.
Strengthening Financial Stability
In addition to these measures, the government is focused on bolstering the financial sector. The new Budget Consolidation Package includes provisions to safeguard against insolvency risks, reducing the impact of financial instability on the public. The creation of a dedicated fund for handling banks in distress is a key feature of this initiative. The National Bank will play a crucial role in overseeing these procedures, ensuring that taxpayer money is only used in exceptional circumstances.
A Step Toward Balanced Economic Growth
Barbara Eibinger-Miedl, State Secretary for Finance, emphasized, “The proposed reliefs are designed to provide a boost to the Austrian economy, ensuring that it remains competitive and resilient, particularly as we recover from global financial disruptions.” The government’s plan is to continue implementing sustainable reforms, ensuring that Austria’s fiscal policies align with European Union standards.
For further details, clarification, contributions, or any concerns regarding this article, please get in touch with us at editorial@tax.news. We value your feedback and are committed to providing accurate and timely information. Please note that our privacy policy will handle all inquiries.
