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The Annual Tax Act is an omnibus law that impacts various other laws. Accordingly, it contains numerous individual provisions that are not thematically connected.
Key Changes for Businesses in the Annual Tax Act
The Annual Tax Act 2024 introduces several changes for self-employed individuals and small businesses, such as:
- Changes to the Small Business Regulation
The turnover thresholds are increased to €25,000 in the previous year and €100,000 in the current year. The transitional provision for gradual application of standard taxation is removed, simplifying the regulation.
- New Rule for Improper VAT Disclosure
Improperly disclosed VAT in credit notes will now lead to a tax liability even without an underlying transaction. This requires greater care when issuing invoices.
- Input Tax Deduction with Cash Accounting
Input tax deduction will only be possible after payment has been made. This could affect liquidity and necessitates adjusted financial planning.
- Expansion of E-Balance Data Requirements
From 2025, account evidence must be submitted electronically, and by 2028, additional documents like appendices, management reports, and audit reports will also need electronic submission.
- Definition of Supply of Works
A clear legal definition of a supply of works provides legal certainty for craftsmen and businesses in billing.
- Simplification of VAT on Digital Services
Digital services will now be taxed based on the recipient's location, facilitating and standardizing international transactions.
- Invoice Details for Small Businesses
The regulation clarifies mandatory details in invoices for small businesses and stipulates that e-invoices are not mandatory for such entities.
- Changes in Household-Related Services
Tax benefits are only available if an invoice is provided and payment is made via bank transfer, aligning with a Federal Fiscal Court ruling to prevent abuse.
- Legal Clarity on Mobility Benefits
Tax-free allowances and benefits for employees regarding mobility are clarified, promoting sustainable transportation and preventing misunderstandings.
- Extension of Investment Deadlines for Investment Deduction Amounts (IAB)
Companies gain additional flexibility as deadlines for planned investments have been extended, offering planning security and alleviating liquidity constraints.
- Increase in Saver’s Lump Sum
The lump sum will rise to €1,250 for individuals and €2,500 for married couples from 2024, benefiting business owners with private capital gains.
- Introduction of Electronic Proofs for Disability Allowances
Starting in 2026, disability allowance documentation must be electronically submitted, impacting companies supporting employees with tax benefits.
- Adjustment of Rules for Tax-Free Subsidies
Tax-free mobility or meal subsidies must be precisely documented and disbursed according to specific requirements, simplifying application and reducing errors during audits.
- Introduction of Tax Relief for Research and Development (R&D)
Expanded eligibility for research tax allowances aims to boost innovation. Companies benefit from improved tax incentives for R&D expenditures.
- Reform of VAT Exemption for Educational Services
The exemption aligns with EU directives, covering lessons provided by private tutors as VAT-exempt.
- Reduced VAT Rate for Art Objects
Starting in 2025, the reduced VAT rate will again apply to art deliveries, benefiting art dealers and buyers.
When Does the Annual Tax Act 2024 Take Effect?
The Annual Tax Act comes into effect largely on the day following its publication. Numerous individual provisions take effect on different dates, with many starting as early as January 1, 2025.
Federal Law Gazette Part I, No. 387/2024 of December 5, 2024
