Rising energy costs: Reduction prepayments of individual and corporate income tax
Austrian companies currently face rising energy costs, which may also impact their liquidity in the short term. For this reason, the Austrian Ministry of Finance (“BMF”) stated on 1 April 2022 that it will be possible to simplified reduce prepayments of individual and corporate income tax in administrative terms. The taxpayer must be able to credibly demonstrate that the increase in energy costs has a significant economic impact.
The information issued by the BMF on 1 April 2022 (2022-0.235.942) gives two examples of cases in which a significant economic impact may be assumed:
- The taxpayer is entitled to an energy tax rebate (for the calendar year 2021 or a non-calendar fiscal year ending in 2022).
- It can be credibly demonstrated that the taxpayer has energy costs that exceed 3% of total costs. The total costs can be determined in a simplified manner by deducting the profit from the revenues (or in the event of a loss, increasing the revenues by the amount of the loss).
According to the BMF, if the prerequisites are fulfilled, it is permissible to reduce the prepayment for 2022 to 50% of the previously determined amount, provided that no reduction due to the changed economic circumstances has already been granted based on an earlier request.
Irrespective of this measure, a reduction in the prepayments can still be requested under Section 45 para 4 Austrian Income Tax Act (EStG), which permits a reduction to zero. However, the anticipated amount of the assessment base must be credibly demonstrated by submitting suitable documentation or calculations with the request.
Requests can be submitted via FinanzOnline and we would be glad to provide support.
