Tbilisi, 5th of May 2011 Mag. Martin Riedler Flat rate taxation schemes in Austria

2 Flat rate taxation for Income Tax purposes (partial and full flat rate taxation): Flat rate taxation for VAT purposes (refers only to the determination of deductible Input VAT) Flat rate taxation schemes in Austria/Mag. Martin Riedler/Tbilisi/5th of May 2011

3 Flat rate taxation for Income Tax purposes Flat rate deduction of business expenses (partial flat rate taxation): -General flat rate deduction of expenses -Industry-specific flat rate taxation Flat rate taxation of profits (full flat rate taxation): -Industry-specific flat rate taxation (smaller farmers, hotels and catering businesses, food retailers or grocers) Flat rate taxation schemes in Austria/Mag. Martin Riedler/Tbilisi/5th of May 2011

4 General flat rate deduction of business expenses For self employed taxpayers such as medicals, lawyers etc., and for traders Considered a special cash accounting method Income Tax Act specifies the general provisions Flat rate taxation schemes in Austria/Mag. Martin Riedler/Tbilisi/5th of May 2011

5 Requirements for General flat rate deduction of business expenses Supplies made in the preceding accounting year must not exceed € 220,000 No double-entry book keeping allowed The taxpayer has to opt for the flat rate deduction scheme in the tax form Flat rate taxation schemes in Austria/Mag. Martin Riedler/Tbilisi/5th of May 2011

6 General flat rate deduction of business expenses Business expenses are equalled to 12% of net revenues, limited to the maximum of € 26,400 For some professions a rate of 6% of net revenues is fixed, limited to the maximum of € 13,200 (e.g. for commercial or technical consultancy, Lecturers, Scientists, Teaching and educational activities etc.) Flat rate taxation schemes in Austria/Mag. Martin Riedler/Tbilisi/5th of May 2011

7 Additional Business expenses In addition to flat rate business expenses, the following (already paid) expenses may be claimed with their actual amounts: Expenses for goods, semi-finished goods, raw materials and consumable materials, Expenses for wages and incidental employment costs, Remuneration for third-party services, Social security contributions Flat rate taxation schemes in Austria/Mag. Martin Riedler/Tbilisi/5th of May 2011

8 Calculation of taxable profit Net revenues - Net expenses for goods, semi-finished goods raw materials and consumable materials - Wage costs - Net expenses for third-party services - Social security contributions - 6% or 12% of net revenues = TAXABLE PROFIT Flat rate taxation schemes in Austria/Mag. Martin Riedler/Tbilisi/5th of May 2011

9 Full flat rate taxation Flat rate taxation of profits for taxpayers working in certain industries No double-entry book keeping allowed Profits are computed as a base amount plus a percentage of the revenues Several ordinances issued by the Federal Ministry of Finance specify the provisions for each industry Flat rate taxation schemes in Austria/Mag. Martin Riedler/Tbilisi/5th of May 2011

10 Flat rate taxation for VAT purposes Refers only to the determination of deductible Input VAT Not bound to the option for flat rate taxation for Income Tax purposes General flat rate deduction of Input VAT or Industry-specific flat rate deduction of Input VAT Flat rate taxation schemes in Austria/Mag. Martin Riedler/Tbilisi/5th of May 2011

11 General flat rate deduction of Input VAT Supplies made in the preceding accounting year must not exceed € 220,000 Option for flat rate scheme is allowed for book-keeping taxpayers, too The flat rate deduction of Input VAT is generally calculated at a rate of 1.8% of total supplies made (max. € 3,960) Flat rate taxation schemes in Austria/Mag. Martin Riedler/Tbilisi/5th of May 2011