Special expenses and exceptional costs
Special expenses and exceptional costs reduce income.
In general these rules also apply to all citizens and traders from EU Member States in Austria.
Special expenses (Section 18 of the Income Tax Act [EStG]) are specifically expenses, not already deductible as business or occupational expenses, for
- personal insurance (e.g. voluntary health insurance, pension fund contributions)
- creation of housing (e.g. community contributions [Genossenschaftsbeiträge], home construction costs)
- refurbishment of housing by authorised professionals (e.g. replacement of windows)
Such expenses are generally subject to a maximum limit and have an allowance rate of one-quarter (‘special expenses pot’ [Topfsonderausgaben]). Deductions are permitted up to a personal maximum of EUR 2 920 per annum (the personal maximum level is increased to EUR 5 840 for sole earners and single parents). Where income is above EUR 36 400 the deductible amount is further reduced and above EUR 60 000 expenses are no longer deductible.
This ‘special expenses pot’ is being phased out from 2016 and in the years 2016 to 2020 can continue to be deducted only if the insurance contract or actual building or refurbishment work commenced, or the loan for construction or refurbishment was taken out, before 2016.
Costs for voluntary additional insurance and the subsequent purchase of additional insurance periods, however, continue to be allowable without restriction (even after 2015).
The following are also deductible:
- Church contributions of up to EUR 400
- Private donations up to a maximum of 10% of total income, for privileged recipients, in particular humanitarian institutions, institutions for the protection of nature and the environment, privileged institutions in the field of science and adult education, animal homes and volunteer fire brigades (see Section 4a EStG and the list of privileged recipients). Donations provided out of business assets to privileged recipients are deductible as business expenses.
- Costs of tax advice (but only in exceptional circumstances, as costs of tax advice should normally be deducted as business expenses or occupational expenses)
- Certain annuities
Deductions of losses also count as special expenses.
Donations, church contributions and contributions to voluntary additional insurance or the subsequent purchase of additional insurance periods must, from 2017, be notified electronically to the tax office by the receiving institution (as with payslips) and are then automatically included in the assessment. Detailed information on the topic of ‘Deduction of donations (NEW)’ can also be found at oesterreich.gv.at.
Exceptional costs (Sections 34 and 35 EStG) include, for example, costs of disabilities, sickness or external vocational training of children. In certain cases (e.g. costs of sickness, although not expenditure due to disability), the costs must exceed an income-related patient’s contribution to have an effect on taxation.
Responsible for the content: Federal Ministry of Finance