Tax Amendment Act 2022 passed – key changes at a glance

At the beginning of July, the Abgabenänderungsgesetz (AbgÄG) 2022 was passed in the Nationalrat. The following is intended to provide a summary of the essential new features or changes.

Adjustments to the research premium

The research grant funds expenses for research and experimental development and has been increased since January 1, 2018 to 14 %%. The AbgÄG 2022 brings changes regarding employer wages, application deadline, and partial payment, which are particularly interesting for small businesses and start-ups. In general, wages and salaries, direct expenses, and investments, financing expenses, and related overhead costs are eligible for funding and thus form part of the calculation basis for the research grant (tax-free subsidies are to be deducted). Now, a fictitious entrepreneurial wage can additionally expand the base for calculation, whereby the fictitious entrepreneurial wage is possible for sole entrepreneurs, co-entrepreneurs, and partners of a capital company who work for free. A fictitious entrepreneurial wage can, of course, only be set if no salary or wage has previously been paid for the entrepreneur’s activity, because this component would otherwise be included in the base for calculation anyway. The fictitious entrepreneurial wage amounts to €45 per working hour for research & development purposes and is capped at €77,400 per person and financial year. The hours completed must be demonstrated through time recording and a more meaningful description – such an explicit requirement for proof has not previously been a topic within the research grant. The fictitious entrepreneur’s salary can be claimed for applications after June 30, 2022, and applies to the research grant for the 2022 calendar year.

Previously, the deadline for claiming the research premium was that the application for the research premium (Form E 108c) could be submitted no later than the entry into force of the relevant tax, corporate income tax, or determination notice. The reason for this rule is that the assessment of the research premium application can often be linked to the assessment of the tax return. In practice, however, the problem often arises that research premium applications are submitted earlier than the tax return due to the quota system. The AbgÄG 2022 uncouples the application deadline for the research premium from the tax assessment (the entry into force of the decisions). The application deadline for the research premium begins after the end of the relevant business year and is available for four years - this applies already for the 2022 research premium (applications after June 30, 2022). For regular fiscal years, the deadline ends at the end of the fourth calendar year; in the case of a fiscal year that deviates from this, the deadline ends at the end of four years, calculated from the respective balance sheet date. By the way, applications for the research grant can now only be submitted via FinanzOnline.

The third significant change in the research grant area is based on the fact that research grant applications typically include several research projects or research areas, and delays in the payment of the grant can occur if the application is not immediately and fully approved. Now the possibility of partial reimbursement and thus partial payment has been created in relation to the undisputed part of the application. Partial reimbursement is made at the request of the taxpayer and is at the discretion of the tax authority. Disputed parts are delimitable matters such as research projects and/or research areas, but not individual legal issues or parts of the case.

Tax exemption for photovoltaic systems

The generation of electricity from photovoltaic systems into the public grid results in taxable income from commercial activity. A tax exemption has now been created for smaller photovoltaic systems as of the tax year 2022 (since only private systems and self-consumption are eligible, not commercial purposes, the exemption is limited to systems with a peak power output of 25 kilowatt peak (kWp)), so income from the generation of a maximum of 12,500 kWh of electricity from photovoltaic systems is tax-free. If this threshold is exceeded, the exemption applies in proportion to a deductible amount.

Öffi ticket and commuter discount

Self-employed persons can now deduct a flat-rate amount of 50 % of the expenses for annual (network) cards and other network cards such as weekly and monthly cards as operating expenses, provided that the (non-transferable) network cards are used for both business-related and private trips. For employees, it should be clarified that neither the provision of a weekly, monthly, or annual card for mass transportation nor the employer's assumption of the costs does not lead to a taxable benefit from non-self-employed work.

Regarding the commuter fare, it is clarified that in principle, the commuter fare for the route between the employee’s home and workplace is the decisive factor, provided that the employer provides the employee with a ticket free of charge or assumes a cost share. The employer’s contribution or the value of the ticket allocated by the employer must be deducted in this case.

Employee profit sharing

It is stipulated that individual employees may not receive more than €3,000 in tax-free employee profit participation in a calendar year, especially if they are employed by several employers. Any amount exceeding this must be remitted for tax purposes.

VAT interest

According to the case law of the European Court of Justice, interest on sales tax claims must be paid in accordance with tax neutrality. The AbgÄG 2022 now introduces a interest rate regulation exclusively applicable to sales tax (Section 205c BAO), whereby the (sales tax) interest rate is 2 % % above the base interest rate. In the case of credits from UVAs, the interest period begins on the 91st day after the submission of the advance notification and ends with the posting of the credit to the tax account. However, if the credit is only claimed in the annual sales tax return, the interest period only begins on the 91st day after the submission of the annual return. The prerequisite for interest accrual is that a credit was actually claimed in the respective advance declaration or annual return. Similarly, tax refunds for sales tax are also subject to interest. Interest on sales tax of less than €50 is not required to be charged. Interest on credits for sales tax is generally also granted even if the recording of the UVA is delayed due to regulatory audits by the authorities.

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