Cross-border workers in Austrian tax law

As a cross-border commuter, those taxpayers are referred to whose primary residence near the state border lies and by an activity beyond the border Earnings from employment achieve. A fundamental requirement for being treated as a cross-border commuter is that a basically daily Return from the place of work to the place of residence and thus involves crossing a border. Cross-border commuters can be residents of Austria who cross the border to work abroad, as well as individuals who carry out their activities in Austria and then return to their place of residence abroad. The following explanations refer to Cross-border commuters with their main residence in Austria. The term "cross-border commuter" (Grenzgänger) should be distinguished from that of "border commuter" (Grenzpendler). A significant difference is that the "border commuter" determination is not limited to employees.

For the tax treatment of cross-border commuters, in addition to national law, due to the international context, the respective Double taxation agreement significant – are partly found in the DTA even Special provisions for cross-border commuters. Essentially, it concerns the following questions: Does the country of residence have the exclusive right to tax? May the country of employment retain withholding tax? How is the threat of double taxation prevented?

Principal residence and place of work must be located near the border

Austria has its own Cross-border worker clauses in the DBA with Germany, Liechtenstein and Italy – although no longer in the double taxation agreement with Switzerland. Common to all three double taxation agreements is that to qualify as a cross-border commuter, the (main) place of residence and the place of work must be near the border. Only in the double taxation agreement with Germany is the term Border area Met 30 km as the crow flies more precisely defined. The EStR 2000 assume that a place of work is still near the border if, under modern traffic conditions and based on a reasonable travel time Possible is, the place of work Daily to drive from the place of residence. With regard to cross-border commuters residing in Austria and employed in a neighbouring country, the double taxation agreements with Germany and Italy show Austria the exclusive right of taxation . The Principality of Liechtenstein is entitled to a withholding tax of up to 4% – double taxation is prevented in Austria by Credit for the retained Withholding tax prevents.

When it comes to national taxation, there are few differences compared to domestic employees; for instance, the preferential taxation of Holiday and Christmas bonus or from allowances and supplements, also for cross-border workers. In addition, they have a Frontier worker allowance from €54 per year, though this may be reduced by the employee tax credit (if the conditions for it are met). Cross-border commuters are also entitled to the Commuter allowance for the entire journey between home and work. Now, commuters can also choose Negative income tax claim a refund – this is capped at 10% of compulsory social security contributions or €110 per year.

Unless the DBA makes special provisions for cross-border commuters, the DBA Regulations About Dependent employment for application. The double tax agreements with the 5 neighbouring countries without special provisions for cross-border workers – Slovakia, the Czech Republic, Hungary, Slovenia and Switzerland – show the Tax law I'm Standard case dem Home state which results in this income Not may be taxed in Austria. However, the domestic tax office includes the exempted (foreign) income in the calculation of the tax rate for other income (Reservation of progression. The country of employment's right to tax income from employment may, in contrast to the cross-border worker scheme and the associated taxation in Austria, Positive affect, provided that taxation abroad low as it is in Austria. Although, for example, Eastern European countries with nominal low (top) tax rates to appear attractive, the components of the Taxable amount as well as fundamental tax frameworks to consider.

Cross-border commuters do not have to „always“ commute

The number of days on which „commuting across the border“ takes place is not insignificant for classification as a cross-border commuter, as the regular exercise at the place of work and return residence requirements are. Although the BMF assumes „commuting abroad“ is a prerequisite for at least three working days per week, the VwGH (GZ 2001/15/0113 of 24.6.2004) considers even one day per week to be sufficient, provided that the extent of employment is also fundamentally limited to one day. It would be unjustified if the status of a cross-border commuter existed for non-self-employment activity carried out in a border region five days a week, and this status were automatically denied for a shorter duration. The status of a cross-border commuter should be assumed even in the case of merely marginal employment, provided that proximity to the border and regular commuting are met. Those DBA with their own border commuter regulations usually Tolerance arrangements so that the cross-border commuter status is not lost, for example, due to temporary activities outside the border area.

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