The COVID-19 pandemic has impacted our private and working lives in many significant ways. Working from home has become commonplace, raising numerous legal questions, both for employees and employers. The Austrian legislator had to adapt the legal framework accordingly by passing new regulations and issuing corresponding case law. Below, we discuss certain tax law matters to which special attention should be paid.
Tax benefits for employees
The Austrian legislator recently introduced the following tax benefits for employees working from home: (i) a lump sum of up to EUR 300 per calendar year, depending on the number of days worked from home, is deducted from the employee's taxable income; (ii) certain work-related expenses (including work equipment like desks or office chairs) are tax-deductible; and (iii) if certain requirements are met, work equipment necessary for the employee to fulfil their tasks from home, paid for by the employer, may be treated as non-taxable rather than as taxable salary in kind.
Potential tax consequences for (non-Austrian) employers
Non-Austrian employers with employees working from home in Austria must consider the potential tax consequences of being obliged to create an Austrian permanent establishment ("PE"). Such a PE can be created for wage tax and/or CIT purposes.
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