Income Tax and VAT Reforms: The Key Points of the Tax Amendment Act 2022

At the beginning of the month, the National Council enacted the Tax Amendment Act 2022. Here’s an overview of the Income Tax and VAT Reforms:

  • Income derived by a business enterprise from the supply of electric energy to the power grid out of the Photovoltaic Installation is subject to income tax (with a nontaxable assessment amount of € 730). However, a tax exemption is now available for small Photovoltaic Installations.  The supply of electric energy of up to 12500 kWh by a natural person is tax exempted when the bottleneck capacity of the installation does not exceed 25 kWp.
  • It was clarified that for the Employee Profit Sharing, an employee with more than one employer is only entitled to a total of € 3000 tax exemption per calendar year.
  • The weekly, monthly, or yearly ticket expenses for public transportation incurred by the company constitute business expenses. A self-employed person can deduct from tax 50% of the cost incurred by an individual for nontransferable weekly, monthly, or yearly tickets, when it is clear that the tickets are used for business trips as well, not only for private usage.
  • research premium for research and experimental development expenditures of a domestic company or a domestic business establishment can be already claimed by cash basis taxpayers and cash accounting taxpayers (“Einnahmen-Ausgaben-Rechnung”). With the enactment on July 7, 2022, the basis for calculating this premium is now extended with a fictitious owner’s salary for a demonstrably carried out research and experimental development activity. Furthermore, partial payment of the research premium is now possible.
  • Regarding to the changes in VAT, the simplified rules wherein chain transactions only refer to a three-way deal are now modified to include more than 3 companies. Nevertheless, only one of the participating companies in this chain transaction can potentially claim the simplification specifically the company that is doing the purchase within the EU, in this case, the recipient of the goods.
  • For the delivery and acquisition of face masks within the EU, the 0% VAT tax rate is extended up to 30 June 2023

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