High inflation is also driving up tax brackets – nearly four percent over the next year. With the end of cold progress, two-thirds of the creeping tax increases flow back automatically, but one-third is distributed politically. That’s around 650 million euros for the coming year. The turquoise-green federal government presented its division on Thursday.
Since the leadership of the government was in Leipzig for the European Championship match on Tuesday evening, the agreement was only presented on Thursday. But with the Chancellor, the Vice-Chancellor, the Minister for Finance and Social Affairs. Apart from the semi-official visit to the cabin by Karl Nehammer and Werner Kogler, this was the first joint appearance by the government leadership since the quarrels over the EU’s naturalization law.
The Government has shown an ability to act
At the outset, Nehammer discussed the fact that the government’s ability to act has been in question ever since. They promised to continue to rule. “And we kept that promise,” Nehammer said. Kogler also emphasized: “You see, this government is in charge.” The third to be distributed from the end of cold progression will be put into a greater increase in tax brackets, full compensation for inflation in tax deductions and measures in the area of companies. The mileage allowance will also be increased.
Specifically, the tax brackets for next year will increase by almost four percent. From 2025, the limit for the first tariff level is 13,308 euros, the second tariff level is 21,617 euros, the third tariff level is 35,836 euros, the fourth tariff level is 69,166 euros and the third tariff level is 69,166 euros. It is 103,072 euros. As Finance Minister Magnus Brunner explained, the first tariff level before the end of the cold progress was 11,000 euros. From 2025 onwards, taxes will only be payable with an income of 13,308 euros.
The limit for small businesses is now 55,000 euros
The mileage allowance for cars, motorbikes and bicycles will be 50 cents per kilometer in future. The ÖGB and the Labor Association, among others, called for this increase. In addition, the so-called limit for small businesses will increase to 55,000 euros (currently 35,000 euros). This limit determines whether you are still considered a small business owner or whether you are subject to regular taxation.
Day and night allowances will also increase, which can reach 30 euros from next year. For single earners or single parents working on a low income, a child allowance is provided in the form of an increased deduction of 60 euros per month and child. Social Minister Johannes Rauch called it a “balanced package”, and the ÖVP highlighted the “high performers” who benefited from it. In the previous year, a third went into a larger adjustment of the tax brackets for small and medium incomes.