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Banks & Taxes in Austria
A Comprehensive Guide about Opening a Bank Account and Managing Your Taxes
Managing finances in Austria may be easier for EU/EEA nationals than for third-country nationals. For example, non-EU/EEA members may struggle to open a local Austrian bank account due to certain restrictions, such as not having a permanent address in Austria. However, more and more online banks and mobile banking apps are becoming available to residents in Austria, so as a non-Austrian citizen, you will have more banking options.
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There are lots of different bank accounts in Austria and the tax system is relatively simple to follow. Bank accounts in Austria have progressed to the stage where some banks allow you to open an account and manage your finances all on your mobile device, and you can even make contactless payments with certain apps. Like in other European countries and places around the world, income tax is progressive, and you will not pay this if you earn less than 11,000 EUR (12,136 USD) per year. Keep reading to find out more about the different options there are so you can make a choice that suits your lifestyle best.
How to Open a Bank Account in Austria
Can you open a bank account in Austria? Certainly, but you may face some obstacles. To avoid the hassle, consider contacting InterNations GO! for expert expat advice on settling-in issues, such as banking with different currencies, plus international transfer alternatives.
If you are wondering how to open a bank account in Austria for non-residents, your task will be more complicated than if you were a resident, but it is possible.
Certain banks, such as Erste Bank, allow non-residents to sign up with them. However, you will need to go to the bank in person. The best thing to do is research as many Austrian banks as you can and find out which ones offer good deals for expats.
Open a Bank Account Online in Austria as a Non-Resident
Some good news is that setting up an online-only bank account in Austria is possible. Raiffeisenlandesbank NÖ-Wien bank, for example, allows you to sign up for an account online. This means you do not have to visit the bank in person to set up an account with them.
Mobile Banking and Contactless Payments
Now, mobile payment options are available in Austria. Mobile payment apps allow you to make contactless payments via your mobile device. They are available with more modern bank accounts, from companies, such as Bunq.
PostIdent ID Check
If you decide to apply for a bank account online, you will almost certainly need to verify your identity by providing a PostIdent.
For this, there are four ways to verify your identity:
- eID: For this option, your personal information and ID card is sent over the internet to verify your identity;
- Photograph: You will provide a photograph and you record a video clip of your face to verify your identity;
- Video chat: You will input personal data and use your webcam to call a Video-Ident call center agent. This person will take your picture and verify your identity;
- Post office: You can visit a post office in person, with your personalized PostIdent coupon generated by the PostIdent portal, and an assistant will walk you through the process.
No Fee Bank Accounts in Austria
You can get an account with some banks in Austria without paying any bank fees or a minimum deposit. These are often called no-fee bank accounts. Some of the best-known providers of this type of account are:
- N26: They offer a free bank account and Mastercard, allowing you to manage your finances directly from your mobile device. You can typically set up your account online in a few minutes;
- Dadat: It is free to get an account with Dadat and you can get a 50 EUR (55 USD) start bonus if your monthly salary is more than 1,000 EUR (1,103 USD);
- Erste: You can get a 100 EUR (110 USD) travel voucher when you open an account with Erste;
- DKB: This bank offers a free checking account with no minimum income. There is no annual fee either;
- Raiffeisenlandesbank NÖ-Wien: They offer a free online student account and all banking is done online.
Required Documents to Open A Bank Account as a New or Non-Resident
To open a bank account in Austria you need the following documents or identification:
- proof of identity (such as a passport);
- proof of residency (usually a Residency Registration form and utility bills);
- proof of employment.
You can expect your bank card to arrive within four working days.
Best Banks in Austria
An example of an Austrian bank that offers benefits to foreigners is Erste bank. Bank Austria and Raiffeisen Zentralbank are also popular banks in the Alpine country. With Erste bank, you can manage funds in all currencies and get the latest exchange rates, make credit transfers in foreign currencies, and other online banking services.
Best Online and International Banks in Austria
Deutsche Bank, CitiBank and Western Union Bank are several popular international banks available in Austria.
In addition, Austria is fairly forward-thinking when it comes to online banking and there are several options to choose from if you prefer to make payments and manage your money on the move rather than going to brick and mortar banks themselves.
The best online banks in Austria include N26, Bunq, and Raiffeisenlandesbank NÖ-Wien. Erste also offers online banking, but the other three are more focused on internet banking only.
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What is the Tax System in Austria?
What is the tax system like in Austria? Like many other Western countries, Austria has a progressive income tax system, which ranges from 0 to 50%. In Austria, the more you earn, the more tax you pay. People who earn 11,000 EUR (12,136 USD) or less per year do not have to pay any income tax.
What is the Income Tax in Austria?
There are four tax bands that separate different levels of earning in the Alpine country. They start at 25% for earnings more than 11,000 EUR and go up to 55% for earnings higher than 1,000,000 EUR.
Income Tax Brackets in Austria
|Income (EUR)||Income (USD)||Tax (%)|
|0 – 11,000||0 – 12,136||0|
|11,001 – 18,000||12,137 – 19,860||25|
|18,001 – 25,000||19,861 – 27,583||35|
|25,001 – 31,000||27,584 – 34,200||35|
|31,001 – 60,000||34,201 – 66,200||42|
|60,001 – 90,000||66,201 – 99,300||48|
|90,001 – 1,000,000||99,301 – 1,110,335||50|
|Over 1,000,000||Over 1,110,335||55|
Types of Taxes in Austria
As we wrote previously, the income tax system in Austria is progressive, and ranges from 0% if you earn 11,000 EUR (12,136 USD) or less, up to the top rate of 55% for anyone who earns more than one million EUR (1.11 million USD).
The average annual salary in Austria is approximately 32,992 EUR (36,400 USD), so the average income tax percentage would be 42%, or 13,857 EUR (15,290 USD).
Companies are subject to unlimited taxation of their entire income if they are legally based in Austria.
Real Estate Transfer Tax
When income tax rates were amended in 2016, so was Austria’s real estate transfer tax. This was amended from 2% to between 0.5% and 3.5% of the value of the home that is going to be transferred between family members.
Social Security Tax
- Employer: 21.38%
- Employee: 18.12%
Sales Tax Rate
This is currently 20%.
Value Added Tax
Although the European Union sets VAT compliance rules, Austria is able to set its standard VAT rate and set reduced rates on a limited range of goods for economic reasons. If you have a business in the Alpine country, you must charge these rates, or you will be liable to pay the difference.
Standard VAT in Austria stands at 20%, while there exists reduced rates of 0%, 10%, and 13%. The 20% VAT rate is added to all other taxable goods and services.
The reduced rate of 13% is added to
- domestic flights;
- entrance to sporting events;
- admissions to cultural events and amusement parks;
- some agricultural supplies;
- wine production (from farm);
- cut flowers and plants for decorative use.
The reduced rate of 10% is added to
- take-away food;
- water supplies;
- pharmaceutical products;
- domestic transport (excluding flights);
- international and intra-community road and rail transport;
- newspapers and periodicals;
- printed books (excluding e-books);
- pay and cable TV;
- TV licence;
- social services;
- domestic refuse collection;
- treatment of waste and waste water;
- restaurants (ex all beverages);
- cut flowers and plants for food production;
- some agricultural supplies;
- writers and composers.
The 0% rate is applicable for
- Intra-community and international transport (excluding road and rail);
- hotel accommodation.
Registering for VAT
VAT rules in the country follow the Value Added Tax Act 1994. If you are a business owner and you are providing taxable supplies of goods or services in Austria, you may have to contact the tax authorities and register for VAT.
There are certain situations where this could be necessary, including
- importing goods into Austria from outside the European Union;
- intra-community sales or purchases of goods from another EU country;
- buying and selling goods in Austria;
- holding goods in Austria on a consignment stock basis;
- e-commerce sales of goods to consumers, subject to Austrian VAT registration thresholds;
- organizing live conferences or exhibitions with on-the-door payments;
- if a company is otherwise a non-VAT trader but is receiving services in Austria under the reverse charge rule;
- the self-supply of goods.
Taxes for Self-Employed People in Austria
As a self-employed person in Austria, your income will be taxed with the same income tax rates previously mentioned. Until you earn more than 11,000 EUR (12,136 USD) per year you will not have to pay any income tax. Self-employed persons have been awarded an automatic profit tax allowance of 3,900 EUR (4,294 USD) per year.
For help settling-in to Austrian life, contact InterNations GO! today. Our team of experts can help you find the best banking options in your new country, plus much more.
Do you want to relocate? If you have never moved abroad, the process will be overwhelming, and if you have, you know the burden that lies ahead. Whatever stage you are at, InterNations GO! can help you with a complete set of relocation services, such as home finding, school search, visa solutions, and even pet relocation. Our expert expat team is ready to get your relocation going, so why not jump-start your move abroad and contact us today? Best to start early!