[definition title=’About the author’ text=”Andreas Stoiber is a 37 year old tax consultant and runs a consultant office in Vienna together with managing partner Gernot Jakobs. He has a degree in business economics and has accompanied many successful startups in Austria on their way. Besides his work in the consultant office, Stoiber is also a vintner and enjoys inviting clients to tastings.” text=”The year 2014 will be over soon. Thus, it is advisable to make a quick check of your profit and the expected tax burden before the end of the year. The following article provides a brief overview of the most common ways to minimise your tax burden.”]
Taxfree allowance (Gewinnfreibetrag)
All natural persons, with any type of operational income, can claim the tax- free allowance, no matter if they determine their profit on a cash or on an accrual basis. There are two types of tax- free allowance: the basic tax-free allowance and the investment based tax- free allowance.
While the basic one amounts to 13 per cent of profit up to 30,000 euros, there are no investments required and it is automatically considered by the tax office. The maximum basic tax- free allowance is 3,900 euros.
The investment based one, on the other hand, is limited through scale percentages (VCT link) and can be claimed only if fixed assets (not applicable for cars) or mortgage bonds were acquired. Tip It is important to forecast your profit, so that you can acquire the needed assets before the yearend. Please be aware that the mortgage bonds may be no more on hand, so do not wait until 30 December.
Low value fixed assets
Fixed assets with a value of maximum 400 euros, can be immediately considered as expense. If you are planning to purchase such assets in 2015, it is probably a good idea to prepone the investment in December 2014 and achieve a tax advantage earlier.
Investments in fixed assets
For all fixed assets – tangible and intangible – bought until 31 December you can deduct half of the yearly depreciation.
Dislocation of revenues and expenses
If you determine your profit on a cash basis, then the revenues are recorded in the books when cash is received and the expenses are recorded when the cash is paid out. If you expect to make a profit in 2014 you can reduce the tax assessment basis, and respectively the tax burden, by allocating the expenses in 2014 and postponing the revenues in 2015.
Christmas party and presents
Tip As an entrepreneur you can also make donations in kind.
As it is Christmas time now, you are surely planning to have a Christmas party with your employees. The expenses for it are generally considered as operational expenses and up to an amount of 365 euros (per employee), they are neither subject to payroll tax nor social security contribution.
Furthermore, you will bethe coolest boss, if you make your employees some Christmas gifts. As you can guess, the presents are operational expenses and are free of payroll tax up to the amount of 186 euros per employee and year.
Your donations will not only be used for a worthy cause, but they also can help you to minimise your tax assessment base, as you can deduct them as an expense. However the deductible donations are limited with 10 per cent of the yearly profit.
Get more tips on how to minimise your tax burden here.
In partnership with Vienna CityTax