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Economic Stimulus Act: easing the burden, enabling investment
 
Finance Minister Blümel: declining-balance depreciation possible from 1 July, tax deferrals automatically extended until 15 January 2021, first tier of wage and income tax retroactively reduced to 20%.
 

“Coronavirus has thrown many countries off track. The €50 billion package is designed to put Austria back on track”, said Finance Minister Gernot Blümel at the press conference on the end of the review of the comeback package. Three priorities have been identified for the €50 billion package: safeguarding precious jobs and businesses, easing the burden on people and investing in the economy. As part of the Economic Stimulus Act, the Federal Ministry of Finance ordered a review of the specific relief measures and investment incentives. The parliamentary allocation is to begin as early as next week to ensure that the measures take effect and reach the economic sphere quickly.

One of the relief measures is the reduction of the first tier wage and income tax from 25% to 20%. “This amounts to a volume of around €1.6 billion, so that more money will remain in people’s pockets. The reduction is being implemented retroactively, as of 1 January 2020, and will be paid out from the autumn”, said Finance Minister Blümel.

“In addition to this reduction, we want to create investment incentives, so that entrepreneurs have a prospect of lucrative gains. In my view, the declining-balance depreciation is a small economic revolution”, Finance Minister Blümel added. From as early as 1 July 2020, it will be possible to depreciate 30% of the book value of a capital asset per year. “This will enable entrepreneurs to structure investments in a tax-optimised way and should also stimulate investment in general”, the Finance Minister continued.  

In addition, by means of a change in the law, tax deferrals that had previously been granted until 1 October 2020 are being automatically extended to 15 January 2021; there’s no need for a separate application. “We are implementing these measures to put Austria back on track and to restore optimism”, Blümel concluded.