Eco-social tax reform 2022

Tax-free profit sharing for active employees

• Up to EUR 3,000 per employee per calendar year
• In total max. up to the EBIT (alternatively: Group EBIT) of the last fiscal year
• To all or certain groups of employees (company-related group characteristics, e.g. length of service)
• Not granted in lieu of previously paid wages or a customary wage increase
• As of the 2022 assessment
• Currently no exemption from social security contributions and other non-wage costs

Workplace allowance for use of private living quarters in the case of company income

Requirements:

• No other work space attributable (to be considered per business)
• No (additional) tax consideration of a work room located in the residential unit
• Flat rate of EUR 1,200 p.a. if income from another gainful activity for which a room outside the home is available is less than EUR 11,000; otherwise flat rate of EUR 300 p.a. (on a pro rata basis if the business activity begins or ends during the year)
• Expenses for ergonomically suitable furniture up to a maximum of EUR 300 p.a. are also possible
• As of assessment 2022

Increase of the profit allowance to 15%

• For the first EUR 30,000 (= so-called "basic allowance")
• The graduation and the percentage from EUR 30,000 (= investment-related profit allowance) remain unchanged
• For fiscal years starting after 31.12.2021

(Re-)introduction of investment allowance

• Additional operating expenditure (excluded in the case of flat-rate profit determination)
• 10 % of the acquisition or production costs (15 % in the area of ecologization)
• Max. assessment basis EUR 1 million per fiscal year (pro rata for short fiscal years)
• For depreciable fixed assets with a useful life of at least 4 years
• Excluded: Assets that are attributable to foreign permanent establishments, that are used for the investment-related profit allowance, that are subject to a special form of depreciation (§ 8 EStG) (except electric cars), non-capitalized low-value or used assets as well as certain intangible assets and assets related to fossil energy sources
• Subsequent taxation in case of early retirement (holding period: 4 years)
• For assets acquired/produced after 31.12.2022

Extension of the decoupling of the UGB rule for the use of the declining balance deduction for wear and tear for assets acquired or manufactured by 31.12.2022.

Increase in limit for low-value economic goods

• From EUR 800 to EUR 1,000
• For fiscal years beginning after 31.12.2022

Taxation of income from cryptocurrencies

• Current income: charges for the transfer of cryptocurrencies and the acquisition through mining
• Income from realized appreciation: disposals as well as the exchange for other assets or services, but not the exchange for another cryptocurrency (proceeds less acquisition costs)
• Fictitious acquisition costs of EUR 0 in the case of acquisition through staking or hard fork, for airdrops and bounties
• Special tax rate of 27.5%.
• As of 1.3.2022 (possibility to apply for taxable realizations between 1.1.2022 and 28.2.2022)
• With regard to income from realized appreciation for cryptocurrencies acquired after 28.2.2021 (in case of doubt, this will be assumed)
• Obligation to withhold the capital gains tax for domestic credit institutions or financial service providers for capital gains after 31.12.2023 (before a voluntary withhold of capital gains tax is possible)

Reduction of income tax rate

• Reduction of the 2nd tax bracket from 35% to 30% as of 1.7.2022 => for 2022 therefore 32.5%
• Reduction of the 3rd tax bracket from 42 % to 40 % as of 1.7.2023 => therefore 41 % for 2023

Increased transportation deduction and increased pensioner deduction for low incomes

New special expenditure item for thermal renovation and replacement of heating systems

• In case of payment of a federal subsidy (3rd section of the Environmental Promotion Act)
• Successful data transfer
• Lump sum of EUR 800 (thermal-energetic renovation of buildings) or EUR 400 (replacement of fossil heating system with climate-friendly one)
• From the year of payment of the subsidy and as a rule in the following 4 calendar years
  • Expenditures less subsidies from public funds exceed EUR 4,000 (thermal-energetic renovation of buildings) or EUR 2,000 (replacement of fossil fuels by climate-friendly heating systems)

Increase in family bonus plus and additional child allowance

Family bonus plus for children

• up to 18 years of age increased from EUR 125 per month to EUR 166.68 - from 2023 therefore approx. EUR 2,000 p.a.
• from the age of 18, the new monthly amount is 54.18 euros - from 2023 then approx. EUR 650 p.a.
• Additional child allowance up to EUR 350 (year 2022) or EUR 450 (from 2023) per child
• From 1.7.2022

Reduction of corporate income tax or interim tax for private foundations

• To 24 % for the calendar year 2023
• To 23 % as of calendar year 2024

End of the preferential sales tax rate of 5% as of 1.1.2022

Extension of margin taxation on travel services also to services provided to entrepreneurs

Shortening of the input tax adjustment period in the case of installment plan

• To 10 years
• Accordingly, shortening of the retention period to 12 years

For subsequent transfers to residential property as of 1.4.2022