Austria consistently ranks high in terms of GDP per capita, due to its highly industrialized economy, and well-developed social market economy. It is also a member of the EU. Thousands of people choose to migrate to Austria and start their own businesses as self-employed. This article is meant to help you do it.
Disclaimer: Be aware that this article is not a substitute for legal advice. Please always check official websites or seek legal advice before you take action.
What does “self-employment” mean in Austria?
In Austria, there is not one general category of self-employment, in fact, it’s rather complex.
According to social insurance laws, there are several categories and therefore different costs, rules, and laws that apply to each of them. In Austria, you can be self-employed as:
- new self-employed (Neue Selbständige)
- liberal professional (Freiberufler)
- a self-employed with a “free” or “regulated” business licence (Freie/ Reglementierte Gewerbe)
- an independent contractor (Freie Dienstnehmer)
In this article, you will find all the information you need for starting a new self-employment- Neue Selbständige.
New self-employment- Neue Selbständige
New self-employment is probably the least common type. New self-employed are those working independently who don’t need a business licence registration for their professional activity. In other words, trade regulations do not apply to new self-employed.
This also means that new self-employed are not members of the Chamber of Commerce (WKO) and no membership fee applies - new self-employed have no advocacy group to whom they can turn. They are professionals who are registered at the Tax Office (Finanzamt) and are subject to income tax, so they have to file an income tax return every year.
They pay insurance contributions to the SVS, but since in their case, the insurance costs depend on their gross income, they might or might not have to pay contributions to the social security institution. If they fall under a specific amount of gross income, their insurance contributions are voluntary - they can opt-in for health, accident, and pension insurance. The possibility of exclusion from insurance costs is a “trademark” of this type of self-employment and probably a very attractive factor for those who want to start working on their own.
Besides all that, new self-employed can issue invoices and register for VAT as well, although this is also not obligatory under a gross income of € 35,000/year, as businesses with this amount of annual revenue fall under the “small business regulation” category. There is also a possibility of cooperating with other self-employed.
Examples of new self-employed in Austria are: artists, writers, journalists, lecturers, self-employed nurses, midwives, scientists, self-employed psychologists, psycho- and physiotherapists. Other characteristics and groups of new self-employed are:
- self-employed who mostly use their own operating resources
- persons with work contracts who are not members of the Chamber of Commerce (a service has been agreed for work contracts)
- limited working partners
- personally liable partners of partnerships
- managing partners of a GmbH (a limited liability company) if they are not insured as employees.
Registration of the new self-employed in Austria
You officially become new self-employed the moment you start conducting a business that falls under the category of new self-employment. Registration works as a notification to all the relevant authorities that you started your activity. It’s your duty to register and there are certain deadlines you must meet as well as penalties for missing them. The deadline for registration is 4 weeks from starting the professional activity. It is recommended to do it earlier, but it’s best to do so right away, because the process sometimes requires waiting for some activation letters (e.g., Finanzonline account, mobile phone signature). Besides that, you should remember that registering and clarifying your situation with the relevant authorities doesn’t necessarily mean that you will have any insurance or tax costs.
Registering with the Austrian authorities: Tax office
Note that there are more than one way to register your business, but we find this one the easiest and fastest. Follow these steps and you’ll get registered in no time.
First, open Finanz Online, the official portal of the Austrian Tax Office. Fill all the required information and you will receive the access data (your Login, PIN, and password) by mail in about ten weekdays. Once you obtain all the information and are ready to log in, you can request your tax number via the Finanz Online platform as well. If you already have a tax number, you should go to the category More services (“Weitere Services”) and choose Explanation of change (“Erklärungswechsel“ - this form applies only if you earn income from self-employment). When filling out the following form you want to mostly pay attention to these fields: estimated annual turnover in the following year, estimated profit in the opening year, estimated profit in the following year, and make sure that all the other personal data you provided is correct. If you don’t have a tax number in the first place (and if you have never filed a tax declaration in Austria before), then you need to request the tax number by clicking on More services (“Weitere Services”) and Tax number request (“Anforderung Steuernummer”). If you have filed a voluntary tax return before (“Freiwillige Arbeitnehmerveranlagung”), you already have a tax number and the number itself will be the same. Yet, it will be opened up for a (statutory) income tax return and possibly also for a VAT return, depending on the details given in the questionnaire. If you do not hear back from Finanzonline within 5-10 business days, it is recommended to call your tax office and ask if they need more information.
Mobile phone signature in Austria
When you have your mobile phone signature activated everything becomes easier and faster, like for example, signing official documents. With the signature, you can also gain access to your SVS Online account and easily register at USP Portal (the Austrian portal for entrepreneurs). If you already have access to your Finanz Online account, applying for a mobile phone signature is very easy. You just have to log in to your Finanz Online and on the right side you will see “Aktivierung Handy-Signatur”. Within a few clicks, you will apply for the activation and all you have to do is to wait for the activation letter to arrive at your address.
Registering at the SVS
You can proceed with the registration at SVS once you get your mobile phone signature. Here you can find the form. While filling out this form, you mostly want to pay attention to the estimated profit in the upcoming year field, because this will be related to your costs (whether your profit is going to be lower or higher than € 5.527,92/year - if your profit is below € 5.527,92/year there is a possibility of opting in for health and accident insurance). Once you’re registered, it’s a good idea to open your SVS Online Account where you have access to your bills, and all the information related to your contributions.
USP Portal is a so-called collection portal that is planned to become a central platform for public administration in Austria. The platform can be used by all self-employed for filing tax returns, receiving official documents and news (like, for example, news on your SVS contributions), viewing e-bills, submitting funding applications, filling out different e-forms, and more. As of 1st January 2020, registration at the portal is required from some businesses so it’s a good idea to make a phone call with the USP Portal and discuss your case. To register you need a mobile phone signature and Finanz Online account. Here is the link to USP Portal.
Paying taxes as self-employed in Autria
In cases where the income comes only from self-employment, submission of tax declaration is necessary if you earn more than € 11,000/year. However, there are certain circumstances when the tax office can request a tax declaration nevertheless. You can also check in your FinanzOnline account if, and which, tax declarations need to be submitted after the end of the year. Submission deadlines: By the end of June - online (Finanzonline); in 2020, this deadline is extended to the end of August for tax declarations for the year 2019.
This is how to submit a tax declaration:
- Via Finanzonline - log into your Finanzonline account then chose category “Eingaben” on the top and then “Erklärungen”
- Trough accounting software in xml format (some softwares automatically direct the declarations to Finanzonline) such as BMD/NTCS or Prosaldo
For more information about taxes, please check this link.
Benefits of using Deel
Relying on Deel to manage the contractors you decide to hire will help you get your “self-employed” off on the right foot. Our experienced teams work towards providing you the most streamlined contractor experience. With Deel, you can:
- Have a centralized platform that takes care of all the documentation, such as contracts, invoices, and compliance documents.
- Manage payments in different currencies and withdraw with a payment method of your choice (SEPA, PayPal, Payoneer, or bank transfer).
- Get 24/7 access to customer support and a team of experts.