Dear clients,
As in previous years we would like to remind you of the possibility of the profit allowance for 2021.
Profit allowance
Self-employed persons can reduce their taxable profit with the automatically granted "basic profit allowance". The basic profit allowance applies for a taxable profit up to Euro 30.000. Furthermore (= for a profit of more than Euro 30.000) additional income tax can be saved by the "investment-related profit allowance".
Up to a profit of Euro 30.000 exists the “basic profit allowance”
Up to a profit of Euro 30.000 the basic profit allowance will be considered automatically and without any further condition. The amount of the basic profit allowance is 13 % of the profit or Euro 3.900 maximum.
For a profit of more than Euro 30.000 exists the “investment-related profit allowance”
If the anticipated taxable profit for 2021 exceeds the amount of EUR 30.000, investments must be made in certain assets in order to benefit from the investment-related profit allowance.
Schema of the profit allowance
- 13 percent up to a profit of Euro 175.000
- 7 percent for the profit share between Euro 175.000 and 350.000
- 4.5 percent for the profit share between Euro 350.000 and 580.000
Possible investments for the investment-related profit allowance
Investments can be done into fixed assets, e.g. a computer which will be used for at least 4 years in the company. Unfortunately cars cannot be considered for the investment-related profit allowance.
Furthermore, it is possible to invest in certain securities, e. g. federal bonds, bank bonds, corporate bonds, certain investment and real estate funds and guarantee certificates as well as “Wohnbankanleihen”.
Please contact your bank in order to find an optimal solution for you.
Is the Profit Allowance applicable for me?
We are happy to help you answering all questions of whether and to what extent you should use the profit allowance. Please note that the investment e.g. securities must be acquired before the end of 2021!
Best regards
Manfred Gross
Vienna, November 2021
