die sterreichische Film Commission

Persons without residence or temporary domicil in Austria are only subject to limited taxation on specific income earned in Austria. This means that such persons pay taxes only on specific income earned in Austria.

Further restrictions on taxation law concerning income earned in Austria may exist if a double-taxation convention (referred to in the following as DTC) exists between Austria and the country in which the relevant person is a resident. The DTC avoids double-taxation and regulates the distribution of taxation laws between the two contract countries dependent on the type of income. The country with the right to levy taxes under the DTC may do so according to national tax laws. To date, Austria has concluded such double-taxation conventions with 58 countries.

Definition: Self-employment is an entrepreneurial activity based on a defined contract (i.e.: labor contract). Self-employed activity can only be recognized if it happens outside an employment situation. The self-employed person has to work independently, without outside directives and at his own risk.

According to most of the existing DTCs, income from self-employed work may not be taxed in Austria if the person has no place of business operation (e.g. workshop, office, etc.) in Austria. A place of business operation is a permanent center of activities. Furthermore, Austria may only tax those portions of the income earned through the place of business operation in Austria.

Income from artistic work (cf. Item 1.1.4.) is independent of the place of business operation and is reglemented differently in most of the DTCs – Austria may reserve the right to tax this income under certain conditions.

Definition: Non-self-employed work refers to an employee whose job has to be performed in a situation of personal dependency. The employee is an organizational part of the business and is obliged to follow the directives of the employer. The employee carries no entrepreneurial risk.

According to the provisions set out in most of the DTCs, non-self-employed work by persons resident abroad is taxed in the home country only, if the temporary domicil in Austria lasts fewer than 183 days during one (calendar) year and the employer is not a resident of Austria or maintains a place of business operation which pays the salaries.

According to the DTC, performance artists are exclusively defined as persons who appear directly (stage) or indirectly (film, television) in public, such as actors, musicians, stuntmen, artists, but also supporting actors and similar persons. Entertainment value is the defining factor in this context, not artistic quality. It is equally unimportant whether the work is performed in a self-employed or non-self-employed situation. Directors, cinematographers, production designers, sound engineers, etc., are not considered performance artists.

According to existing DTCs, the basic rule for artists is that services rendered and compensated in Austria are subject to taxation in Austria. This is also true if the compensation for the work of an artist is paid to a third party (i.e. talent agency or management company).

However, deviations from the rule do appear in individual DTCs. The following is only a partial list; the selection is by no means complete.

Germany: Above the basic taxation regulation for performance artists, Austria has the right to tax any kind of income generated by the artist (i.e.: licensing fees). This means that also income which was not generated by direct personal activities of the artist in Austria (i.e.: licensing fees) have to be taxed in Austria. However, Germany has the right to tax income which was produced during a stay in Austria which was subsidized by the German government or by authenticated public German institutions.

France: The income of artists generated in Austria is subject to French tax laws if the competent French revenue authority confirms that the activities in Austria are predominantly financed by public funds from France (which also includes public film subsidies). This proofs also true if a third party (i.e.: Talent agency or management company) is financed publicly.

United Kingdom: In deviation from the general rule, the income of artists working on the basis of cultural conventions or agreements or for specific, acknowledged charitable organizations is not taxed in Austria.

Switzerland: Professional artists who are predominantly subsidized by public funds do not have to pay taxes in the country of performance (Austria). Otherwise, the general regulations apply.

USA: Austria may only tax an artist’s income if it exceeds US $20,000.00 gross annually, including all expenses. Income which does not go directly to the artist but to a third person will not be taxed in Austria as long there is proof that the artist or persons close to the artist will not profit from the income of the third person (includes dividends, bonus pays, gifts, etc.).

Canada: The general rule applies; for income from which the artist does not benefit directly, the arrangement is identical to the one provided for in the DTC with the USA.

Italy, Czech Republic, Slovakia, Finland, South Korea, Croatia, Malta, Russia, Singapore, South Africa, Tunisia, Belarus, Cyprus, etc.: Basic regulations apply (income is taxed in the country where the work was performed).

Belgium, Denmark, Greece, Ireland, Israel, Luxembourg, Portugal, Sweden, Spain, etc.: There is no special reglementation for artists besides the general tax law.

India, Japan, Pakistan, Hungary, etc.: The artist’s agreement does not exist with these countries. Therefore, taxation follows general regulations (1.1.2., 1.1.3.).

As mentioned in paragraph 1.1.1., persons without residence or temporary domicil in Austria, will only be taxed on specific income (see paragraphs 1.1.1. to 1.1.4.). Regardless of possible exemptions (as described in the next paragraph), the applicable tax rates for taxable income in Austria are identical to those for individuals with unlimited tax obligation (see paragraph 1.2.).

Depending on the exemption procedure set out in the DTC,

a) income taxed in Austria is exempt from taxation in the homeland, whereby such income typically affects taxation of other income by increasing progression, or
b) the tax paid is accredited to the tax to be paid in the home country.

Accreditation as described in (b) means that, although the home country taxes a person’s world income, the tax paid in Austria is deducted from the entire calculated amount of tax owed.

Special regulation for artists
Austrian income tax law provides for a special form of taxation on income of foreign artists and participants in art performances or productions. An income tax rate of 20% on the total gross amount (income including all expenses and non-monetary compensation but sales tax can be deducted) will be withheld as a tax deduction at the source of payment (contractor), whether the artist is self-employed or non-self-employed.

Assessment
The income tax liability of the person with limited tax obligation will be satisfied by the withheld tax deduction and there is no need to file an income tax return, unless requested by the revenue office. An income tax assessment is, however, recommended if the assessed tax is projected to be lower than the 20% tax deduction.

Persons with limited tax obligation and those who did not take a 20% tax deduction will be taxed in Austria based upon their income tax return filed with the responsible revenue office.
Filing a tax return is mandatory when:

a) the responsible revenue office demands a tax return or
b) the basis of the income taxable as described above exceeds € 3,630.00 per calendar year without any tax deductions. When calculating the income of self-employed work, operational expenses directly related to the income, can be deducted.

A tax assessment could also be advantageous for income from non-self-employed work, from which a wage tax is deducted directly from the salary, if the employment did not last throughout the entire tax year.