The framework conditions for Austria’s agriculture are getting more difficult year by year. Farmers are the first ones to be concerned by climate change; moreover instable international markets cause, again and again, situations, which are threatening their existence. All in all the incomes from agriculture and forestry decreased by 10 percent in the year 2018. This development is to be counteracted speedily and effectively.
Now one thing is for sure: Sustainable relief measures for Austria’s farmers rank among the first big measures, which will be realised by the new Austrian government. Step by step, a package comprising in total up to 120 million Euros is implemented.
“We will keep what we have promised and we will relieve our agriculture feasibly. An important part of the package is, for example, the income smoothing over a period of three years. In this way fluctuations in yield can be better equalized in terms of taxation. The past few years have shown how important rapidly effective measures are”, emphasized Federal Minister Köstinger.
The most important steps at a glance
- Increase of the accounting limits for mandatory accounting to 700,000 Euros
- Income smoothing over a period of 3 years
- Reduction of the notional annuity to 10%
- Adaptation of the minimum contribution basis for health insurance to the ASVG (General Law on Social Insurance) level
- Increase in the pension contribution basis for full-time employees up to the age of 27
Increase of the lower revenue limit for holdings required to keep accounts.
The turnover-based accounting limit is raised to the general turnover limit (for all enterprises) from 550 000 to 700,000 (before only agriculture at 550,000).
Introduction of a risk compensation measure in taxation
Agricultural holdings are becoming increasingly dependent on weather conditions and risks. Drought, hot spells, damage caused by inclement weather, etc., can lead to serious crop and production losses. That being the case, taxes on a farmer's income will no longer be assessed on an annual basis, but for a cumulative period of several years (income smoothing over 3 years). Income tax payable by holdings that have opted for partial flat-rate tax assessment, by holdings using the cash method of accounting, and/or by holdings obliged to keep accounts is to be calculated cumulatively for a period of several years. This measure will bring relief to the amount of 5 to 10 million Euros.
Reduction of the integration percentage from 13 % to 10 % in case of the notional life annuity in retirement
If an agricultural or forestry holding is transferred, sold, leased out or ceded for management in any other way, not only the income actually earned (life annuity in retirement), selling price, lease, etc.) will be taken into account when calculating the compensatory allowance, but also a lump-sum, which is known as notional annuity. In this respect, relief to the amount of about 9 million Euros is expected.
Adaptation of the minimum contribution base for health insurance
Adaptation of the minimum contribution base for health insurance to the generally applicable level for ensured persons (employed and self-employed). A total amount of € 8.2 million is earmarked for this purpose.
Increase in THE pension contribution basis for full-time employed children up to the age of 27.
Our system uses the lifetime income as an assessment basis. Every working year is recorded. Lower contribution bases result in lower pensions. Due to the raising, there is a higher incentive to take over the farm and thus an effective approach to counteract the structural change. In this way, relief of about € 5 million can be achieved.