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Tax Declaration in Austria: What Self-Employed People Usually Feel Confused About

Written by Marta Srebrakowska, reviewed by tax advisor Pascal Schraml



Filing your tax declaration in Austria as a self-employed person can feel intimidating, especially if it is your first time.

You log into FinanzOnline, open the tax forms, and you come across terms like Einkommensteuererklärung, Einnahmen-Ausgaben-Rechnung, and Pauschalierung. And the real problem is usually not that one single thing is impossible to understand - it is more that many small questions appear at once.


To give you a clearer starting point before you file, I went through our previous tax workshop with tax expert Pascal Schraml, and in this article I will cover the common confusions:


  • Do I even have to file?

  • Which form should I use?

  • Do I choose actual expenses or the flat rate?

  • Where do I enter my SVS payments?

  • What if I was employed and self-employed in the same year?

  • What if my clients are abroad?

  • Can I deduct my laptop, courses, public transport ticket, home office, or coworking space?

  • What should I prepare before doing my tax declaration?

  • When can I try filing by myself?

  • When should I book a tax advisor instead?



1. Do I need to file a tax declaration?

This is usually the first big question.

If you are self-employed in Austria, whether you must file an income tax return depends on your situation, your profit, and whether the tax office asks you to submit one.


A very important practical rule is this:

If the tax office asks you to file a tax return, do not ignore it.


Even if you made little money, made no profit, or if you think “there is nothing to report.”


Once you register self-employment, the tax office may expect a tax return from you. If you do not file and do not respond, the tax office can estimate your income. That estimate can create a tax bill, and it may also affect your social security calculations with SVS (Sozialversicherung der Selbständigen).


There is also an important rule for people who are both employed and self-employed. If you already earn above the income tax threshold through employment and earn more than €730 per year from self-employment or other non-payroll-taxed income, you usually need to file. 


The official electronic filing process runs through FinanzOnline, Austria’s online tax portal.

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2. Income is not the same as profit

A very common misunderstanding is mixing up income and profit.

Your income (Einnahmen) is what your clients pay you.

Your profit (Gewinn) is what remains after deducting business expenses.


For example:

Income: €20,000

Business expenses: €5,000

Profit: €15,000


In most cases, income tax is calculated based on profit, not simply on the total amount that arrived in your bank account.


This is why it is so important to keep at least a simple spreadsheet during the year. If you run a small business, you do not need an overly complicated system, but you should be able to show how you calculated the numbers you entered into FinanzOnline.


If the tax office asks, “How did you arrive at this amount?”, you should have a clear overview behind your declaration.




3. Actual expenses or flat rate?

In many cases, you can choose between two ways of calculating your business expenses:


Actual expenses (tatsächliche Betriebsausgaben)

This means you calculate your real business expenses.


These can include, depending on your business:

  • SVS payments

  • laptop and equipment

  • software subscriptions

  • phone and internet

  • courses and training

  • business travel

  • coworking space

  • professional services

  • business-related public transport

  • other business-related expenses

This method can make sense if your real expenses are quite high.


Flat-rate expenses (Pauschalierung)

Instead of listing every actual expense, you use a flat percentage of your income as expenses.

For many service-based businesses, the small business flat-rate method (Kleinunternehmerpauschalierung) can be especially useful. In our previous tax workshop, Pascal explained that many service providers under the relevant revenue threshold can use a 20% flat rate. For other types of businesses, a different rate may apply.


The practical advantage is simple: you do not need to prove every small expense included in the flat rate.


And there is another important benefit. Some expenses can still be added on top of the flat rate, especially:

The BMF explains that under the small business flat-rate method, the main information required is much simpler than in a full income and expense statement, and that certain values such as the flat-rate operating expenses can be calculated automatically in the background.




4. The flat rate sounds easy, but it is not always better

The question is:

Which method gives you the lower taxable profit?

If your real expenses are higher than the flat-rate amount, actual expenses may be better.

If your real expenses are lower, the flat rate may be better.


Example:

You made €30,000 in income. A 20% flat rate gives you €6,000 in flat-rate expenses.

If your real expenses were only €2,000, the flat rate may be better. If your real expenses were €10,000, actual expenses may be better.


This is especially important for people in their first year of self-employment. If you had low income but high setup costs, actual expenses may be more useful.


Also, switching between methods can have consequences for future years. These WKO pages explain that switching away from Kleinunternehmerpauschalierung can block you from using it again for 3 business years, while switching away from Basispauschalierung can block you from returning to it for 5 business years, so the choice between flat rate and actual expenses can affect more than just the current tax year.

So this decision is not only about the current tax year.




5. SVS is often your most important expense

For many self-employed people, SVS (Sozialversicherung der Selbständigen) is one of the biggest expenses, and it is also one of the most important ones to understand.

SVS contributions are generally deductible in the year they are paid. This means voluntary SVS prepayments can sometimes be useful, especially if you had a strong income year and want to reduce the risk of painful back payments later.


This matters because SVS often works with delayed calculations. You may receive a large back payment later, based on a previous year’s income. That can become stressful if your income has dropped in the meantime.


Pascal’s practical advice in the workshop was: do not treat SVS as an afterthought. For many self-employed people, active SVS planning is just as important as the tax declaration itself.




6. Home office rules are confusing because there are different concepts


Depending on your situation, the amount may be either:

  • €300 per year, or

  • €1,200 per year

The larger amount may apply if you are only self-employed or if your employment income is below the relevant threshold.


The important point:

The work-from-home allowance can be used on top of the flat rate.


That is one reason why the flat-rate method can be so useful for many service providers.

But be careful. You cannot always combine everything freely. For example, if you rent a coworking space and want to deduct actual workspace costs, this may affect whether you can also use the work-from-home allowance. Your exact situation matters.




7. Where do I put expenses in FinanzOnline?


You may know that you paid SVS, bought a laptop, paid for courses, or used public transport for business. But then you open FinanzOnline and ask: where does this actually go?


In the workshop, Pascal walked through the different fields and explained that expenses need to be entered into the right categories.


The exact fields depend on which form you use and whether you use actual expenses or a flat-rate method.

This is why it is much easier to prepare your income and expenses before opening FinanzOnline. If you start inside the form without knowing your numbers, the process feels much more chaotic. To find exact field for various expenses, I recommned you to watch the recorsings from the  Tax Declaration DIY Survival Kit.




8. Which form should I use?


Another common confusion is the form itself.

You may see forms like:

  • E1 - income tax return

  • E1a - attachment for business/self-employed income

  • E1a-K - shorter form for small businesses


People with a business licence usually report income under business income (Gewerbebetrieb).

People in certain independent professions or new self-employment may report under self-employed income (selbständige Arbeit).


For many smaller and simpler cases, the shorter form may be enough. In the webinar, Pascal explained that if you want to use the small business flat-rate method, you usually work with the shorter small-business form.


The longer form has many more fields and may be needed for more complex cases or if certain expense categories are not available in the shorter form.




9. What if I am employed and self-employed?

If you had employment income and self-employed income in the same year, both need to be considered in your tax declaration.


Your employer usually reports your salary data to the tax office. In FinanzOnline, you indicate how many employers or payroll-paying institutions you had, and then you enter your self-employed income separately.


This is also why some people who were employed for only part of the year may receive tax back. Employment tax is often calculated as if you earned the same monthly amount for the whole year. If you only worked part of the year, the final annual calculation may be more favourable.





10. What if my clients are abroad?

If you receive payments in another currency, for example USD or GBP, you need to convert the income into euros for your Austrian tax declaration.


A practical approach from the workshop:

If the money is converted into euros by your bank or payment provider soon after payment, you can usually use the euro value shown there.


If you keep the money in a foreign currency account and convert irregularly, you may need to use official annual exchange rates.


Foreign clients can also create VAT questions. For example, working with EU business clients can create reporting obligations even if you do not charge VAT. This is a separate topic from income tax and should not be ignored.




11. Income tax and VAT are not the same

Your income tax return (Einkommensteuererklärung) is about your profit and personal/business income.

Your VAT return (Umsatzsteuererklärung) is about VAT.


Some self-employed people only need to deal with income tax. Others may also need to file VAT returns, VAT pre-returns, or other reports, especially if they work with EU clients, request input VAT, or are no longer under the small business VAT exemption.


If FinanzOnline shows monthly or quarterly VAT reminders, this is not the same as your annual income tax return. Do not ignore it, but also do not confuse the two topics. FinanzOnline’s help pages also refer to VAT-related declarations such as Umsatzsteuererklärung (U1), Umsatzsteuervoranmeldung (U30) and Zusammenfassende Meldung (U13).




12. Children can make a big tax difference

If you have children, family-related tax benefits can be very important.

One of the biggest ones is the Family Bonus Plus (Familienbonus Plus). It can directly reduce your tax bill if you are eligible and actually pay income tax.


There are also other child-related tax credits, especially for people with low income or single parents.

This is an area worth checking carefully. Missing a child-related tax benefit can have a much bigger effect than many small expense optimisations. The BMF provides official information on the Family Bonus Plus and related family tax benefits.




13. What should you prepare before doing your tax declaration?

Before opening FinanzOnline, prepare:

  • total income for the year

  • total expenses by category

  • SVS payments

  • annual public transport ticket invoice, if you want to use it

  • home office or workspace situation

  • foreign income and exchange values, if relevant

  • employment income situation, if you were also employed

  • child/family details, if relevant

  • invoices or proof for business expenses

  • your decision: actual expenses or flat rate


You do not need a perfect accounting system. But you do need clear numbers and a way to explain them.




14. When can you try filing yourself?

Trying to file yourself can make sense if your case is relatively simple.


For example, the Tax Declaration DIY Survival Kit may be a good fit if:

  • you are self-employed in Austria with a straightforward setup

  • you are not dealing with complex international structures

  • you have only one main self-employed activity

  • you are not in a complicated VAT situation

  • you have your income and expenses organised

  • you want to understand the process before deciding whether you need a tax advisor


The kit is designed to help you understand the logic behind the tax declaration, prepare your numbers, and follow the filing process more confidently in FinanzOnline. It is especially useful if you want to learn what goes where, instead of blindly clicking through forms.


SEA members with access to SEA resources can watch the Tax Declaration DIY Survival Kit recording for free at any time. Non-members can get access here.




15. When should you book a tax advisor instead?

You should consider booking a tax advisor if:

  • you have VAT obligations or EU clients

  • you work with clients outside Austria and are unsure about tax treatment

  • you have several business activities

  • you had a very high-income year or big income changes

  • you expect large SVS back payments

  • you have family-related tax questions

  • you are unsure whether to choose actual expenses or a flat-rate method

  • you received letters from the tax office and do not understand them

  • you simply want someone to file it correctly for you


Pascal Schraml and his team at PSTax specialise in tax support for self-employed people in Austria. Their services include income tax returns, SVS planning, tax office communication, VAT support where needed, and ongoing email support depending on the package. You can learn more about PSTax here.



The Austrian tax declaration can feel confusing, but most of the confusion comes from not knowing what belongs where.


The most important things are:

Understand whether you need to file.

Know the difference between income and profit.

Decide whether actual expenses or a flat rate makes more sense.Do not forget SVS.

Do not confuse income tax and VAT.

Prepare your numbers before opening FinanzOnline.

Use family-related tax benefits if they apply.

Ask a tax advisor if your situation is complex.


You do not need to understand every possible Austrian tax rule. You need to understand the rules that apply to your situation.


And if your case is simple enough, the Tax Declaration DIY Survival Kit can help you try it yourself with more confidence. If your case is more complex, or if you want someone to take responsibility for the filing, working with a tax advisor like Pascal from PSTax may save you a lot of stress. 



Important note: 

This article is intended as a practical starting point, not as individual tax advice. The information is based on general rules and examples discussed in our tax workshop, but your situation may be different depending on your income, business activity, VAT status, employment situation, family situation, country of clients, and previous tax filings.

Tax thresholds, forms, flat-rate options and SVS rules may change over time. Before filing, always check the current information from official sources such as the BMF, FinanzOnline, SVS or WKO, or speak with a qualified tax advisor if you are unsure. SEA does not take responsibility for decisions made based only on this article.



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