Law & Tax
Here you will find various answers to labor and tax law questions
Film production is a free trade that must be registered with Austrian trade authorities. Based on the practical implementation of trade ordinances by trade authorities we can assume that production work lasting three days or less is not subject to trade ordinances.
Production companies with headquarters in an EEA country may carry out their production activities in Austria due to the free movement of services as long as they are entitled to do so in the country of their registered office.
Trade activities and the (from a commercial point of view) resulting Austrian subsidiary automatically entail a membership in the Association of the Audiovisual and Film Industry, the Austrian film producers guild. Such membership makes all employee contracts signed by the member company subject to the Collective Bargaining Agreement (CBA). In Austria, film industry employees are covered either by the CBA for Filmmakers (German) or the CBA for Non-Filmmakers (German; for all employees not included in the CBA for Filmmakers).
Collective Bargaining Agreement for Filmmakers
The CBA is enforced in Austria and abroad for all contracts between audio-visual and film production companies (members of the Association of the Audiovisual and Film Industry) and their employees (regardless of their nationality). The CBA covers working times as well as salary and social welfare provisions.
Collective Bargaining Agreement for Filmmakers (German)
A typical work week has 40 hours between Monday and Friday. A different collective bargaining agreement or individual agreements, if the company has no union representative, may be drawn up. A normal work day consists of eight hours between 6:00 a.m. and 10:00 p.m., which may be extended to nine hours per day. The daily rest period is 11 hours.
In accordance with Art.7, project-related (time-limited) work contracts may allow for a blanket arrangement of up to 60 hours per week. Such working time includes 40 hours per week plus up to two hours of overtime (Monday to Friday) and up to 10 hours on Saturdays (between 7:00 a.m. and 8:00 p.m.).
Natural persons whose domestic or habitual residence is in Austria are subject to unlimited income tax liability.
It is unlimited in the sense that they are basically subject to income tax on all their worldwide income and gains. Moreover, natural persons without domestic or habitual residence in Austria may have to pay taxes on certain income earned in Austria.
Double taxation agreements
Double taxation agreements (or DTA) are in place to avoid dual taxation and regulate the distribution of tax income between member countries depending on the income source. A DTA member country may use their taxation rights in accordance with their national laws. Currently, Austria has DTAs with over 90 countries.
Most DTAs allocate taxation rights to the country of residence of the self-employed person, unless the self-employed person operates from a permanent establishment in Austria (i.e. office or studio). A permanent establishment is defined as a concrete and permanent center for work activities. In such cases, only income from work at the permanent establishment is taxed in Austria. Nevertheless, tax liabilities for performing artists are regulated separately in many DTAs, even when a permanent establishment exists; under certain conditions, Austria receives the right of taxation.
Income from employed work in Austria is generally also taxed in Austria. Exceptions in DTAs are typically made for individuals residing in Austria for less than 183 days within a (usually calendar) year, for employers without residence in Austria, and in cases when payments are not distributed from a workplace or permanent establishment in Austria.
In general, tax rates for taxable income from persons with limited tax liabilities are the same as for persons with unlimited tax liabilities in Austria.
Depending on the method of avoiding double-taxation in the applicable DTA,
a) income taxed in Austria is tax-exempt in the country of residence; the tax-exempt income is usually included and increases the overall income progressively (tax exemption, generally with progression provision), or
b) taxes paid in Austria are credited in the country of residence (tax credit).
In case of point b), the country of residence taxes the entire world income and then deducts taxes paid in Austria from the total tax debt.
Special regulations for performance artists
In accordance with applicable DTAs, performance artists are exclusively individuals who directly (on stage) or indirectly (in film or on television) appear in public. This provision applies inter alia to actors, musicians, stunt performers, artists, supporting actors, models, and similar individuals. Inclusion in this group is based on the entertainment character, not the artistic quality of the work. In the context of taxation, it is irrelevant whether the work is performed in an employed or self-employed situation. This provision does not apply to manufacturing artists and crew members, such as the director, camera people, set designers, choreographers, sound engineers, etc.
In accordance with the basic rules of applicable DTAs, performing artists are taxed in Austria for work and services performed and compensated in Austria. This provision also applies when the work or services are not paid directly to the artist but to a third party (i.e.: marketing agency; a process also known as “Kuenstlerdurchgriff” in Austria). It should be noted, however, that certain DTAs include regulations with regard to performing artists which deviate from the general tax code, e.g. the DTA with the United States stipulates that Austria only has the right to tax an annual gross income exceeding USD 20,000, including reimbursed or incurred expenses.
In general, a 20% flat tax is withheld on the gross income (including all reimbursed expenses and benefits in kind but excluding any potential sales tax) at the point of payment (employer/client), independent of the artist’s employment status (employed/self-employed).
Expenditures directly related to the income may be deducted from the gross income at the time of tax deduction, if the income recipient of limited tax liability resides in an EEA country, and if the expenses were presented to the debtor in writing. In such a case, tax rates of 35% for all natural persons and of 25% for all others apply.
The debtor may be exempt from mandatory tax deduction under certain conditions, if the debtor does not directly pay the artist of limited tax liability but instead an artist agency (i.e. AKM, Austro-Mechana, Literar-Mechana); the agency shall perform the tax deduction when transferring the agreed amount to the creditor.
Travel & Residence
Nationals of the European Economic Area (EEA) and Switzerland do not require a visa for entering the Republic of Austria. All other nationals require a visa in order to enter the Schengen Area (Austria is a Schengen State).
For stays of up to 90 days per 180 days these individuals require a Schengen visa, given that they do not take up employment. Visa D are national visa, which entitle the holder of the visa to stay for a period from 90 days up to six months in Austria. It can be issued for single or multiple entry. Nevertheless, a visa does not entitle you to take up employment.
Schengen visa have to be applied for at the relevant Austrian Representation (embassy, consulate), which is competent for the residency of the applicant.
Due to bi- and multilateral agreements, nationals of certain states (e.g. United States, Australia, Canada, Japan) are visa-exempt, if they stay in Austria for a maximum period of 90 days and do not take up employment. Find a list of visa-exempt states and further information at the website of the Austrian Federal Ministry for European and International Affairs.
Nationals of the European Economic Area (EEA) and Switzerland do not require a residence permit for staying in the Republic of Austria for a period of three months. This right is independent from any economic activity in Austria.
Nationals of the EEA and Switzerland may reside in Austria for more than three months by applying for a registration certificate [Anmeldebescheinigung] at the settlement authority (locally competent provincial governor (Landeshauptmann) or authorized district administrative authority). After a five-year period of continuous legal residence in Austria, you gain the right of permanent residence and may apply for a document certifying permanent residence [Bescheinigung des Daueraufenthalts].
Third country nationals who want to reside in Austria for longer than six months within one year require a residence permit. Residence permits are residence titles issued for temporary residence without intent to settle in Austria. In contrast, the Red-White-Red Card is a flexible system enabling the long-term immigration of qualified employees from third countries and their family members to Austria.
Residence permits usually have to be applied for in person at the relevant Austrian Representation which is competent for the residency of the applicant before entering Austria. Certain groups may also apply for a residence permit in Austria (inter alia nationals of visa-exempt states and artists). The settlement authority (locally competent provincial governor (Landeshauptmann) or authorized district administrative authority) makes the decision on residence permit applications.
EEA nationals (with the exception of Croatia) have free and unrestricted access to the Austrian labor market. They can freely move about in Austria within the context of the freedom of movement of workers and freedom of establishment. Accordingly, they are generally entitled to seek gainful employment as an employee or self-employed individual, given they are in possession of a valid travel document. Please note: transitional provisions and periods are in place with Romania and Bulgaria.
Aside from a valid residence title, third country nationals require an official permit by the competent regional office of the Austrian Public Employment Service (AMS) to take up legal employment in Austria.
Work permits have to be applied for by the prospective employer. The permit must be issued before employment commences. Moreover, the employer is obliged to report the beginning and end of any employment to AMS within three days. Illegal employment is strictly controlled by the financial police, a national anti-fraud unit of the Federal Ministry of Finance, and subject to substantial fines.
An exception provision applies to certain groups of artists for limited stays due to an artistic production or performance. This group of artists also includes filmmakers. Therefore, they may be employed without work permit for one day or four weeks within an overall artistic production to ensure an ongoing film production. Such employment shall be notified by the producer on the day of work take-up to the competent regional AMS office.
AMS may issue a conditional assurance (Sicherungsbescheinigung) to such an employer that the artist (who is required to obtain a visa) will receive a work permit after having received the respective residence permit/visa. The conditional assurance’s period of validity shall be 26 weeks at most, provided that the artist is employed for a maximum of six months. The conditional assurance for artists also applies to technical and administrative personnel.
Employers who are not EEA nationals and whose companies do not have registered offices in the EEA shall also file a conditional assurance for their non-EEA employees. In these cases, it is advised to delegate power-of-attorney to an Austrian person or company who files the applications in the Austrian company‘s name.
An employer with EEA headquarters does not require a permit to post an EEA national (except Croatia) to Austria. The foreign employer shall report such performance of work or rendering of a service at the latest one week prior to commencement of work to the Central Coordination Office at the Federal Ministry of Finance (ZKO).
An employer without EEA headquarters requires a posting permit to post a non-EEA or Croatian national to Austria to work on a project lasting no longer than six months. Applications for posting permits shall be filed by the domestic employer with AMS for a period of up to four months. A work or posting permit is not required in the context of such short-term work performance or rendering of services (for up to four months) where the domestic workforce is not employed, such as business meetings or attending trade fairs and congresses.
VAT (Sales Tax)
As a general rule in Austria, goods and services (with only a few exceptions) are subject to VAT (sales tax).
The standard tax rate amounts to 20%, the reduced rate of 10% respectively 13% applies to food, books, theatrical and cultural events, artistic activity, domestic passenger transportation and rentals for private residential use (10 %) as well as for living animals / plants, sales from the activity as artist and film screenings (13 %)
Production companies without a registered office or fixed establishment in Austria who effect no taxable transactions, generate only tax-exempt revenues, or make only supplies for which the tax liability is shifted to the recipient of the supply (reverse charge system pursuant to Art. 19 (1)) may file for a VAT refund.
In the context of a service production, the VAT is refunded via the partner company based in Austria.
The amount to be refunded must at least be EUR 400. This does not apply, if the refund period is the calendar year or the last period of a calendar year. For these refund periods, the amount to be refunded must be at least EUR 50.
The filed refund period shall include at least three consecutive months per calendar year and shall not exceed one entire calendar year. The last months of a calendar year are the only exception to this rule. In such cases, the refund period may be shorter (e.g. November and December or just December). Exclusively full calendar months are accepted for refund periods.
The application shall be filed by 30 June of the calendar year following the refund period. Therefore, the refund application for the year 2020 shall be filed by 30 June 2021 at the latest.
The following completed forms and original documents shall accompany the application to be filed at the Austrian tax office Graz-Stadt:
Questionnaire Verf 18 upon first application
Claim form U 5 (German) with company signature
Original certificate of entrepreneurial status U 70 (proof of tax identification number)
The Austrian tax office only accepts original invoices complying with provisions on issuing invoices as well as the provisions on input tax deduction. Find out more about "Deduction of Import of VAT in Specific Cases".
Employees are obliged to have social security in the context of the statutory social security system when working in Austria. Austrian social security covers health insurance, accident insurance, unemployment benefits, and public pension payments. In general, both employer and employee are mandated to pay into social security.
Payments falling below the minor employment threshold (Geringfügigkeitsgrenze) lead to limited social security liabilities. In such a case, employees are only required to have accident insurance.
If the employer has a business residence in Austria, the employer shall register the employee at the authorized health insurance office and pay the mandated social security contributions of both employer and employee. If the employer does not have a business residence in Austria but in another EEA (European Economic Area) country, the employer can form an agreement with the employee to transfer these duties and payments onto the employee.
Employers from non-EEA countries and without business residence in Austria are exempt from employee registration duties and payments of employer and employee contributions. Employers with business residence in Austria shall register their employees and pay both employer and employee contributions to social security. This provision applies only to employees and independent service providers. The contribution percentage rate depends on the form of employment.
In contrast to employees, self-employed individuals shall enroll and cancel their own social security and health insurance (with Sozialversicherung der Gewerblichen Wirtschaft) and pay their own premiums. When insurance coverage is tied to a formal prerequisite (e.g. a trade license), insurance begins on the day when the trade license is obtained and ends on the last day of the month in which the trade license is surrendered.
Nationals from EEA member states and Switzerland enjoy insurance coverage in Austria in accordance with EU Regulation 883/2004 on the coordination of social security systems. Individuals from the United States and Canada are advised to review their health insurance coverage for a work visit to Austria and may consider purchasing additional insurance coverage, if necessary. Costs of medical care while in Austria must be paid directly to the Austrian provider when services are rendered and will be partly or entirely refunded in the home country, depending on the insurance policy.
Dues for employees
SV-DGA (social security – employer contribution): 21.13%
MV (employee pension fund contribution): 1.53%
DB (employer contribution to family compensation fund): 3.9%
DZ (employer contribution surcharge): below 0.5%, varies according to federal province
Communal tax: 3% (if employer has a business residence in Austria)
Subway contribution: only for employees in Vienna, flat fee of EUR 2.00 per employee and work week started