ECJ ruling on the indexation of tax deductions
 

FAQ

Which countries of residence of the children are affected? Collapse content

Countries with a higher index factor than Austria (amounts indexed upwards):

Belgium, Denmark, Finland, France, Ireland, Iceland, Luxembourg, Netherlands, Norway, Sweden, Switzerland, United Kingdom

Countries with lower index factor than Austria (downward indexed amounts):

Bulgaria, Germany, Estonia, Greece, Italy, Croatia, Latvia, Lithuania, Malta, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Czech Republic, Hungary, Cyprus

Index factor identical to Austria (same amount as Austria):

Liechtenstein

When was indexation lifted and which benefits are affected? Collapse content

On 16 June 2022, the ECJ ruled that the indexation of the single-earner deduction, the single-parent deduction, the maintenance deduction, the family bonus plus and the additional child allowance, as well as the child deduction and the family allowance, is not compatible with EU law.
For this reason, the indexation provisions are no longer applicable.

I am exempt from the indexing regulations in a period from 1 January 2019.
Do I have to submit an application immediately or contact the Austrian tax office? Collapse content</ span>

We ask you to refrain from contacting the Austrian tax office and other Austrian authorities at the moment and not to submit any applications.

If you have already received an income tax assessment from the Austrian tax authorities for the assessment year 2019, 2020 and/or 2021, in which insufficient tax deductions have been taken into account due to the "downward" indexation, you will automatically receive any additional payments.

What measures are being taken by the federal government? Collapse content

With Federal Law Gazette I Nr. 138/2022[CM1]  an amendment to the Family Burdens Equalisation Act and the Income Tax Act was passed, which cleans up the indexation provisions and creates a legal basis for back payments.

Does the “de-indexation” apply to all children? Collapse content

Yes, for all children living in the EU/EEA/Switzerland for whom an entitlement exists/existed in an entitlement period beginning 1 January 2019.

Is the child tax credit also affected by the indexation and the ECJ ruling? Collapse content

Yes, the child tax credit was also indexed. The indexation of the tax credit for children was also classified by the ECJ as incompatible with EU law. Any additional payments are made together with the family allowance.

I have already received an income tax assessment from the Austrian tax authorities for the assessment year 2019, 2020 and/or 2021, in which one or more of the stated deductions are indexed downwards were taken into account. Are my notifications corrected automatically? Collapse content

Yes, new notifications will be created automatically. The difference between the previously taken into account and the correct amounts will be transferred to your account or credited to your tax account after the notification has been issued.

I have already submitted the employee assessment for 2019, 2020 and/or 2021, but have not yet received an income tax assessment. Are the correct (no longer indexed) amounts taken into account when the notification is created? Collapse content

If no notification has been created yet, the correct (higher) values are already taken into account when the notification is created.

I have not yet completed my employee tax assessment for the years 2019 to 2021. Do I have to pay attention to anything special? Collapse content

If you have not yet received an income tax assessment for the past calendar year, the correct amounts (no longer indexed downwards) will already be taken into account in the employee tax assessment.

One or more of the deductions mentioned are already taken into account by my employer in the ongoing payroll accounting. Are the correct (higher) amounts automatically taken into account or do I have to submit a new application? Collapse content

From August 2022, the employer can already take the correct amounts into account in payroll accounting. For the months of 2022 for which the monthly salary has already been paid out, he has to carry out a so-called roll-up, which means that the correct values are taken into account in payroll accounting

In my case, higher amounts indexed "upwards" were taken into account. Do I have to pay back the difference compared to the amounts applicable for children in Austria? Collapse content

No, higher amounts will not be reclaimed. For months from August 2022, the non-indexed amounts provided for by law must be taken into account. Regardless of when you carry out your employee tax assessment, you are still entitled to the higher deductions for periods up to July 2022.

Where can I find general information about the tax credits? Collapse content

General information on the tax deductions (e.g. eligibility requirements, amount) can be found on these pages:

• Overview of tax deductions (in German)
• Family Bonus Plus – all information (in German)
• Questions and answers about the Family Bonus Plus (in German)
• Single earner and single parent tax credit (in German)
• Alimony tax credit (in German)
• The tax book (PDF, 2 MB) (in English)

 [CM1]Link: RIS - BGBLA_2022_I_138 - Federal Law Gazette authentic from 2004 (bka.gv.at)