Employee assessment without application ("automatic tax equalisation")

• General information
• Requirements
• Agreement of affected persons
• Revocation of assessment
• Special expenses
• Pensioners
• Further links
• Legal basis

General information

Tax equalisation (the technical term is "Employee assessment") can be requested by means of a form, in order to obtain a refund of overpaid wage tax, social security contributions ("SV repayments") or the single-earner/single-parent tax credit from the tax office.

Since 2017, under some circumstances this tax equalisation takes place automatically (known as "Employee assessment without application"). The advantage of this for taxpayers is that (subject to certain conditions) no tax return need be submitted in order to receive a tax refund. Overpayments of wage tax and social security repayments are calculated automatically by the fiscal authorities, unless the automatic execution of the application-free employee assessment has been waived. A notice of assessment is issued – without the need to apply for it – and the credit sum calculated is then transferred to the affected person’s bank account.

Employee assessment without application was introduced so that persons with low incomes or minimum pensions would always receive their tax refund. It is not only such people who benefit from automatic tax equalisation, however, but everyone who has received only income subject to wage tax to whom a tax refund is due.

Requirements

Automatic tax equalisation (Employee assessment without application) will take place in one single step only if

• No tax equalisation (no Employee assessment) for the previous year has been applied for by 30 June (i.e. no Form L 1 has been submitted).
• According to the fiscal authorities’ calculations, tax equalisation results in a tax refund and
• On the basis of available data, the tax office can assume that:
  • Only income subject to wage tax has been received
  • No special costs have been claimed (e.g. special expenses, extraordinary burdens or tax deductions such as single-earner tax credit).

At a second stage, checks are made to determine that:

• by the end of the second calendar year after the assessment period, no tax return has been submitted for the relevant assessment period; if not, then an assessment without application should always be undertaken if, on the basis of the data available, a tax refund of at least 5 Euro is due.

If the fiscal authorities believe that the taxpayer herself/himself is arranging a tax equalisation in order to claim for additional expenditure, then no automatic tax equalisation will be undertaken.

Agreement of affected persons

All taxpayers who are considered for automatic tax equalisation for the first time receive an information notice during the second half of the following year.

This will include the account details that the fiscal authorities have on record. If these details are correct, the taxpayer need do nothing further. If, however, the account details are not up to date, then the current data should be notified to the competent tax office within four weeks at the latest. This can be done either electronically via FinanzOnline or in writing. In this notification, the automatic employee assessment can also be declined if, for example, there are additional deductions that need to be included; these can be reported in a return.

Revocation of assessment

Taxpayers for whom an automatic tax equalisation is to be carried out will receive a tax assessment. If they do not agree with this assessment, for example because they wish to claim for additional deductions (e.g. income-related expenses), they can submit a tax return of their own. Then a decision will be made using the return that they have themselves submitted, and the assessment made using the "employee assessment without application" process will be revoked.

These are the options for submitting the return:

• Electronically via FinanzOnline
• In writing, by submitting the completed form L 1 to the competent tax office

The five-year deadline for submitting a tax return still applies when an automatic assessment has taken place (e.g. the application for the year 2023 can be submitted up to the end of December 2028).

Special expenses

Since 2018, certain special expenses (→ BMF)^{German text} such as donations or church contributions must be notified automatically by the relevant organisation to the fiscal authorities. This means that from assessment year 2017, such special expenses will also be included in an automatic tax equalisation. In order for this to happen, the relevant organisation (e.g. the institution receiving the benefit of the donation) must hold the relevant person’s details (forename, surname, date of birth) and there must be no prohibition on the transfer of the data. Detailed information on the topic of "Taxation of associations and deductibility of donations" can also be found at oesterreich.gv.at.

Pensioners

Pensioners who receive only a small pension and hence pay no wage tax no longer need to submit an application for the payment of the SV repayment. As part of the "employee assessment without application" process, they will receive back a proportion of their social security contributions during the second half of the following year. If the pensioner receives a tax-free compensatory allowance, this is balanced against the SV repayment.

Values per year
Maximum amount in case of entitlement to the pensioner tax credit: 300 Euro in the year 2020, 550 Euro in 2021, 1,050 Euro in 2022, 579 Euro in 2023, 637 Euro in 2024

All pensioners for whom an employee assessment without application is carried out for the first time will receive an information notice (see above, "Agreement of affected persons"). They must reply to this using only their current account number.

Employee assessment without application is subject to two conditions:

• that the person has claimed no special expenditure (such as extraordinary burdens) in the two previous years and
• that a tax refund of at least 5 Euro results from the tax calculation.

Further links

• Employee assessment without application – automatically (→ BMF)^{German text}
• Explanatory video: Employee assessment without application (→ YouTube)^{German text}
• Simpler deductions of special expenses (→ BMF)^{German text}
• Tax deductions in the case of low incomes (SV repayments) (→ BMF)^{German text}
• FinanzOnline (→ BMF)^{German text}
• The Tax Book (→ BMF)^{German text}

Legal bases

Section 41  paragraph 2 of the Einkommensteuergesetz (EStG)