Crypto Notes in the City of Music: An Overview of Austria's Cryptocurrency Tax and Regulatory Regime
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Crypto Notes in the City of Music: An Overview of Austria's Cryptocurrency Tax and Regulatory Regime
This article will review Austria's cryptocurrency tax system and latest regulatory developments.
Navigating Web3 tides with focused insightsAuthor: Fintax
1. Introduction to the Republic of Austria
The Republic of Austria, located in Central Europe as a landlocked country, operates under a parliamentary system and functions as a representative democracy composed of nine federal states. Austria joined the European Union (EU) in 1995 and is one of the founding members of the Organisation for Economic Co-operation and Development (OECD). Austria was among the earlier EU countries to reform its taxation framework concerning cryptocurrencies. This article provides an overview of Austria's cryptocurrency tax regime and recent regulatory developments.
2. Austria's Basic Tax System
2.1 Overview of Austria’s Tax System
The Federal Ministry of Finance (FMA) serves as the primary authority responsible for enforcing all fiscal laws and collecting taxes in Austria. It allocates tax revenues toward public and social services to improve residents' living standards. The Austrian tax year follows the calendar year (January 1 – December 31), and the country applies a progressive income tax system with rates ranging from 20% to 55%, which ranks relatively high within Europe.
Under this system, both Austrian residents and non-residents may be subject to taxation. Individuals residing in Austria who spend more than 180 days annually in the country are considered formal tax residents, regardless of nationality. Tax residents must pay taxes on their worldwide income, including earnings from employment, business activities, investments, and property. Non-residents are taxed only on income sourced in Austria ("limited tax liability"). However, if a non-resident derives the majority of their income from Austria (e.g., over 90%), they may be classified as having "unlimited tax liability" and thus required to pay taxes on their global income. Non-Austrian nationals liable for Austrian taxes may benefit from Double Taxation Agreements (DTAs) based on the OECD Model Tax Convention, thereby avoiding double taxation on the same income.
According to the 2024 Global Report on Base Erosion, Austria loses approximately $130 million annually due to cross-border tax abuse—about 1% of its fiscal revenue—and has intensified investigations and penalties for major tax evasion cases (starting at €150,000 fines). To prevent tax avoidance and evasion, Austria participates in the Automatic Exchange of Information (AEOI) system, enabling tax authorities across jurisdictions to share data and enhance oversight of tax compliance. Within the domestic tax system, individuals use their Social Insurance Number (Sozialversicherungsnummer) as a tax identification number, typically registered through employers. Self-employed individuals can obtain this number via the Social Insurance Institution for the Self-Employed (SVS). Additionally, taxpayers require a personal tax identification number (ATIN), issued by tax offices upon registration at a new residence or directly with the tax authority. Enterprises should acquire a Value Added Tax Identification Number (UID Number) during company registration for VAT purposes.
2.2 Personal Income Tax
Austria levies personal income tax on worldwide income of residents and on Austrian-sourced income of non-residents. The tax rate progresses across six brackets: 20%, 30%, 41%, 48%, 50%, and 55%. Income below €13,308 is exempt from taxation. The top marginal rate of 55% is the third highest in Europe, behind Denmark (55.9%) and France (55.4%). For reference, the average maximum statutory rate across the EU is about 42.8%.
2.3 Corporate Tax
Since 2023, Austria’s corporate tax rate has been fixed at 24%, comparable to Spain (25%) and Belgium (25%), higher than Singapore (17%) but lower than South Africa (27%) and BRICS nations (27.20%). When companies distribute profits, a withholding tax of 23% (for corporations) or 27.5% (for other beneficiaries) applies at the shareholder level on dividends.
2.4 Value-Added Tax (VAT)
Austria’s standard VAT rate is 20%, reduced to 19% in Jungholz and Mittelberg regions, slightly below the EU average of 21.6%. Reduced rates apply to certain goods and services: 10% for books and food; 13% for cultural events, wine, and domestic flights. Exemptions include specific exports, cross-border services, healthcare, education, and financial services.
2.5 Other Taxes
In addition to the above, Austria imposes real estate tax and real property transfer tax on individuals. Businesses must pay municipal taxes to local governments where permanent establishments exist, withhold wage income tax for employees, and contribute to multi-tiered social security schemes alongside employees. In pursuit of environmental goals, the Austrian government levies taxes on energy, transportation, and pollution-related activities, including vehicle tax, one-time registration fees (based on vehicle emissions), carbon tax, and digital services tax.
Notably, Austria abolished formal inheritance and gift taxes in 2008. Gifts below certain thresholds are not reportable: gifts exceeding €50,000 from close relatives or partners, €15,000 from others, and occasional gifts such as artworks, household items, or amounts under €1,000 are exempt from reporting. By comparison, many European countries maintain high inheritance taxes—for example, the UK taxes estates exceeding £325,000 at 40%, while France and Germany generally impose rates between 20% and 45%.
2.6 Recent Tax Reforms in Austria
In 2025, to counter inflation, the Austrian government increased income tax thresholds. While the 55% tax rate still applies to incomes exceeding €1 million, all other tax brackets were adjusted upward by approximately 4%. This means individuals earning more than €13,308 per year will now become subject to income tax. Deductible allowances, such as those for single parents and retirees, were also modestly increased. A key change for small businesses is the rise in the VAT registration threshold from €35,000 to €55,000. As a result, companies with annual turnover below €55,000 are no longer required to register for or collect VAT.
3. Austria's Cryptocurrency Tax Regime
In January 2022, Austria passed amendments to its Income Tax Act (Einkommensteuergesetz, EStG), updating Section 27b related to capital income, establishing a systematic taxation framework for cryptocurrencies. Starting March 1, 2022, influenced by the European Environment Agency (EEA), Austria implemented an eco-social tax reform that also impacted its cryptocurrency tax policies.
As a founding member of the OECD, Austria adheres to the OECD Model Tax Convention, designed to prevent international double taxation and provide guidance against tax evasion. This model offers standardized clauses and structures for bilateral tax treaties, facilitating coordination and simplification of cross-border tax matters and promoting information exchange among governments.
3.1 Classification of Cryptocurrencies in Austria
The Austrian Ministry of Finance (FMA) classifies cryptocurrencies as intangible assets rather than fiat currency. Nevertheless, income derived from cryptocurrencies is taxable under the Austrian Income Tax Act (EStG).
According to the EStG, cryptocurrencies are defined as “a digital representation of value that is not issued or guaranteed by a central bank or public authority, does not necessarily have a link to a legally established currency, and lacks legal status as currency or tender, but is accepted by natural or legal persons as a means of exchange and can be transferred, stored, or traded electronically.” Claims arising from the transfer of cryptocurrencies are also treated as part of the crypto asset. This definition covers publicly issued cryptocurrencies accepted as payment media—including stablecoins—but excludes non-fungible tokens (NFTs) and asset-backed tokens (asset tokens). These excluded instruments are taxed according to general tax principles based on their specific characteristics.
3.2 Specific Cryptocurrency Tax Rules
3.2.1 Income Tax on Cryptocurrencies
Under Section 27a(1) of the Austrian Income Tax Act (EStG), income from holding cryptocurrencies is taxed at a special flat rate of 27.5%, separate from the progressive income tax scale. Such income falls into two categories: current income and realized gains. Definitions and taxable events are detailed below.
3.2.1.1 Current Income
Current income refers to compensation or returns earned directly through transferring or transacting cryptocurrencies. Taxable activities include interest from lending crypto, providing liquidity in decentralized finance (DeFi), participating in liquidity mining, operating master nodes, or receiving transaction fees—even when no new coins are generated. Activities that might seem similar but are not taxed include staking solely involving transaction validation without direct remuneration, receiving unsolicited transfers (airdrops), bounties, and cryptocurrencies obtained via hard forks. These are not taxed upon receipt (acquisition cost deemed zero), but their full value becomes taxable upon future sale.
It is worth noting that under the OECD Model Tax Convention, mining income does not fall under income from capital (Article 11) nor constitute business profits (Article 7); instead, it is categorized under Article 21 as “other income,” giving the taxpayer’s country of residence primary taxing rights. However, under Austrian law, paragraph 2 of Section 27b explicitly defines cryptos acquired through technical processes (e.g., mining) as generating current income.
3.2.1.2 Realized Gains
Taxation applies to gains realized from disposing of cryptocurrency holdings. Taxable events include converting crypto to euros or other fiat currencies, or using crypto to purchase goods or services. The gain is calculated as proceeds minus acquisition cost. Market fair value is presumed for sales prices. Transaction costs (e.g., trading or advisory fees) may be deducted from the basis, while expenses related to financial assets (e.g., electricity or hardware purchases) cannot, unless the taxpayer opts for the standard taxation method. Converting one cryptocurrency to another is not considered a disposal event and thus not taxable. Associated costs (e.g., gas fees, platform charges) are not significant enough for deduction, so the original cost basis carries over to the newly acquired cryptocurrency.
3.2.2 Loss Offsetting
Under general Austrian tax rules, profits and losses from cryptocurrency transactions can be netted against each other and combined with gains or losses from other capital assets, such as dividends or stock disposals.
3.2.3 Business Income
If cryptocurrency-related income is classified as business activity in Austria, it must be treated as business profit. In the crypto industry, mining and staking often involve specialized, costly equipment installed and operated at specific locations, typically meeting the definition of a “permanent establishment.” If cryptocurrency generation or associated income is attributable to such an establishment, the host country holds primary taxing rights. The home country of the enterprise usually exempts this income but may apply progression clauses.
In principle, the special 27.5% tax rate applies to both commercial and traditional capital assets. However, if cryptocurrency income forms part of a company’s core business operations, the special rate does not apply. Therefore, entities engaged in commercial crypto trading or professional crypto mining are not eligible for the preferential rate. Their income is taxed under the progressive income tax schedule. Any loss carryforward from crypto holdings treated as business assets is handled under the rules applicable to business capital losses.
3.2.4 Capital Gains Tax (Realized Capital Gain)
From January 1, 2024 onward, service providers in Austria must report capital gains for tax purposes. Starting in 2025, institutions obligated to withhold capital gains tax must issue tax reports for all cryptocurrency income upon request by the taxpayer.
Since 2023, capital gains tax (typically 27.5%) applies only when a profit is made from selling cryptocurrency. If a transaction results in a loss, it can offset gains from other crypto trades, reducing overall tax liability. Compared to previous rules, the revised framework limits taxable events to profitable transactions only and introduces favorable provisions allowing loss offsetting. Importantly, this applies specifically to capital appreciation from selling crypto. Active income sources like mining rewards or airdrops are not subject to capital gains tax.
3.2.5 Value-Added Tax (VAT)
As an EU member state, Austria aligns its cryptocurrency VAT treatment with case law from the Court of Justice of the European Union (CJEU). Conversions between Bitcoin and fiat currencies are exempt from VAT. Entities offering Bitcoin or related services are treated equivalently to those providing fiat-based services, with the tax base determined by the value of the Bitcoin asset. Furthermore, following CJEU precedent (Case C-264/14, Hedqvist, October 22, 2015), Bitcoin mining does not trigger VAT obligations because no identifiable recipient of a service exists under the court's interpretation.
4. Cryptocurrency Regulatory Framework
4.1 Markets in Crypto-Assets Regulation (MiCAR)
The Markets in Crypto-Assets Regulation (MiCAR) aims to establish a harmonized European regulatory framework governing public offerings, trading access, and service provision related to crypto-assets within the EU. It promotes innovation, harnesses the potential of crypto-assets, and safeguards financial stability and investor protection.
MiCAR defines "crypto-asset" in a technology-neutral manner as “a digital representation of value or rights that can be transferred and stored electronically using distributed ledger technology or similar technology.” The regulation sets requirements for transparency and disclosure in crypto issuance and trading, mandates authorization and ongoing supervision for Crypto-Asset Service Providers (CASPs) and issuers, establishes organizational standards for these entities, and includes investor and consumer protection rules for issuance, trading, and custody. It also contains anti-market manipulation provisions for crypto trading venues, grants powers such as ordering suspensions or enforcement actions, and establishes administrative sanctions, reporting duties, and procedural norms to ensure alignment with EU directives.
On July 3, 2024, the Austrian Parliament passed the MiCA Implementation Act (MiCA-VVG), effective July 20, 2024. It designates the Austrian Financial Market Authority (FMA) as the supervisory body, with the Austrian National Bank serving as a cooperating institution. Crypto platforms operating in Austria must now register and report under MiCAR. MiCAR reclassifies existing utility and payment tokens and sets differentiated white paper requirements accordingly.
4.1.1 Asset-Referenced Tokens (ART)
An ART is a type of crypto-asset distinct from Electronic Money Tokens (EMT), whose value is stabilized by reference to other values, rights, or combinations thereof (MiCAR Article 3(1)(6)).
Under Articles 16 and 20 of MiCAR, entities intending to issue ARTs must complete an authorization process prior to launch, and issuers must be legal entities established in the EU or authorized entities. The authorization process begins with a formal application (per Article 18). Technical standards remain draft-level and may transition until December 31, 2025.
Applications must include a legal opinion confirming the existence of the crypto-asset, its classification under MiCAR, and exclusion from EMT status. Finally, prospective issuers must publish a white paper before launching the token.
4.1.2 Electronic Money Tokens (EMT)
EMTs are designed to maintain stable value by pegging to a single official currency (e.g., euro, dollar) and are recognized in MiCAR as a specific category subject to tailored regulation.
Per Article 81(1) of MiCAR, only credit institutions or electronic money institutions may issue EMTs. Since EMTs are legally classified as e-money, Chapters II and III of the Electronic Money Directive (EMD) also apply. Unlike ARTs, EMT issuers do not undergo an authorization process but must notify the financial regulator (FMA) and publish a white paper.
4.1.3 Other Cryptocurrencies
Utility tokens and Bitcoin, which are neither ARTs nor EMTs and fall outside MiCAR exclusions, do not require issuance licenses. However, issuers must publish a white paper and comply with fair marketing, anti-fraud, and disclosure obligations.
4.2 Anti-Money Laundering (AML) Regulations
A core objective of Austria’s financial sector is preventing the financial system from being used to conceal or transfer illicitly sourced assets or fund terrorism. Thus, market participants must implement preventive measures—including Know Your Customer (KYC) procedures and transparent cash flow monitoring—to achieve this goal.
Certain crypto-related commercial activities may fall under money transmission laws. If a cryptocurrency is used as a payment method designed for payments among third parties and widely accepted across geographic areas, goods/services, or user bases, licensing may be triggered. Additionally, entities managing accounts linked to currencies, payment tools, or methods may need a Payment Service Provider (PSP) license.
The following business activities require registration with Austria’s FMA as Virtual Asset Service Providers (VASPs): custodial wallet services (holding, storing, transferring private keys for clients); exchanging crypto with fiat; exchanging one crypto for another; transferring crypto; and providing financial services for issuing or selling crypto. All VASPs must comply with AML, KYC, and customer due diligence obligations.
4.3 Scope of Crypto Policy and Tax Regulation
Aligned with the Eco-Social Tax Reform, Austria’s taxation of crypto holding income took effect on March 1, 2022, applying to crypto acquired after February 28, 2021 (“new assets”). Holdings acquired before this date (“old assets”) remain under the pre-reform regime, treated as economic property for tax purposes.
However, if old assets are used to generate current crypto income—for instance, through staking, airdrops, bounties, or hard forks—the new tax rules under Section 27b(2) of the EStG apply to any newly acquired crypto, which will then be classified as new assets.
4.4 International Cryptocurrency Regulation and Cooperation
At the international level, the OECD provides Austria with a framework for tax coordination, guiding how taxing rights over crypto income should be allocated between countries. For example, mining income treated as “other income” is taxed in the taxpayer’s country of residence. For business profits, the company’s resident country holds primary taxing rights unless the activity occurs through a permanent establishment (as defined in Article 5 of the OECD Model Tax Convention) in another jurisdiction.
The OECD is currently advancing the Crypto-Asset Reporting Framework (CARF), aiming to establish a global automatic information exchange mechanism for crypto assets. Austria will be required to comply with the AEOI standard under this initiative.
Additionally, to prevent double taxation, Austria has signed numerous Double Tax Conventions (DTCs) based on the OECD model, coordinating international tax obligations and ensuring clarity in taxing rights between countries. This system relies on robust international information sharing and cooperation, which simultaneously supports anti-money laundering efforts.
As a member of the Financial Action Task Force (FATF), Austria’s AML standards are strongly influenced by FATF’s “Guidance on Virtual Assets and VASPs,” imposing compliance requirements on virtual assets and service providers (exchanges, wallets, etc.). Crypto platforms must implement KYC and customer screening protocols and report suspicious transactions to the Austrian Financial Intelligence Unit (FIU).
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