Adopted by the Federal Cabinet Tax relief for citizens

In order to take the sting out of rising energy prices the Federal Government has adopted a package of tax relief. The commuting allowance, basic personal allowance and employees’ allowance for business related expenses are all to be raised, backdated to the beginning of the year.

Photo shows an income tax return

In response to high energy prices the Federal Government is reducing the tax burden on citizens through the commuters’ allowance, basic personal allowance and the employees’ allowance for business related expenses.

Photo: Getty Images/ollo

Rising prices, especially in the energy sector, are hitting many people hard. For this reason, the coalition committee agreed at the end of February to implement a comprehensive relief package worth over 15 billion euros. The package includes relief on electricity bills, one-off payments to recipients of benefits and tax reductions. The package will particularly benefit citizens on low and medium incomes.

In order to implement the agreed tax improvements, the Federal Government has launched the Tax Relief Act 2022.
The Act delivers the following tax reliefs, backdated to 01 January 2022:

  • The employees’ allowance for business related expenses on income tax is to be raised by 200 euros to 1,200 euros.
  • The basic personal allowance on income tax is to be raised by 363 euros to 10,347 euros.
  • The commuters’ allowance for long-distance commuters (starting from the 21st kilometre) is being increased from 35 to 38 cents for a limited period until 2026. This step has been taken a year earlier than originally planned. Tax relief for those on low incomes will be delivered through the mobility premium.