Energy Package: Legislative Initiative for Energy Cost Relief

Overview

Soaring energy costs have recently become a burden for Austrian companies in various sectors and of various sizes. The Austrian Federal Government has therefore announced a relief package to counteract the inflation of energy prices. One of the proposed measures, for example, is the reduction of the electricity and natural gas levy. The Federal Ministry of Finance has also provided information on the possibility of a partial reduction in (corporate) income tax advance payments.

Reduction of the electricity levy and the natural gas levy 

The announced relief package provides for a reduction in electricity and natural gas levies, which will apply for a limited period from 1 May 2022 to 30 June 2023. During this period, the natural gas levy will be EUR 0.01196/m3 and EUR 0.0038/m3 for hydrogen, respectively, and the electricity levy will be EUR 0.001/kWh. The adoption of the law, scheduled for May, is pending.

Reduction of advance payments for (corporate) income tax

On 1 April 2022, the Federal Ministry of Finance informed about the possibility to reduce advance payments for (corporate) income tax for companies that are particularly affected by rising energy prices.

The Federal Ministry of Finance has provided two examples in which an economic impact due to rising energy costs can be assumed:

• Firstly, there is a claim for energy tax refund for the calendar year 2021 or the deviating fiscal year, ending in 2022.
• Secondly, the business reasonably demonstrates that the share of energy costs in total costs is more than 3 %. The total costs can be determined in a simplified way by deducting the profit from the turnover. In case of a loss, the loss increases the turnover in order to determine total costs.

In case the company is affected by rising energy costs – ie, one of the above two circumstances hold true – it is possible to reduce the advance payments for (corporate) income tax for 2022 to 50 % of the amount previously determined, provided that a reduction requested due to the changed economic conditions has not already been granted. Notwithstanding the preceding, advance payments can continue to be set at a lower level or at zero. However, the company must provide sufficient evidence to justify its request.