29 Apr 2025
Are you a Filipino expat in Austria wondering about your tax responsibilities? Navigating dual taxation can be tricky, but understanding the rules is key to managing it. Many Filipino expats face the challenge of being taxed in both Austria and the Philippines, which can lead to confusion and overpayment. This article explains the dual taxation system for Filipino expats, how to file taxes in both Austria and the Philippines, and strategies to avoid double taxation. Whether you have to send money to Philippines from Austria or plan to stay long-term, understanding these tax responsibilities is crucial for your financial planning.
Managing taxes across two countries can be overwhelming for Filipino expats in Austria. Let’s break down the key concepts behind dual taxation and how it applies to you.
Dual taxation refers to the situation where an individual is taxed by two countries on the same income. For Filipino expats living in Austria, this means you could potentially be liable for taxes both in Austria, where you earn income, and in the Philippines, your home country, where you still have tax obligations.
For example, if you work in Austria and earn income, Austria might tax your earnings. However, since you are still a Filipino citizen, the Philippines may also tax you on your global income. This is where dual taxation becomes a concern—if both countries tax the same income, you could end up paying more than necessary.
To avoid double taxation, it’s essential to understand how tax residency is determined in both Austria and the Philippines.
In Austria, tax residency is based on where you have your primary residence or habitual abode. If you have lived in Austria for more than six months, you are generally considered a resident for tax purposes. As a tax resident, Austria taxes you on your worldwide income, meaning both income earned in Austria and income from foreign sources will be taxed.
On the other hand, the Philippines considers you a tax resident if you stay in the country for at least 183 days in a year or if you maintain a permanent residence there. Filipino expats, however, may be exempt from taxation on foreign income, depending on the agreements between the two countries.
The Philippines and Austria have a Double Taxation Agreement (DTA) to prevent the issue of double taxation. This agreement aims to allocate taxing rights between the two countries and allows Filipino expats in Austria to avoid being taxed twice on the same income.
Under the DTA, if you are taxed in Austria, you may be eligible for tax relief in the Philippines. This typically comes in the form of a tax credit, which reduces the amount of Philippine tax payable by the amount of tax you have already paid in Austria. This ensures that you aren’t overburdened by taxes in both countries.
Understanding how and when to file taxes in both countries is crucial for Filipino expats to ensure compliance and avoid penalties.
For Filipino expats working in Austria, filing taxes involves submitting an annual income tax return. The tax year in Austria follows the calendar year, and the tax return is due by April 30 of the following year if filed by paper, or June 30 if filed electronically.
Austria uses a progressive tax system, so the amount you pay depends on your income level. If you are employed, your employer will likely withhold taxes from your paycheck. However, even if taxes are automatically deducted, you may still need to file a tax return to ensure you pay the correct amount and claim any applicable deductions.
Expats should keep track of their income from both Austrian and foreign sources, as it may impact their tax filings. The Austrian tax system allows for certain exemptions and deductions, which can help lower your taxable income. Common deductions include those related to work-related expenses, child allowances, and social security contributions.
In the Philippines, Filipino expats must report their global income when filing taxes, although they may be eligible for relief under the DTA with Austria. Filipino expats should file their taxes with the Bureau of Internal Revenue (BIR) using the correct forms, typically the BIR Form 1701 for self-employed or mixed-income individuals.
The Philippines provides several tax exemptions for foreign income, but you must provide proof of the taxes paid in Austria to claim these exemptions. If you’re earning income abroad, you may also need to submit documents like your Certificate of Tax Withheld from Austria or a copy of your Austrian tax return.
It’s important to be aware of the deadlines for tax filing in the Philippines. The deadline for individuals to file their tax returns is typically April 15 of the year following the tax year. Filipino expats are advised to file on time to avoid penalties and interest.
Filipino expats in Austria can benefit from various tax relief options, including the foreign tax credit under the DTA. This allows you to reduce the amount of taxes owed in the Philippines by the amount of tax already paid in Austria. Additionally, Austria offers tax exemptions for certain types of income, such as pensions and social security payments.
In the Philippines, tax exemptions may apply to specific income earned abroad, but the process can be complicated. It’s essential to maintain thorough records of all foreign income and taxes paid to claim relief. Some tax incentives are available to help reduce your taxable income, such as deductions for dependents or education-related expenses.
Managing taxes as a Filipino expat in Austria requires careful attention to both countries' tax systems. By understanding dual taxation and filing taxes correctly in both Austria and the Philippines, you can avoid overpaying taxes. It’s crucial to stay informed about the agreements between the two countries, as they provide mechanisms like tax credits to ease your financial burden.
Filipino expats should also keep an eye on available tax reliefs and exemptions that can significantly reduce their taxable income. Remember to stay compliant and seek expert tax advice if necessary. Filing taxes properly ensures that you avoid legal issues and stay on the right side of both tax authorities.
If you’re sending money home to your family in the Philippines, it’s important to choose a reliable service to avoid unnecessary delays. So, don’t forget, you can always use online money transfer from Austria to Philippines for more convenience and fewer hassles.
You can avoid double taxation by leveraging the Double Taxation Agreement (DTA) between Austria and the Philippines, which allows you to claim tax credits for taxes paid in Austria when filing your tax return in the Philippines.
In Austria, the tax return is due by April 30 of the following year if filed by paper, or June 30 if filed electronically.
Yes, Filipino expats are required to report all foreign income when filing their taxes in the Philippines, though exemptions may apply depending on the tax treaty.
Filipino expats in Austria can claim various tax reliefs, including exemptions for work-related expenses and social security contributions. Additionally, the foreign tax credit helps reduce taxes owed in the Philippines.
You can send money to the Philippines from Austria using online money transfer services like ACE Money Transfer, ensuring quick and secure transfers for your family back home.
