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Austria's coalition divided on tax-free private pensions
🇦🇹 Austria /Elections & Politics

Austria's coalition divided on tax-free private pensions

From Die Presse · () German

Translated from German, summarized and contextualized by DistantNews.

At a glance

News Named sources Context piece
  • Austria's ruling coalition is divided over a proposal to exempt capital gains from private pension investments from taxes after a holding period.
  • The conservative ÖVP party and the liberal Neos support the tax exemption, while the Social Democrats (SPÖ) oppose it, arguing it benefits only a few and diverts focus from taxing income.
  • The debate highlights broader discussions about strengthening Austria's private pension system, with the government aiming to broaden the retirement income base beyond the state pension.

Austria's ruling coalition is at odds over a proposal to boost private retirement savings by exempting capital gains from taxes after a minimum holding period. The conservative ÖVP party advocates for this measure, suggesting that after a period like ten years, taxes on stock profits should be waived, a policy that existed until 2011 with a one-year holding period.

We are not doing that.

— SPÖ parliamentary clubThe SPÖ's reaction to the proposal for a capital gains tax exemption.

The ÖVP's coalition partner, the Neos, supports the idea, viewing it as a long-overdue step to make private pensions more attractive and encourage long-term growth. They also suggest potential benefits for European startups and founders.

The proposal for a KESt exemption costs a lot of money and only benefits very few.

— SPÖ parliamentary clubExplaining the SPÖ's opposition to the tax exemption.

However, the Social Democrats (SPÖ), another key coalition partner, strongly oppose the proposal. They argue that a tax exemption on capital gains would be too costly and benefit only a small segment of the population. The SPÖ insists that the government's focus should be on reducing taxes for wage earners rather than for capital and wealth.

The political focus should be on tax relief for earned income instead of for capital and assets.

— SPÖ parliamentary clubStating the SPÖ's preferred tax policy.

Economist Thomas Url of Wifo also expressed skepticism, telling ORF that pension products should ideally pay out a pension at the end of their term, which he considers essential for retirement planning. The government generally agrees on the need to strengthen the second and third pillars of the pension system, but the specific tax measures remain a point of contention.

It is long overdue and an important lever for more attractive private retirement provision.

— Christoph PramhoferNeos capital markets spokesperson on the proposed tax exemption.
DistantNews Editorial

Originally published by Die Presse in German. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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