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Austria - Banking
There are approximately 3,000 ATMs throughout Austria, which will dispense cash around the clock - often in return for a small fee which varies but should be displayed on screen for each transaction, and be clearly identified on your bank statement. Each machine will display the card types accepted.
For several years before the 2008 global financial crisis, Austrian banks had been expanding internationally, particularly into Eastern Europe. The financial crisis impacted the Austrian banking industry enormously and the banks contracted. Slow growth rates, tightened banking regulations, a banking levy and the ongoing fallout from rescue packages within Austria, combined with difficult trading conditions in Eastern Europe, means the industry continues to be challenged. The “bad bank” Heta (which has an estimated £11bn of bad debt) in 2016 became the first test case under new European laws making state funded rescue of bank illegal; this threatened the beautiful and mountainous South Austrian region of Carinthia with bankruptcy over its status as a guarantor for the bank. However, the political and economic situation in Austria overall is stable, with the country maintaining an AA sovereign debt rating.
Austria boasts more than 800 commercial banks, including many major foreign banks with operations in Austria, in different sectors; these include the mortgage providers, savings and loans associations, building societies, co-operative banks, incorporated banks, provident banks, and private banks. However, only a small percentage of these banks provide personal banking services to individuals. At the present time there are over 5000 bank branches throughout the country, though cities have the best access to branches. The retail banking sector is working to reduce branches and staff numbers in an ongoing attempt to reduce overheads but this will take some time.
To open a bank account in Austria, you must provide documentation to confirm your identity and residence. This will normally include a passport, a Residence Registration form, utility bills and proof of employment. The welcome pack which sets out the terms and conditions of the account will normally be given on the day, with the debit card (“bankomatkarte”) arriving in the post a few days later.
Current accounts (“Girokonto”) will offer most expected services. Internet banking is normal, especially useful given the limited banking hours. Standing orders (“Daueraufträge”) and direct debits can be used to pay regular bills, and requested bank transfers can take place within hours if both the bank accounts involved are held with the same bank. Statements will be posted to the home address once a month, or will be available online.
Current accounts are not offered free of charge. There may be charges to open an account, monthly charges, or fees for specific services.
Each current account has an account number (“Kontonummer”) and every bank branch has a unique sort code (“bankleitzahl”). All accounts in the EU are allocated an IBAN number and BIC code, which are used for international payments.
Cheques, however, do not form part of normal Austrian banking. Travellers’ cheques can be issued at a bank branch after payment of the appropriate administrative charges but their use is rare.
If your account becomes overdrawn, you will face high penalty fees and interest charges. You can reduce these by arranging an overdraft facility (“dispokredit”) in advance of the overdraft occurring.
Savings accounts (“Sparkonto”) are also available. Rates will vary between banks and will depend on the length of time that funds are tied up for. If it is a savings account with instant access (which pay the lowest rates of interest) then a card will normally be issued so that funds can be withdrawn from the ATM.
Credit cards are widely accepted at most payment points; it is likely to be only very small businesses which do not accept them. Some businesses will display logos showing the types of card payment accepted, but this practice is dying out as it has become the primary means of payment. American Express and Diners Club cards are less likely to be accepted as a payment method because of the higher transaction fees charged to the retailer. Card payment terminals in Austria, in line with most European countries, will often only accept a Chip and Pin card, which may cause problems for those trying to use cards issued in the US.
If you wish to apply for a credit card when you move to Austria, you may find it difficult to be accepted by any bank until you have been resident and employed in Austria for a minimum of three months.
A taxation agreement between Austria and the UK aims to avoid double taxation and prevent tax evasion by allowing UK nationals resident in Austria to pay their taxes in Austria alone. This means tax on all income, earned in Austria or abroad, will be payable in Austria at rates set by the Austrian government. Austria operates a progressive tax system, whereby those who earn more will pay a higher rate of tax. UK residents are advised to contact their local HMRC office before leaving the UK, and then contacting the nearest tax office in Austria (known as the “Finanzamt”) as soon as possible once resident in the country. The website for the Austrian Ministry of Finance has lots of useful advice about the Austrian tax system and how to find your local tax office. The website is available in a number of languages including English. It is user friendly and includes a lot of information many foreign visitors will be surprised to see, such as a page about the Minister of Finance and the contact details of senior ministry staff.
If you need the services of a professional tax advisor, known as a “steuerberater”, they can be found on the website Kammer der Wirtschaftstreuhander which is for the professional organisation for tax advisers and accountants. Alternatively, look up the entries for Wirtschaftstreuhänder / Steuerberater in the online telephone directories.
When you enter Austria to live there, all your household goods and personal belongings can be imported without any VAT or import duty charges. This includes your personal vehicle, as long as it is not going to be sold. The section under Zoll / Wissenswertes / Fahrzeugimport on the Ministry of Finance website includes further information about importing vehicles.
You must register your vehicle for travel within Austria, at which point you will be asked to pay a tax called the Normverbrauchsabgabe or NoVA. There are some exceptions to this; organisations ÖAMTC or ARBÖ should be able to help with this. The section under Ämter & Behörden of the Ministry of Finance website includes further information about the NoVA.
Anyone entering or leaving any EU state carrying any sum equal to or exceeding €10,000, or its equivalent in other currencies or easily convertible assets, must declare this to the customs authorities. If you do not, you and your baggage may be detained, and the assets may be seized for further investigation.
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