Austrian coalition overhauls tax system, sets CO2 pricing

Austria's governing coalition clinched a tax overhaul deal on Sunday that combines a new carbon pricing scheme with tax cuts for individuals and companies, officials said. Family "bonus" allowances rise to 2,000 euros per child from mid-2022 from 1,500. The cuts will provide around 18 billion euros ($20.9 billion) in tax relief by 2025, officials said.

Austria's governing coalition clinched a tax overhaul deal on Sunday that combines a new carbon pricing scheme with tax cuts for individuals and companies, officials said. The accord between Chancellor Sebastian Kurz's conservatives and the ecological Greens includes a new system to tax carbon output not already covered by the European emissions trading scheme.

It set a price of 30 euros per tonne of carbon dioxide (CO2) from 2022, rising to 55 euros in 2025. Corporate tax rates will gradually fall to 23% from 25% now, while income tax rates for people in two income brackets also drop. Family "bonus" allowances rise to 2,000 euros per child from mid-2022 from 1,500.

The cuts will provide around 18 billion euros ($20.9 billion) in tax relief by 2025, officials said. ($1 = 0.8625 euros)

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