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TAXES

1-2-3 Ticket: Everything you need to know about Austria’s nationwide rail pass

Known as the 1-2-3 Ticket, Austria's nationwide public transport pass just got one step closer to reality. Here's what you need to know.

Published: 26 January 2021 13:56 CET
Updated: 7 July 2021 09:47 CEST
1-2-3 Ticket: Everything you need to know about Austria's nationwide rail pass
Photo: DPA

Following the success of Vienna’s 365 ticket, in which residents of Austria’s capital city pay just €1 a day to use public transport, the Austrian government has flagged a similar scheme for nationwide travel. 

The government is hoping approve an annual ticket allowing unlimited travel on public transport all across the alpine state for €1,095 by the end of 2021.

The idea behind the 1-2-3 ticket is that eventually Austrian residents can choose to pay one euro per day for unlimited public transport in their own state, two euros per day for travel in two neighbouring states or three euros per day to travel throughout Austria. 

365 Ticket: Everything you need to know about Vienna’s cheap annual metro pass 

Plans for the Austria-wide ticket, also known as the ”climate ticket”, took a step forward on Friday, January 22nd, when Green party transport minister Leonore Gewessler announced Tyrol and Vorarlberg had signed a contract to go forward with the plans.

Salzburg also signed a similar contract last year.

Gewessler now says she hopes to approve the new ticket by the end of the year, with around 150 meetings being held in a bid to get all states signed up to the plan. 

When will the ticket be introduced?

The government plans to introduce the Austria-wide ticket first, and the federal tickets later. 

Once it is in place, passengers with existing season tickets should be able to exchange them for the 1-2-3 ticket, though those who wish to continue using their existing ticket may also do so. 

It is believed the Austria-wide ticket will be processed by ÖBB, Austria’s state railway company.

In rolling out the tickets at federal level, other transport organisations are involved.

The Kronen Zeitung reported earlier in January the Eastern Region Transport Association (VOR comprising Vienna, Lower Austria and Burgenland), wants all three options of the ticket to be introduced alongside the national ticket, saying this is the option preferred by passengers. 

Concerns were also raised last year by Upper Austria and Styria about overcrowding trains and buses.

Peter Gspaltl, head of the Styrian Transport Association, said the reforms to pricing needed to be accompanied by investment in expanding existing infrastructure.

He also said passengers wanted all three tickets to be introduced at the same time.

The Mayor of Linz, Klaus Luger, also voiced objections to the scheme in December, saying from a legal standpoint the plans went against the Austrian constitution.

He also said tariffs for local and regional transport should not be set by the federal government. However, Gewessler said on Friday that this report was already out of date.

 

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For members

TAXES

What freelancers in Norway need to know about tax

If you’re ready to venture out on your own as a freelancer, then it is essential to brush up on the tax rules and regulations in Norway.

Published: 20 January 2022 13:06 CET
Updated: 30 January 2022 09:50 CET
People going over their taxes and finances.
Here's what freelancers in Norway need to know about taxes. Pictured are people going over their finances. Photo by Scott Graham on Unsplash

Are freelancing and being self-employed the same thing?

According to the Norwegian website for government dialogue, Altinn, “A freelancer receives payment for individual assignments without being a permanent or temporary employee of the organisation he or she is carrying out work for, but does not need to be self-employed.”

This is helpful to clarify. Because when you decide to work for yourself in Norway, you can do this in a matter of two ways. The two most common methods to register your freelance work or self-employed business is as an enkeltpersonforetak, or as an AS, which is an acronym for aksjeselskap. 

In English, an enkeltpersonforetak means “sole proprietorship”. And an aksjeselskap means “Private Limited Company”. 

Both enkeltpersonforetak and AS come with their own set of positives and negatives. Technically, you are NOT considered a freelancer if you have set up an AS. 

If you have set up an AS, then you are considered an employee of your own company. 

The two may often be compared to one another. But in the eyes of tax law and the rules that apply to your freelance work, they are very different. If you are setting up an AS, it is highly recommended that you hire an accountant as the tax rules are intricate and very specific to what type of business you run.

If you are a freelancer working as an enkeltpersonforetak 

For a sole proprietorship, you need to pay advance tax quarterly – or four times a year in Norway. This is done by the freelancer calculating how much profit they expect their work to earn within the taxing quarter. 

It may be difficult to predict, which is why you shouldn’t worry if you make more or less than your original registered claim.

For example: Let’s say freelancer Petter registered with skatteetaten, the Norwegian Tax Administration, that he would make 50,000 kroner in the first quarter of the year. Suddenly, Petter unexpectedly gets five new clients and happily makes double, earning 100,000 in the first quarter instead, all Petter has to do is log into his skatteetaten account and adjust his original tax claim so the amount he pays in taxes will be accurate. 

The Norwegian Tax Administration determines how much tax is to be paid based on the expected profit. 

In addition to quarterly registers, freelancers are responsible for sending invoices, keeping track of their accounts, and creating their own pension scheme. They are also responsible for the value-added services, or VAT.

What is VAT?

This is where it can get a little confusing with the terms. The Norwegian VAT officially uses the acronym MVA, for merverdiavgift. And if that wasn’t confusing enough, Norwegians have developed a slang word for this type of tax called moms. 

So, VAT = MVA = merverdiavgift = moms. All four terms refer to the same type of tax.

For freelancers that have earned more than 50,000 kroner over the course of a year, they need to register their VAT, which is the sales tax on goods and services.  

Again, this is when you should double-check to see if your line of work can be VAT exempt. Specific industries, such as education and arts and culture, are exempt from registering their VAT. This is because they don’t have to pay VAT. But most importantly, they are not allowed to charge their clients VAT for their services or goods.

However, freelancers who work in VAT exempt industries can electively register their VAT so they can both charge VAT and receive VAT deductibles. 

The VAT tax rate has held steady at approximately 25 percent over the past decade. When you have registered the tax on your goods and services, it is possible to request a VAT refund on purchases made up to three years back in time.

This is, again, a really good time to know what you can deduct or get back with VAT. 

For example: Let’s say Anna works as a freelance PR agent and takes a potential new client out for a “working lunch”. Unfortunately, she cannot register the lunch receipt as a work-related deductible as it is not allowed to apply for a VAT deductible on foods. 

However, let’s say Anna bought a printer that was necessary for her PR services. She could apply for a 25 percent VAT deduction on the printer’s costs as it is deemed necessary work equipment.

To register VAT for your goods and services, look here. 

Programmes and accountants can help with this.

Accounting programmes and actual accountants can help ensure you are managing the administration side of your business correctly. And even if you have both of these helpful options, you should still give yourself enough time each week, or month, to keep your accounts up to date if you are a freelancer. 

Managing your own accounts and taxes can be overwhelming. Luckily, there are some different options available.

Having an overview of your accounts with an accounting programme is cheaper than hiring an accountant and a great way to keep a 24/7 overview of your business.

If you are intimidated by the math side of things, or worse, making an honest tax mistake that is still illegal, don’t worry. The newest programmes have a reputation of being easy to learn and user friendly. 

Here is a list of the top accounting programmes recommended for small businesses in Norway. 

Remember, Google Docs and Word are not an option for creating your own invoices, as all invoices must be auto-numbered. 

There is peace of mind in letting a professional handle your accounts, but you will have to pay for it. The average price for an accountant in Norway is around 500 kroner per hour plus VAT (value-added tax). 

If you choose to hire an accountant to manage your firm’s books, here is a list of what the average accounting services can cost you. 

If you’re still unsure

Learning your adopted country’s tax laws is both time-consuming and filled with small intricacies and loopholes. If ever you come across a new billing or taxing situation you’re not completely sure about. You can reach out to the Norwegian Tax Authority for more clarity.

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