Freelancing Explained -
SVS and KSVF
Everything The topics of tax office, tax and insurance are a very complex field. We have tried to provide a little clarification and orientation in the following. We can never replace a tax advisor. It is intended as a guide, without any claim to completeness.
SVS and pension law
Regardless of the amount of profit, when you file your tax return you are considered an employed person (=person who works and earns money through his or her work) and is covered by the system. One becomes an active part of the social state. Thus, in the event of disasters such as the Corona pandemic, one has a right to aid payments.
In addition, one accumulates pension contributions and years of payment and becomes entitled to a pension of one's own. As a rule, you have to pay contributions for 15 years to be entitled to a pension. Childcare periods are taken into account.
Click on the link to find out more: Retirement pension (Ministry of Social Affairs)
Experience shows that musicians make little or no profit. This is due, among other things, to the high costs of buying and repairing instruments, but also to the fact that fees are still too low.
Little profit means → little tax means → little pension.
Note: The SVS calculates differently from the tax office, which is why you may not be liable for tax but have to pay quite high SVS contributions.
Since artists' fees are paid gross, it is therefore advisable to put money aside each month to be prepared when the bills come.
More information here:
Contribution information for new self-employed persons & freelancers (svs.at)
The Künstler:innen Social Security Fund - KSVF
The SVS contribution is paid quarterly (4 times a year). The tax is due once a year. To alleviate the burden of SVS contributions, Austria has introduced the KSVF ("Künstler:innen Sozialversicherungsfond"). You have to apply for this fund separately. It covers the minimum SVS contribution (max. 1.896€/year, as of 2023) and is therefore a great financial relief. In order to be admitted to the KSVF, you must earn a certain minimum amount per year through artistic activity(detailed requirements for the KSVF contribution). We recommend that you apply to the KSVF as soon as you start paying SVS contributions for the first time.
With the SVS, the third year of contributions is a tricky one. In the first two years you automatically pay the minimum amount (unless you have actively declared a higher income), and only in the third year do you pay the actual amount. It is best to get help from a tax advisor in the first year. If you know how much you should actually pay to the SVS (even if the invoices you receive are lower for the time being), you can save money for future years and be prepared for the additional payments or, even better, you can pay the higher contributions in the current year, which in turn saves tax.
More information on SVS and KSVF under the two links:
Social insurance for self-employed artists - WKO.at
Artists' Social Insurance Fund - ksvf.at