In a news release published Wednesday, the country's Finance Ministry said its announcement followed moves by local retailers to pay workers extra for work during the crisis.
Austria, like many countries, has enacted draconian restrictions on movement to reduce the spread of the virus and has closed most businesses, except for essential services such as grocery stores. Grocery stores in turn must ensure that shelves are stocked quickly to fulfill needs and stem panic, putting extra pressure on employees.
"After the first announcements by various grocery store chains to pay their employees a bonus for their services in the corona crisis, the federal government wants to make this bonus payment tax free," said the ministry in a news release.
"Therefore, for those areas that currently maintain the system and are particularly at risk, such as staff in supermarkets, bonus payments from companies in the sense of [an extra monthly salary] should be made completely tax-free," the release added.
Austrian media have reported recently that big grocery store chains were giving employees bonus payments as a way of thanking them for working through the crisis. Spar, a major supermarket company in Austria, told Law360 that it had provided bonus payments worth about €3 million ($3.3 million) to employees.
"We are working on a solution to make bonus payments tax-free to people who are being paid for extraordinary work and being paid extra by the employer," said the country's finance minister, Gernot Blümel, in the news release. The tax change still must be approved by the country's Parliament, a spokesman said.
As the coronavirus pandemic has spread throughout the world, governments have enacted a number of tax measures to cushion the economic blow from the vast shutdown of public life that medical experts say is required to stop the spread of the virus. These include programs such as suspensions of tax payments, or exempting workers in certain sectors from payroll taxes.
--Editing by Robert Rudinger.
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