Double Taxation and Double Social Security Contributions
How to Avoid Them in Time

1. Why double taxation and double social security contributions can become a problem

Anyone who operates in several countries or earns income from different states risks being subject to tax or social security obligations in both countries. Entrepreneurs moving from Slovakia or other countries to Austria, or conducting business in Austria, should address the tax and social security implications early on.
Double taxation means that income is taxed in both countries, even though it concerns the same income. Double social security contributions may result in paying into two systems without receiving double benefits. Both scenarios can lead to significant financial burdens — but they can often be avoided with proper planning.

2. Double taxation: When it arises and how to avoid it

Generally, a person is taxed in the country where they have their main residence or centre of economic interests. However, this does not automatically mean that all income must be taxed solely in that country. In many cases, double taxation treaties (DTTs) apply, which determine which country has the right to tax and how double taxation can be avoided. Austria has agreements with many countries, including Slovakia.

Important points to consider:

• Unlimited tax liability in Austria: Anyone who relocates their main residence to Austria becomes subject to tax here — including on income from abroad.
  
  Tip: If you continue to earn income in Slovakia or another country, clarify early which country has taxation rights.


• Double taxation agreements (DTTs): These agreements define where specific types of income are taxed. In some cases, taxes already paid abroad can be credited.
  
  Tip: Taxation rules depend on the type of income (e.g. business profits, dividends, rental income). Reviewing the relevant DTT helps avoid unexpected tax claims.


• Cross-border business profits: Entrepreneurs operating in Austria while still running a business in Slovakia may be subject to taxation in both countries.
  
  Tip: Depending on your business structure, setting up a permanent establishment in Austria or adjusting your company setup may help avoid tax disadvantages.

3. Double social security contributions: When they occur and how to prevent them

It's not just taxes that can cause problems when operating in two countries — social security issues can also arise. Generally, a person is subject to the social security system of the country where they work. However, anyone working in several countries or regularly crossing borders must carefully check where they are obligated to pay contributions.
Special rules apply to entrepreneurs and self-employed persons. Those operating in Austria are generally required to join the Austrian Social Security Institution for the Self-Employed (SVS), while Slovakia has its own regulations.

Important points to consider:

• The principle of "integration": Anyone working or running a business in Austria is generally subject to Austrian social security contributions.
  
  Tip: If you are still paying into the Slovak system, check whether exemptions or alternative solutions are possible.


• A1 certificate for cross-border activities: This certificate confirms that a person remains covered by their home country’s social security system, even when working in Austria.
  
  Tip: If you are insured in Slovakia, apply for the A1 certificate early to avoid dual contributions.


• Pension rights in multiple countries: If you contribute to social security systems in different countries over the years, you should clarify how this will affect your future pension.
  
  Tip: In the EU, insurance periods from different countries are usually combined. Nonetheless, individual advice is recommended to avoid gaps in coverage.

4. When professional advice is a good idea

Avoiding double taxation and double social security contributions is often complex because different rules overlap. If you earn income from multiple countries or operate across borders, it's important to address tax and social security issues at an early stage.
Entrepreneurs doing business in Austria will benefit from tailored solutions. Misclassifications can lead to high back payments — while an early review can save time and money.

(This article does not replace legal or tax advice. For specific questions and personal support, feel free to contact us.)