Opening a bank account in Austria as a US citizen

An Austrian bank account is one of the first things you need after arriving. Rent, utilities, the ORF contribution, phone contracts and salary payments all run through a local IBAN, and the tax office will only send refunds to an account it knows. Americans sometimes hear that European banks turn away US citizens. In Austria there is a legal backstop: the right to a basic payment account. This guide explains that right, what the bank will ask you for, and the US reporting rules that come with a foreign account.

Why you want a local account

You can pay many things from a US card, but daily life in Austria assumes a euro account in the SEPA system:

• Rent and operating costs are typically paid by transfer or direct debit.
• Salary: Austrian employers pay into a bank account.
• Tax refunds: the Ministry of Finance's Tax Book notes that the tax office can only use an IBAN and BIC for refunds, and that you should give your bank details when they are new or have changed.
• Phone contracts and SIM cards: when you buy a prepaid SIM, the federal portal oesterreich.gv.at lists electronic confirmation of your identity by a bank as one of the ways operators can register you.

The right to a basic account

Since September 18, 2016, every consumer in Austria has had a right to a basic account (Basiskonto), sometimes called an account for everyone. The Financial Market Authority (FMA), Austria's financial regulator, lists its core functions:

• cash deposits;
• cash withdrawals at the counter and at ATMs within the EU;
• direct debits within the EU;
• online payments.

A basic account cannot be overdrawn. There is no credit line.

### Who qualifies

The FMA says you need an official photo ID and lawful residence in the EU. As a US citizen living in Austria on a residence permit, you meet the residence part. Your passport serves as the photo ID.

### What it costs

The basic account is not free, but its price is capped. According to the FMA, a bank may charge at most €83.45 a year, and at most €40 a year for socially or economically vulnerable people.

### How fast

The bank must open the account within 10 business days of receiving your complete application.

### When a bank can refuse

The FMA lists only narrow reasons for refusal, including:

• you already have an account with an Austrian bank;
• you have committed a criminal offence against the bank or one of its employees.

Being a US citizen is not on the list. If a bank refuses, it must tell you in writing why. You can complain to the FMA or to the banking arbitration body.

### When a bank can close it

A bank can end a basic account with two months' notice in specific cases, for example if the account has not been used for 24 months.

Standard accounts

Most newcomers end up with a regular current account (Girokonto) rather than a basic account, because it offers overdrafts, debit card perks and packages. Requirements and fees vary by bank. Use the basic account rules as leverage: if a bank is reluctant to open a standard account because of FATCA paperwork, ask for a basic account instead, which the law entitles you to.

FATCA: why the bank asks for your Social Security number

The Foreign Account Tax Compliance Act requires foreign financial institutions to report to the IRS on financial accounts held by US taxpayers. The IRS explains that FATCA is an important tool against tax non-compliance by US persons with foreign accounts.

In practice, an Austrian bank opening an account for you will ask whether you are a US person and will ask for your Social Security number as your US taxpayer identification number. Have your SSN ready when you go to the branch.

Your US reporting duties

Opening the account also creates reporting duties for you, separate from what the bank reports.

### The FBAR

You must file an FBAR (FinCEN Form 114) if the aggregate value of your foreign financial accounts exceeds $10,000 at any time during the calendar year. The IRS stresses that this is cumulative: two accounts with a combined balance over $10,000 at one time must both be reported. An Austrian salary account plus a savings account can cross the line quickly. The FBAR is filed electronically with FinCEN, not with your tax return. It is due April 15, with an automatic extension to October 15.

### Form 8938

Form 8938, Statement of Specified Foreign Financial Assets, is filed with your tax return if your foreign assets exceed higher thresholds. For taxpayers living abroad, the IRS comparison page gives these:

• unmarried, or married filing separately: more than $200,000 on the last day of the year, or more than $300,000 at any time;
• married filing jointly: more than $400,000 on the last day of the year, or more than $600,000 at any time.

Lower thresholds apply to taxpayers living in the US: $50,000 and $75,000 for single filers, and $100,000 and $150,000 for joint filers.

Many people must file both. The IRS comparison page warns that penalties differ. For Form 8938, they can reach $10,000 for failure to disclose, with an additional $10,000 for each 30 days of non-filing after IRS notice, up to $60,000. FBAR civil penalties are adjusted annually for inflation and are larger for willful violations.

Interest income and Austrian tax

Interest from your Austrian account is income on your US return in dollars, and Austrian tax withheld on it can generally be considered for the foreign tax credit. The IRS explains that the credit is meant for income taxes paid to a foreign country on income also taxed by the US. Keep the year-end statements your bank provides.

Keeping a US account too

Most Americans keep at least one US account for US bills, Social Security deposits or US investments. Keep in mind that the FBAR threshold counts only foreign accounts, so your US accounts do not count toward the $10,000, while the Austrian account does. Track the highest balance of each Austrian account during the year, in euros, because the FBAR asks for maximum values.

A checklist for the bank visit

1. Bring your passport and residence permit card.
2. Bring your registration confirmation (Meldezettel) and an Austrian address for correspondence.
3. Have your Social Security number ready for the FATCA self-certification.
4. Ask for the fee schedule, and compare it with the basic account cap.
5. Once open, give your IBAN to your employer, landlord and the tax office.
6. Set a reminder to track your highest combined foreign balance for the FBAR.

Common questions

Can an Austrian bank refuse me because I am American? For the basic account, no. The FMA lists only narrow refusal reasons, such as already holding an Austrian account, and refusals must be explained in writing.

How much does a basic account cost in Austria? At most €83.45 a year, or €40 a year for vulnerable people, according to the FMA.

Do I have to report my Austrian account to the US government? Yes, on an FBAR if your combined foreign balances exceed $10,000 at any time in the year, and on Form 8938 if your assets pass the higher thresholds.

Why does the bank need my Social Security number? Under FATCA, foreign banks report accounts of US taxpayers to the IRS and must identify them with a US taxpayer number.