Austria VAT

Austria implemented the European VAT system in 1973, replacing its sales tax.

 

Austrian VAT rules have been incorporated into the 1994 Value-added Tax Act, which came into force on 1 January 1995. In line with this, the Single Market Regulations are implemented together with the VAT Act in order to align the EU VAT system with that of other countries. The bill was supported by secondary legislation and judicial review. In addition, the Ministry of Finance, which oversees the operation of the VAT system, regularly issues notices (Verodnungen) and decrees (Erlasse).

 

Austria is subject to EU VAT rules and is part of the EU's single market economy. The VAT Directive, issued by the European Union, sets out the principles of the VAT system adopted by member states, including Austria. These directives take precedence over local legislation

 

VAT Registration

Who needs to register for Austrian VAT?

If a foreign company provides taxable goods or services in Austria, it may be necessary to contact the tax authority and register for VAT. The circumstances that trigger this obligation are similar (but different) to those in other EU member states. They include:

• Import goods into Austria from outside the EU.
• Intra-community sale (delivery) or purchase (acquisition) of goods from another EU country
• Buy and sell goods in Austria.
• Hold goods in Austria on consignment stock. Cancellation of stock arrangements is exempt.
• E-commerce, which sells goods to consumers, is subject to the Austrian VAT registration threshold.
• Organize on-site meetings or exhibitions by paying at your door.
• If a company is a non-VAT trader but receives services in Austria under reverse charge rules.
• Self-sufficiency in goods.

 

Foreign companies can register for VAT in Austria without having to incorporate locally - this is known as non-resident VAT transactions. Austria has no VAT threshold for registered foreign traders and the VAT department must receive the VAT number application within 30 days of the first taxable supply. This also applies in the case of the implementation of intra-Community acquisitions by foreign enterprises, as these may trigger the need for VAT registration.

From July 2021, new EU-wide regulations come into force. The VAT threshold for specific countries/territories (€35,000 in Austria) was removed and replaced with an EU-wide distance sales threshold of €10,000.

 

Austrian VAT rates

The European Union harmonizes VAT by defining the level of VAT rates in all member states. The directive sets the framework for harmonisation and stipulates that VAT rates must not be lower than 15%. There is no ceiling on VAT rates. While the EU sets VAT compliance rules, Austria is still free to set its standard VAT rates. It may also impose lower VAT rates on a limited range of goods for economic reasons.

 

Austria's standard VAT rate is 20% (19% in some places). Some goods and services are subject to a 13% intermediate rate or a 10% VAT reduction. According to the Tax Reform Act 2020, several changes to the Austrian value-added Tax law came into effect on 1 January 2020 (e.g., a 10% reduction in the VAT rate for the supply of e-books and e-paper, the removal of simplified rules for inventory, new rules for chain transactions). Under the Tax Amendment Act 2022 (' Abgabenanderungsgesetz 2022 '), further changes to the Austrian VAT Act entered into force (e.g., VAT exemption for cross-border passenger transport by air or sea, extension of 0% VAT rate for supplies and internal transport, extension of 0% VAT rate, extension of 0% VAT rate for internal transport, Community purchase protective masks by June 30, 2023). A second reduction in the VAT rate of 5% was temporarily implemented due to the coronavirus pandemic. Some services, including banking, health and education, are exempt from VAT.

 

The current tax rates are shown in the table

Rate	Type	Categories of Products or Services
20%	Standard	All other taxable goods and services
13%	Reduced	Domestic flights; entrance to sporting events; admissions to cultural events and amusement parks; firewood; some agricultural supplies; wine production (from farm); cut flowers and plants for decorative use
10%	Reduced	Foodstuffs; take-away food; water supplies; pharmaceutical products; domestic transport (excluding flights); international and intra-community road and rail transport; newspapers and periodicals; printed books; e-books; pay and cable TV; TV licence; social services; domestic refuse collection; treatment of waste and waste water; restaurants (ex all beverages); cut flowers and plants for food production; some agricultural supplies; writers and composers
0%	Zero	Intra-community and international transport (excluding road and rail); hotel accommodation

 

VAT compliance

Austrian VAT registration puts a significant burden on companies to prepare invoices and their books to exact rules.   

This includes:

• Issuing invoices with the disclosure details outlined in the Austrian VAT Act.
• Preparation of e-invoices.
• Maintenance of accounts and records, which must be held for at least seven years.
• Correct invoicing of customers for goods or services in accordance with the Austrian time of supply VAT rules.
• Processing of credit notes and other corrections.
• Use of approved foreign currency rates.

 

VAT declaration

How often are Austrian VAT returns required?

In Austria, businesses with an annual turnover of more than 100,000 euros are required to file monthly returns. Businesses with an annual turnover of between 35,000 and 100,000 euros are required to file quarterly VAT returns. Annual VAT returns are also required. Businesses with an annual turnover of less than 35,000 euros fall under the tax-free scheme, which exempts them from VAT and allows them to return it regularly. Monthly or quarterly VAT returns in Austria must be filed on or before the 15th of the second month following the end of the tax period. (Taxpayers with sales of up to 100,000 euros in the previous year can file their returns quarterly, but they also have the option of filing monthly.)

 

What Austrian VAT can be deducted?

In addition to declaring sales or output VAT in the Austrian return, companies can offset this by the corresponding input or purchase VAT. There are some exceptions, including:

• entertainment
• purchase and lease of cars, motorcycles and other vehicles
• goods and services that are used less than 10% for business purposes

 

Austrian VAT penalties

If there are misdeclarations or late fillings of Austrian VAT returns, foreign companies may be subject to penalties.  Late filings are subject to a charge of 10% of the VAT due. If the payment is delayed, there is a further charge of 2% of the VAT due. There is a five year statute of limitations for Austrian VAT, except for fraud, in which case it is extended to ten years.

 

How are Austrian VAT credits recovered?

If there is a surplus of VAT inputs over outputs (more VAT incurred than charged), then an Austrian VAT credit arises.  In theory, this is due back to the VAT registered business.  The deadline for making a claim is 30th September (30th June for non-EU businesses) of the following year to which the claim relates.  Supporting documentation is not usually required but under certain circumstances the Austrian tax authorities may request additional information such as original invoices.

 

Decisions on refunds may take up to four months but once the refund has been granted payment will be made within 10 working days.

 

VAT Recovery in Austria

The refunds due to taxable persons are paid by the tax authorities after processing the year-end VAT return.   However, if the VAT refund due is failed to be paid within a reasonable period, an interest on the outstanding amount will accrue.   The said reasonable period will be determined by the national court.

 

Non-established businesses may apply for VAT refund within six months after the year wherein the refund claim was determined and the claim amounts to at least EUR 400.   However, non-registered persons cannot claim a refund of their input VAT.

 

Filing Procedures:Filing for Austrian returns are done electronically unless circumstances prohibit the taxpayer from doing so.   Filings are made via the “FinanzOnline” portal.

 

Invoice Requirements

Taxable people in Austria are generally required to issue VAT invoices for supplies made to other taxable persons and legal entities, including exports and intra-community supplies. This responsibility normally does not apply to VAT-exempt supplies.

 

A VAT invoice is necessary to substantiate a claim for input tax deductibility or reimbursement under the EU refund schemes.

 

Austrian VAT invoices must be issued at the latest six months after the taxable supply.    For intra-Community supplies where the reverse charge rule applies an invoice should be issued within fifteen days of the month following the taxable supply.

 

Invoices must be stored for seven years.Austria, like all EU member states, now permits the use of electronic invoices under certain conditions. Electronic invoicing is not mandatory in Austria. This may be used voluntarily, however, is required for most of business to government (B2G) transactions

 

Simplified invoices are permitted for sales of EUR 400 or less.This type of invoice will only require the gross amount and the VAT rate to be stated in the invoice.

 

Invoices must contain at least the following basic information:

• Date of issuance
• A unique, sequential number
• VAT number of the supplier
• VAT number of the customer (if supply exceeds EUR10,000)
• Full name and address of the supplier and customer
• Full description of the goods or services provided
• Details of quantities of goods, if applicable
• A date of the supply if different from the invoice date
• The net, taxable value of the supply
• The VAT rate applied, and the amount of VAT (the amount of VAT must be stated in EUR)
• Details to support zero VAT – export, reverse charge or intra-community supply
• Details of any margin schemes applied e.g. works of art, collector’s items and antiques.
• The total, gross value of the invoice