Austrian VAT legislation has been integrated into the Value Added Tax Act of 1994. It was adopted to implement European Union VAT regulations. It was made with this in mind, bearing in mind that Austria would join the EU a year later. The Act is supported by secondary legislation and judicial reviews, In addition – the Ministry of Finance, which oversees the operation of the VAT system, regularly issued notices (Verordnungen) and decrees (Erlässe) regarding all changes and regulations.
The Austrian VAT system is compatible with the European Union system as defined in the EU VAT directives. It includes duties in the following areas:
- registration of foreign companies for VAT purposes,
- obligations regarding VAT returns,
- compliance rules.
In Austria, as same as in all other EU member states, VAT is the tax paid by consumers. Business customers are obligated to paying VAT, but this VAT is refunded.
Austria, as a member of the European Union is undertaken to strictly comply with directives. Despite EU VAT rules, Austria is still free to set its standard VAT rate. It can also raise reduced VAT rates on a limited range of goods just for economic reason.
Foreign entrepreneurs shipping them company in Austria has to registered in Austria to VAT purposes and must to comply with applicable regulations (use these rates when supplying goods and services). If they let down to charge the correct rates, they are liable for any unbilled VAT.
VAT liability ensures that tax payers collect VAT from customers and pass it on to the relevant tax office.
The obligation to registration for Austrian VAT
Foreign company that sells goods or services on the Austrian market is required to register for VAT. Austria as a member of the European Union, like other EU countries, needs VAT registration in situations typical for this process:
• shipping or purchase of goods from other EU countries (intra-community sales),
• import of goods to the territory of Austria,
• all trade, purchase and sale in Austria,
• sale of goods to local customers on the basis of consignment storage agreements,
• live events, including exhibitions, conferences, concerts,
• own-cost delivery of goods
Registration thresholds Austrian VAT
With the introduction of the VAT OSS, the limits for distance sales to the European Union have been unified and currently it is EUR 10,000 net excluding the value of foreign VAT. It is a fixed value independent of the conversion rate or the country of the buyer. This means that companies no longer have to monitor sales limits to individual European Union countries.
The Austrian VAT rates (including reduced rates)
- 20% is the standard VAT rate in Austria and it applies to most goods and services.
- 13% is the first reduced VAT rate (only since 2016) is applicable in Austria for: deliveries of live animals and plants, hotel accommodation, accommodation services, firewood, cultural services, domestic flights, sporting events, amusement parks, cultural sector, some agricultural supplies, wine production, cut flowers and plants for decorative use
- 10% VAT rate is the second reduced rate and it applies in the following areas: accommodation and costs incurred, such as heating costs or renovation work, renting or leasing, food, domestic transport and international transport, passenger transport, foodstuffs; restaurant and catering services (excluding alcoholic beverages and non alcoholic beverages), water supplies, pharmaceutical products, feminine hygiene products, household linen, domestic transport (excluding flights), international and intra-community road and rail transport, newspapers and periodical, printed books, e-books, cable TV, TV licence, social services, domestic refuse collection, treatment of domestic waste and waste water, cut flowers and plants for food production; some agricultural supplies, writers and composers services
- 0% VAT rate is applied on intra community supplies transactions and international transport.
VAT Exemption in Austria
As in actually all European Union countries, companies subject to VAT can also benefit from input tax deduction in Austria. VAT already paid on services or supplies by other entrepreneur is deducted from their own VAT liability. Under some circumstances, the tax office can provide a refund if, for example, the VAT already paid is higher than the own VAT debt.
Exempt from VAT are:
- Under certain conditions: cultural institutions and associations
- Entrepreneurs with an annual turnover of less than 35.000€ -> small businesses
Information required to obtain an Austrian VAT number and registration
The relevant forms and the following documentation are required from the Austrian tax office:
- Business licence,
- a VAT certificate confirming that the company is registered as a VAT payer in another European Union country (if applicable),
- company statute – extract from the company’s national commercial register.
To be able to register as a Austrian VAT payer you have to submit an online application in Austrian financial administration system. The necessary forms for registration can be downloaded from the website of the Austrian Ministry of Finance. Non-resident companies located in the EU have the option of direct registration.
Obligation to submit a VAT return
Austrian entrepreneurs that are VAT tax payers are obliged to submit a VAT returns at the end of a calendar year and during the year to also (monthly/quarterly) advance VAT returns and other reports. Foreign companies trading in Austria must already submit VAT returns during the calendar year.
Tax point for Austrian VAT
The tax point (time of supply) rules in Austria set when the VAT is due. It is then payable monthly or quarterly) to the tax authorities 10 days after the VAT reporting period ends. For all goods, it is the time of delivery or passage of title (there are a few exceptions). For services, it is the completion of this service. If the entrepreneur wants get the VAT refunded, the must submit an online application to the relevant tax office.The companies that have not yet registered have approximately 15 days to complete the procedure. The Federal Central Tax Office check whether or not a company is entitled to a refund of VAT.
Useful information for Austrian companies
For transactions within the EU, both business partners have to provide their VAT ID (VAT number). The VAT number may be checked in international system by the tax authorities in to prevent tax fraud.
The companies in Austria are obligated to issue the invoice by the 15th of the month on which the delivery arrives. In order to benefit from the tax exemption, the Austrian company has to present all documentation to the tax office.