Austria's Vat And Duties: What's Included?

Austria's Value Added Tax (VAT) system is based on the European Union regime, as outlined in the EU VAT Directives. The country implemented a European VAT regime in 1973, replacing its sales tax. The Austrian VAT rules are incorporated in the Value Added Tax Act 1994, which was enacted to implement the European Union VAT rules for the following year, when Austria joined the EU. The standard VAT rate in Austria is 20% (19% in the regions of Jungholz and Mittelberg). Certain goods and services are taxed at reduced rates of 10% or 13%, while some are VAT-exempt. Foreign companies providing taxable supplies of goods or services in Austria may need to register for VAT. This includes importing goods into Austria from outside the EU, intra-community sales or purchases, and buying and selling goods within the country.

VAT registration in Austria

If you are a business owner selling goods or services in Austria, you may need to register for Value-Added Tax (VAT) and comply with Austrian tax regulations. VAT is a consumption tax applied to most goods and services in the European Union (EU), including Austria. The standard VAT rate in Austria is 20%, with reduced rates of 10% and 13% for certain goods and services, such as food, books, and accommodation.

Who Needs to Register for VAT in Austria?

Austrian businesses are obligated to register for VAT if they provide goods or services, regardless of frequency or their role as the main or secondary activity. Registration is also mandatory if a business needs to account for Austrian VAT on intra-community acquisitions of goods or intra-community supplies of services.

Non-Austrian companies must register for VAT if they conduct transactions in Austria that incur VAT payments and have the right of deduction. Previously, the VAT registration threshold for distance sellers was €35,000 annually, but since July 2021, this has been replaced by an EU-wide threshold of €10,000. This means that distance sellers only need to register for VAT in their country of origin unless they exceed the new threshold, in which case they must register in every EU country where they operate.

Small businesses in Austria with an annual turnover below €35,000 are exempt from mandatory VAT registration. Additionally, some businesses are entirely exempt from registering for VAT, including charitable organizations, public bodies not considered commercial enterprises, and juridical persons that do not function as business enterprises.

How to Register for VAT in Austria

To register for VAT in Austria, you must submit an application to the competent tax office, which depends on the location of your business. For Austrian residents, this is typically the tax office in the city or area where the business is located, while non-resident taxpayers must register with the tax office in Graz-Stadt.

The application form can be downloaded from the website of the Federal Ministry of Finance, and you will need to provide the following documents:

• Personal or company information, including full name or company name, address, contact information, and other relevant identification details.
• Nature of business activities, including the goods or services provided.
• VAT number in your country of origin, if applicable.
• Additional documents, such as a copy of your ID card (for natural persons) or legal documents like articles of association (for companies).

The registration process usually takes around one to three months, and you will receive a confirmation letter with your Austrian VAT number once approved.

VAT Compliance in Austria

Businesses registered for VAT in Austria must comply with specific rules when preparing invoices and maintaining their books. This includes issuing invoices with the required disclosure details outlined in the Austrian VAT Act, preparing e-invoices, and maintaining accounts and records for at least seven years.

VAT Returns and Payments in Austria

Businesses are required to file provisional VAT returns on a monthly or quarterly basis, depending on their annual turnover. The VAT return must be filed electronically by the 15th day of the second month following the tax period, and late returns may result in penalties of up to 10% of the tax due.

The deadline for paying Austrian VAT is the same as the VAT return deadline. Late payments will incur interest and surcharges of at least 2% of the net tax payable.

VAT obligations in Austria

VAT Registration

It is mandatory for companies to apply for VAT registration with the Austrian tax authorities before starting their activities. Non-European companies cannot register for VAT themselves in Austria and must do so through a local VAT representative. European companies, on the other hand, are not obliged to appoint a VAT representative but may appoint a proxy holder to facilitate their relations with the local tax authorities. Financial penalties may be imposed if the VAT registration application is submitted late.

VAT Returns

Companies are required to file provisional VAT returns on a monthly basis if their annual turnover from the previous calendar year exceeds €100,000. The returns must be filed electronically by the 15th day of the second month following the tax period to which it relates. Late VAT returns may result in penalties of up to 10% of the tax due.

Invoicing Rules

Invoices must include the minimum information outlined by the VAT Directive, and in some cases, countries may require additional information. The VAT rate mentioned on the invoice should correspond to the applicable rate for the goods or services provided in Austria. Invoices can be sent to customers in paper format or electronically.

VAT Refunds

There are several methods for companies to obtain refunds of Austrian VAT, depending on whether the company is established in Europe and/or is identified for VAT in Austria. Companies with a VAT number in Austria must submit a refund application within the required timeframe. If the company is established in a European country but does not have an Austrian VAT number, it must apply for a VAT refund electronically from its country of residence. Companies established outside of Europe and without an Austrian VAT number may need to appoint a tax representative to submit the refund application.

VAT Deduction Limits

Austrian VAT can generally be deducted if it is incurred for business purposes and all formalities are met. The Austrian tax authorities encourage companies to only accept invoices that contain the name and address of both the company providing and receiving the service, as well as a detailed description of the delivery or service purchased.

Statute of Limitations

In Austria, the statute of limitations is five years, meaning that both the taxpayer and the tax authorities can request the review of previous reporting periods up to five years prior to the current year. In cases of tax evasion, the tax authorities can go back up to ten years. The time limit for taxpayers to request a tax credit is also five years.

VAT compliance in Austria

While the EU sets the rules for VAT compliance, Austria is free to set its standard VAT rate and levy reduced rates on specific goods for economic reasons. Businesses registered for VAT in Austria must apply these rates when supplying goods and services and are held liable for any unbilled VAT if they fail to charge the correct rates.

VAT Rates in Austria

The standard VAT rate in Austria is 20% (19% in Jungholz and Mittelberg). The country also has reduced rates of 13% and 10%. The 13% rate applies to tickets to sporting and cultural events, domestic flights, pet food, and artists' services or products, among others. The 10% rate applies to most food products, books, hotel accommodations, rentals for residential purposes, newspapers, magazines, restaurants, passenger transport, pharmaceuticals, and the repair of certain products.

VAT Registration in Austria

Companies must apply for VAT registration with the Austrian tax authorities before commencing their activities. Non-European companies must register through a VAT representative, a local company that will represent them to the local VAT authorities. European companies are not required to appoint a VAT representative but may appoint a proxy holder to facilitate their relations with the tax authorities.

VAT Returns in Austria

Companies with an annual turnover of over €100,000 from the previous calendar year must file provisional VAT returns on a monthly basis. A quarterly reporting period applies if the turnover is below this threshold. The VAT return must be filed electronically by the 15th day of the second month following the tax period. Late returns may result in penalties of up to 10% of the tax due.

Invoicing Rules in Austria

Invoices must include the minimum information outlined by the VAT Directive, and additional information may be required by the country. Invoices must also state the applicable VAT rate. Austria has three different VAT rates: standard (20%), intermediary (13%), and reduced (10%).

VAT Refunds in Austria

There are several methods for companies to obtain refunds of Austrian VAT, depending on whether they are established in Europe and/or have a VAT number in Austria. VAT incurred on purchases, imports, or intra-Community acquisitions of goods and services can be reclaimed by foreign companies if they are for taxable activities and appropriate documentation is provided. However, VAT is non-recoverable or partially recoverable on certain expenses, such as living expenses and expenses related to cars, mixed vehicles, or motorcycles.

VAT rates in Austria

In Austria, Value-Added Tax (VAT), or Umsatzsteuer (USt) in the local language, is applied to most goods and services. The country has three different tax rates: one standard VAT rate and two reduced VAT rates. The standard rate is 20% and applies to most goods and services. There are some exceptions, however, such as in the regions of Jungholz and Mittelberg, where the standard rate is 19%.

The first reduced VAT rate is 13%. This rate applies to tickets to sports and cultural events, cinema, theatre, zoos, amusement parks, domestic flights, pet food, artists' services or products, and more.

The second reduced VAT rate is 10%. This rate applies to most food products, groceries, books, e-books, newspapers, magazines, pharmaceutical products, public transport tickets, hotel accommodations, residential rentals, and more.

There are also certain goods and services that are exempt from VAT in Austria. These include health services, financial services, investment advice, and various cultural institutions. Medical treatments, psychotherapists, and midwives are also VAT-exempt.

Businesses registered for VAT in Austria must apply these rates when supplying goods and services and are held liable for any unbilled VAT. The VAT is due 10 days after the VAT reporting period ends, which could be monthly or quarterly.

VAT refunds in Austria

In Austria, the Value Added Tax (VAT) is known as Umsatzsteuer (USt). There are several ways to obtain a refund of Austrian VAT, depending on the company's location and whether or not it has a VAT number in Austria.

If your company has a VAT number in Austria, it must submit a refund application within the timeframe required by local regulations. A VAT credit can be carried forward to the next period and may be claimed by submitting the periodic VAT return and sending a repayment claim letter to the relevant tax office.

If your company is established in a European country and does not have a VAT number in Austria, it will need to apply for a VAT refund electronically from its country of residence within the time limits required by Directive 2008/9.

If your company is established outside Europe and does not have a VAT number in Austria, it may need to appoint a tax representative to submit its refund application within the time limits required by the 13th Directive.

Non-EU residents can request a refund of VAT for goods purchased in Austria by meeting the following requirements:

• The invoiced amount, including VAT, must exceed EUR 75.
• Your passport or other cross-border travel document must indicate a domicile or residence outside the EU.
• You must export the item(s) with your personal luggage within three months of purchase.
• You must show the item(s) to customs officials, obtain a stamp, and prove the export of the item(s) to the seller before leaving the EU.

It is important to note that VAT incurred on certain expenses, such as living expenses and car-related costs, may not be recoverable or may only be partially recoverable.

Frequently asked questions