Austria's Vat Status: In Or Out Of The Eu?

Austria's Value Added Tax (VAT) is known as Umsatzsteuer (USt) in German. The country implemented a European VAT regime in 1973, and its VAT rules are incorporated in the Value Added Tax Act 1994. This was enacted to implement the European Union VAT rules for the following year, when Austria joined the EU. The Austrian VAT system follows the European Union regime, which is laid out in the EU VAT Directives. The country's VAT rates are set at 20% standard rate, 13% intermediate rate, and 10% reduced rate.

Austria's VAT rules

Austria implemented a European Value Added Tax (VAT) regime in 1973, replacing its sales tax. In the Austrian language, VAT is known as Umsatzsteuer (USt). 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 Austrian VAT system follows the European Union regime, which is laid out in the EU VAT Directives. This covers the obligations for registering foreign companies for VAT, their VAT return obligations, and compliance rules.

Austrian VAT Registration

If a foreign company is providing taxable supplies of goods or services in Austria, it may have to contact the tax authorities and register for VAT. There are several situations in which this obligation applies, including:

• Importing goods into Austria from outside the European Union.
• Intra-community sales or purchases of goods from another EU country.
• Buying and selling goods in Austria.
• Holding goods in Austria on a consignment stock basis.
• E-commerce sales of goods to consumers, subject to Austrian VAT registration thresholds.
• Organising live conferences or exhibitions with on-the-door payments.

Austrian VAT Compliance

Austrian VAT registration puts a significant burden on companies to prepare invoices and their books according to specific rules. This includes issuing invoices with the disclosure details outlined in the Austrian VAT Act, preparing e-invoices, and maintaining accounts and records, which must be held for at least seven years.

Austrian VAT Rates

While VAT compliance rules are set by the EU, Austria is free to set its standard VAT rate and levy reduced VAT rates on a limited range of goods for economic reasons. Businesses VAT-registered in Austria must use these rates when supplying goods and services. The current VAT rates in Austria are:

• Standard rate: 20% (19% in the regions of Jungholz and Mittelberg)
• First reduced rate: 13% (applicable to tickets to sports and cultural events, domestic flights, pet food, artists' services or products, etc.)
• Second reduced rate: 10% (applicable to most food products, books, hotel accommodations, rentals for residential purposes, newspapers, magazines, restaurants, passenger transport, pharmaceuticals, repair of certain products, etc.)
• 0% rate: Applies to intra-community supplies and international transport.

Austrian VAT Exemptions

Some supplies are VAT exempt in Austria, such as health services and financial services. Additionally, companies subject to VAT can benefit from input tax deductions in Austria. VAT incurred on purchases, imports, or intra-Community acquisitions of goods and services can be reclaimed by a foreign company, provided that these expenses are for taxable activities.

VAT registration in Austria

Austria implemented a European Value Added Tax (VAT) regime in 1973, replacing its sales tax. In the local language, VAT is known as Umsatzsteuer (USt). 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.

Who needs to register for VAT in Austria?

If a foreign company is providing taxable supplies of goods or services in Austria, it may need to contact the tax authorities and register for VAT. This obligation can be triggered by the following situations:

• Importing goods into Austria from outside the European Union.
• Intra-community sales or purchases of goods from another EU country.
• Buying and selling goods in Austria.
• Holding goods in Austria on a consignment stock basis.
• E-commerce sales of goods to consumers, subject to Austrian VAT registration thresholds.
• Organising live conferences or exhibitions with on-the-door payments.
• Receiving services in Austria under the reverse charge rule.

How to register for VAT in Austria

To register for VAT in Austria, you need to fill out an application form and submit it to the competent tax office. The application form can be downloaded from the website of the Federal Ministry of Finance. Additionally, you need to submit the following documents:

• Personal or company information: This includes details such as your full name (for individuals) or company name (for businesses), address, contact information, and any other relevant identification details.
• Nature of business activities: A description of the nature of your business activities, including the goods or services you provide.
• VAT number in your country of origin: If you are a non-Austrian company, you generally need to provide proof of your VAT number in your country of origin.
• Additional documents: Depending on whether you are an individual or a company, additional documents may be required. For individuals, a copy of your ID card is typically needed. For companies, you may be required to submit copies of your articles of association, commercial register, and other relevant legal documents.

Timeframe for VAT registration in Austria

It takes around 2 to 3 months to complete the VAT registration in Austria. Once your application is approved, you will receive a confirmation letter with your Austrian VAT number, and you can start charging and collecting VAT on your sales in Austria.

VAT rates

Austria implemented a European Value Added Tax (VAT) regime in 1973, replacing its sales tax. In the local language, it is called Umsatzsteuer (USt) or Mehrwertsteuer (MwSt). 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.

Austria has a standard VAT rate of 20% (19% in the regions of Jungholz and Mittelberg). The standard rate applies to all goods and services for which no exemption or reduced rate is foreseen.

There are also reduced VAT rates of 10% and 13%. The 10% reduced 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. The 13% reduced rate applies to tickets to sports and cultural events, domestic flights, pet food, artists' services or products, and more.

Some supplies and services are VAT exempt, such as health services and financial services, while others are zero-rated, such as exports or intra-Community supplies.

Businesses registered for VAT in Austria must use these rates when supplying goods and services and are held liable for any unbilled VAT.

VAT compliance

Austria implemented a European Value Added Tax (VAT) regime in 1973, replacing its sales tax. In Austria, VAT is known as Umsatzsteuer (USt) or Mehrwertsteuer (MwSt). The Austrian VAT system follows the European Union regime, laid out in the EU VAT Directives.

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 Austrian VAT system is overseen by the Ministry of Finance, which provides regular notices and decrees.

Austrian VAT compliance rules are set by the EU, but Austria is free to set its standard VAT rate and levy reduced rates on certain goods and services. Businesses registered for VAT in Austria must use these rates when supplying goods and services. If they fail to charge the correct rates, they are held liable for any unbilled VAT.

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

To register for VAT in Austria, companies must apply to the Austrian tax authorities before starting their business activities. Non-European companies cannot register for VAT themselves in Austria and must do so through a VAT representative, a local company that will represent them to the local VAT authorities. European companies are not obliged to appoint a VAT representative but may appoint a proxy holder to carry out tax formalities on their behalf.

Once registered for VAT, companies must comply with invoicing rules and maintain accounts and records, which must be held for at least seven years. Invoices must include the name and address of the company providing the service and the company receiving it, as well as a detailed description of the delivery or service purchased.

VAT returns must be filed electronically by the 15th day of the second month following the tax period to which it relates. Companies with an annual turnover of over €100,000 must file provisional VAT returns on a monthly basis; below this threshold, a quarterly reporting period applies. Late VAT returns may result in penalties of up to 10% of the tax due.

VAT Refunds

There are several methods for companies to obtain refunds of Austrian VAT. If a company has a VAT number in Austria, it must submit a refund application within the required timeframe. If a 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 Europe and without an Austrian VAT number may appoint a tax representative to submit a refund application.

VAT obligations

In Austria, the Value Added Tax (VAT) is known as Umsatzsteuer (USt) in the local language. The Austrian VAT system is based on the EU VAT Directives, and the country implemented a European VAT regime in 1973. The Ministry of Finance and the tax authorities, known as Finanzämter, are responsible for the administration of the Austrian VAT system.

VAT Registration

Companies must register for VAT with the Austrian tax authorities before starting their business activities. Non-European companies must register through a VAT representative, while European companies can appoint a proxy holder. Financial penalties may apply for late registration.

VAT Rates

Austria has a standard VAT rate of 20% and reduced rates of 10% and 13%. Certain goods and services are exempt from VAT or taxed at a reduced rate.

VAT Compliance

Businesses registered for VAT in Austria must comply with invoicing and record-keeping requirements. Invoices must include specific details outlined in the Austrian VAT Act, and records must be maintained for at least seven years.

VAT Returns and Payment

Companies 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. The deadline for paying VAT is the same as the deadline for the VAT return. Late payments may result in interest charges.

Reverse Charge

Austria has special reverse charge rules for foreign companies. The reverse charge is applicable for major domestic supplies of services by a non-Austrian business, where the customer is a taxable person or a non-taxable legal body.

Intrastat and EC Sales Listings

Companies that exceed certain thresholds must file Intrastat declarations within 10 days of the reporting period. Additionally, an electronic intra-Community listing must be filed by the end of the month following the reporting period.

VAT Refunds

There are several methods for companies to obtain VAT refunds in Austria, depending on whether they have a VAT number in the country or are established in Europe. VAT incurred on purchases, imports, or intra-Community acquisitions can be reclaimed by foreign companies for taxable activities with appropriate documentation.

Frequently asked questions