Value Added Tax (VAT) Guidelines: Austria

Generally, the following supplies would be taxable in Austria:

 

Supplies of goods are transactions through which an entrepreneur enables a customer or a third party acting on his behalf to dispose of the good in his own name. The supply of services covers all other transactions which do not constitute a supply of goods. 

 

Certain transactions are not subject to Austrian VAT, such as cash payments, genuine compensation payments (damages), business restructurings covered by the Austrian Reorganization Tax Act and supplies within a VAT group or between the head office and a branch (exception: intra-Community transfer of goods).

 

The standard VAT rate is 20 percent, the reduced VAT rate is 10 percent or 13 percent. Due to the Corona Pandemic and VAT rates were reduced for certain services and supplies until 31 December 2021.

 

There are numerous VAT exemptions. It will be distinguished between VAT exemptions with input VAT recovery (so-called zero-rated supplies) and VAT exemptions without an input VAT deduction (exempt supplies).

 

Zero rated supplies, for example, are:

VAT exempt supplies without input VAT deduction, for example, are:

 

Entrepreneurs whose turnover for the previous calendar year exceeded EUR 100,000 are obliged to submit monthly VAT returns. If the previous year’s turnover exceeded EUR 35,000 but did not exceed EUR 100,000, VAT returns must be submitted on a quarterly basis. If the provisional return is submitted on time for the first calendar month of the tax period, the calendar month may be chosen as the tax period.

The VAT identification number (UID) is an original identification number for enterprises registered for VAT. Each company obtains only one Austrian VAT identification number, even if it has several branches or carries out several activities. 

 

The VAT identification number is an individual identification number for companies registered for VAT. Each business receives only one Austrian VAT identification number even if it has several branches or carries out several activities.

 

The VAT identification number only applies to businesses. When a business provides its VAT number, it indi­cates that it is receiving services as a business (and not as a consumer) and provides information about where its business operates.

 

Non-Austrian entities who supply goods or services in Austria for which the tax liability is not shifted to the recipient under reverse-charge are obliged to register with the Graz-Stadt tax office. 

 

There are some simplification rules to avoid a registration for VAT purposes in Austria:

Entrepreneurs liable to Austrian VAT are required to submit an annual VAT return for each calendar year. Most registered businesses are required, in addition, to submit (preliminary) VAT returns on a monthly or quarterly basis (depending on the turnover of the previous year) during the year. 

 

Monthly and quarterly VAT returns must be filed electronically, unless doing so would represent an undue hard­ship. In general, self-assessment and payment of VAT is due by the 15th day of the second consecutive month following the month (quarter) in which the supply has been carried out. VAT payers must also file nil VAT returns. Failure to furnish a VAT return in time may result in a late-filing penalty. The penalty is up to 10 percent of the outstanding VAT payment.

 

If an entrepreneur supplies goods, which are shipped from Austria, to VAT registered businesses in other EU Member State, it is required to correctly complete ESL forms (recapitulative statements) electronically. Other­wise, there might be an audit to check the formal requirements for the zero-rated supplies. 

 

It is mandatory for businesses to also state in their ESL those taxable supplies of services executed in other EU Member State for which the recipient of the service, who is established in another Member State, owes VAT in said Member State under the reverse charge mechanism.

 

The ESL must be submitted electronically monthly or quarterly within one month. Non-compliance with the obligation to properly file ESLs may result in a penalty of up to 1 percent of the reportable intra-Community supplies, at the maximum up to a sum of EUR 2,200. In addition, intra community supplies would be deemed taxable.

The Intrastat report is a statistical record concerning the intra-Community trade of goods.

 

VAT registered entrepreneurs with a value of dispatches or deliveries to or from EU Member States, which exceed a certain threshold (currently EUR 750,000), must submit supplementary declarations each month.

 

Intrastat reports can be filed electronically or in paper form. There is a penalty of up to 10 percent for late filing of the tax return, if the late filing is not excusable. 

 

In addition, there are late-payment surcharges for taxes that are not paid before the final due date. The first late payment surcharge amounts to 2 percent of the amount of tax that should have been paid. The second late payment surcharge of 1 percent must be paid when the tax is not paid within three months after the final due date. The third late payment surcharge must be paid if the tax in not paid for another three months and amounts to 1 percent as well.

 

If your business is carries out taxable transactions in Austria it is possible to declare and claim Austrian input VAT within the VAT return on the regular tax procedure under further preconditions. A mere VAT registration does not suffice.

 

It is also possible to recover Austrian input VAT if an entrepreneur is not obliged to file VAT returns in Austria and does not have its domicile, registered office, place of management or a permanent (fixed) establishment in Austria.

 

There is in principle no difference in the conditions for refund for businesses established in the EU or outside the EU, except for how the application for refund should be submitted. The refund period must not be more than one calendar year or less than three calendar months unless the period covered represents the remainder of a calendar year. 

 

Foreign entrepreneurs who are established in the EU must apply for refund by submitting an electronic appli­ca­tion to the competent authority in the EU Member State where they are established. The application must be submitted to the competent authority within nine months after the end of the calendar year to which the application is pertaining.

 

Applicants established outside the EU shall apply to the Austrian Tax Authority for refund of VAT in a special form. The application for refund must be submitted at the latest 6 months after the end of the calendar year to which the application is pertaining.

 

Certain transactions do not entitle for input VAT recovery, including:

 

Input VAT on certain employee expenses?

• Domestic air travel: Yes, if the trip is undertaken in connection with the employer’s business
• International air travel: Not applicable. Expenses incurred on international flights do not incur Austrian VAT.
• Rail travel: Yes, if the trip is undertaken in connection with the employer’s business.
• Taxi fares: Yes, it the trip is undertaken in connection with the employer’s business.
• Car rental: No VAT is deductible for the rental of cars. However, input VAT may be deducted for zero emission cars.
• Fuel: In principle, no VAT may be deducted for the purchase or the operation of cars (except for certain lorries and trucks). Only operation costs of cars without CO2 emissions give rise to input VAT deduction under certain requirements.
• Car parking: In principle, no VAT may be deducted for the operation of cars (except for certain lorries and trucks). Only operation costs of cars without CO2 emissions give rise to input VAT deduction under certain requirements.
• Hotel: Yes, if accommodation relates to the taxable business carried on by an employer.
• Client entertaining: Expenses for client entertaining (Repräsentationsaufwendungen) are non-deductible expenses, if not deductible under ITA/CIT.
• Client meals: Input VAT is fully deductible if expenses are deductible under ITA/CIT.
 

There are formal invoicing requirements regarding the right to deduct Austrian input VAT. If invoices do not meet the requirements or if some indications are not correct, it is possible to amend these invoices in different ways, for example via cancellation and new issuing or via amendment with an additional document and respec­tive reference to the original invoice.

 

An electronic submission of invoices (e.g., via email, computer fax) is generally possible, if the authenticity of the origin, the integrity of the content and the legibility of the invoice are ensured. The authenticity of the origin and the integrity of the content can be guaranteed by an internal control system, by submission of the elec­tro­nic invoice via the corporate service portal or via PEP-POL (Pan-European Public Procurement On-Line), or by using a qualified electronic signature or an electronic data interchange procedure (e.g. EDI).

 

It is possible to operate via self-billing, i.e., the invoice is issued by the customer and not by the supplier, if the supplier and the customer have agreed on this beforehand. A self-billing invoice must contain the same infor­mation as would an invoice issued by the supplier. It must be shown on a self-billed invoice that it is issued by the customer. The self-billing invoice must be sent to the supplier.

 

The term self-billing must not be confused with the term “credit note”. A credit note is issued by the supplier and normally means a retroactive reduction of the price of a good or service. A credit note – as well as invoice amendments – could be issued with the intention to claim back already paid VAT from the tax authority. The credit notes or other documents that amend the original invoices must refer to the original.