EU VAT Guide – Austria

How much is VAT in Austria? 

The Standard VAT Rate(Umsatzsteuer (UST)) in Austria is 20%.

Some supplies are exempt from VAT. This applies to business activities like education, health care, postal and financial services.

VAT threshold in Austria

Austrian VAT legislation contains valuable information about VAT thresholds. Tax Authority officials’ interpretations of the applicable provisions are also helpful information regarding establishing mechanisms to remain VAT compliant in the country. 

VAT registration threshold for resident businesses: There is a VAT registration threshold of EUR 35,000 for small businesses. 

VAT registration threshold for non-resident businesses: No registration threshold.

VAT registration threshold for intra-EU distance sales of goods and B2C supplies of services: EU-wide harmonized threshold of EUR 10,000.

VAT registration threshold for non-EU established suppliers of Electronically Supplied Services: No registration threshold.

VAT Taxable Activities in Austria

Economic operators who make supplies of goods and services in Austria for consideration as part of their regular business activities are subject to Austria VAT. 

From a VAT perspective, these operators are taxable and should register for tax. Here, we can find natural persons conducting professional activities, legal persons, and entities without legal status.

Types of taxable activities that trigger the imposition of VAT: 

• The supply of goods and rendering of services in  Austria for consideration
• Import of goods 
• Intra-community acquisition of goods for consideration
• Export to non-EU countries

There are also other case scenarios where domestic or foreign businesses should impose Austria VAT on their transactions. 

Tax Representative in Austria

In most cases, having a fiscal representative established in Austria for the VAT compliance duties of non-EU-established businesses is mandatory. 

As regards non-resident businesses, which have residency or place of establishment in the Community, there is no obligation to acquire the services of a fiscal representative. 

Still, the economic operator could acquire the professional to ease up and streamline compliance challenges for its operations in the country. 

VAT on Electronically Supplied Services Austria

Electronically Supplied Services 

Under the EU VAT Directive 2006/112/EC guidelines, services provided electronically are defined as those distributed over the Internet or through other digital networks. These services are typically characterized by automated processes requiring little to no human input or control. Their successful delivery heavily relies on the progress of digital technology, which facilitates their smooth operation.

Following the EU’s regulations, Austria has incorporated this uniform definition of Electronically Supplied Services into its own laws.

Considering various global discussions, terms like digital services, digital products, and electronic services are often used interchangeably. Fundamentally, these expressions broadly cover the concept and extent of services supplied electronically, as specified by the EU VAT Directive, especially in the context of tax obligations.

Taxability Rules for ESS

B2B supply of electronically supplied services – The general place of supply rules should be applied.

B2C supply of electronically supplied services – Foreign companies must adhere to VAT rules set by the EU, tailored for these scenarios. Specifically, the VAT should be applied based on the VAT rate in the customer’s country of residence.

Place of supply rules for distance sales of goods and B2C ESS supply of services – If a supplier’s yearly revenue is below EUR 10,000, they can either operate in alignment with the domestic VAT rules or opt for the One-Stop Shop (OSS) scheme.

Place of supply rules for distance sales of goods and B2C ESS supply of service -Where the seller’s annual income exceeds EUR 10,000, they should apply the VAT rate from the country where the goods are sent or where the service recipient resides.

How much is VAT in Austria for Electronically Supplied Services? 

Austria VAT Rate: A standard VAT rate of 20% is applied in most cases on sales of Electronically Supplied Services 

For some types of digital products, there is a possibility that a reduced VAT rate Austria will be levied. 

E-Commerce VAT Rules in Austria

Introduced on July 1, 2021, the E-Commerce Directive has become an integral part of national VAT regulations of Member States. 

This legislative package was crafted to reduce administrative complexities and standardize regulations, with the final aim of establishing unified rules for the e-commerce sector.

These regulatory changes highlight the broadened scope of transactions that now fall under the EU’s unified VAT rules for e-commerce. 

The modified VAT provisions related to e-commerce rules specifically address several types of transactions:

• Distance sales of low-value goods, not exceeding EUR 150 in value, imported from non-EU countries or territories are now streamlined under the new VAT framework, except for products subject to excise taxes;
• Cross-border (intra-community) distance sales of goods by suppliers, including those considered as suppliers, highlighting the EU’s effort to simplify the tax reporting process for goods moving within its borders;
• Local (domestic) sales conducted by entities regarded as deemed suppliers underscore the commitment to treat digital and physical goods sales with parity under VAT rules;
• The provision of B2C services by businesses either based outside the EU or in a different EU member state than the consumer. This adjustment ensures that services are taxed appropriately, promoting fairness and reducing competitive disparities.

Moreover, the E-Commerce package modifies the previously established VAT special schemes, including refining existing frameworks and introducing the Import One Stop Shop (IOSS). 

The E-Commerce VAT package made the following special schemes available:

• Union One-Stop-Shop Scheme;

• Non-Union One-Stop-Scheme;

• Import One-Stop-Shop Scheme.

Overview of EU VAT Special Schemes 

The Non-Union Scheme can be used by:

Non-EU established businesses and those without fixed establishment in the EU. 

The Non-Union Scheme covers B2C supplies of all services only where the place of supply is within an EU Member State. If the merchant opts for this scheme, it is obliged to report all transactions that are an integral part of the scheme using exclusively this reporting channel. 

The Union Scheme can be used by:

Taxable persons established in the EU for reporting the B2C supply of services and intra-community distance sales of goods. 

Taxable person not established in the EU for intra-community distance sales of goods 

Electronic Interface established or not established in the EU for intra-community distance sales of goods and certain domestic supplies of goods

Import Scheme can be used by:

Any taxable person who carries out distance sales of goods imported from third countries or third territories in consignments not exceeding the threshold of EUR 150 sold to end customers residing in Member State. 

Taxable persons established in the EU, taxable persons non-established in the EU, and electronic marketplaces are eligible to use this type of special scheme. 

OSS Return and Payment 

Austria currently does not have a streamlined process for foreign businesses providing digital services or involved in the distance selling of goods to register for VAT purposes. This lack of a simplified system means international companies must navigate the existing regulations to meet their VAT Austria obligations.

Foreign entities can leverage the usage of the OSS schemes to comply with some, if not all, VAT liabilities where Austria is the country of supply.

However, it’s important to note that the eligibility for the benefits offered by the OSS schemes is limited to those transactions that involve goods or services listed under the E-Commerce regulations. Only when a non-resident company deals with these specific types of goods and services can it take advantage of the OSS schemes’ simplified VAT handling mechanisms.

When non-resident businesses supply goods or services that fall outside the designated E-Commerce list or if other criteria do not align with the OSS eligibility requirements, the company is required to adhere to the Austrian VAT registration procedure

A foreign company that chooses or must follow the procedure for domestic VAT registration should be familiar with all the VAT-related implications.

Electronic Platform and Deemed Supplier Rules 

Austria introduced into its national legislation the deemed supplier provision as per the EU VAT directive. However, compared to other Member States, Austrian regulators went even further and implemented additional requirements for platform operators. 

What it means, deemed supplier per Austrian legislation: 

• If a platform operator intermediates in the supply of goods between a merchant and end customer, the platform operator could be treated as a deemed supplier;
• This rule applies to products imported outside the EU (third countries or territories) that cost less than EUR 150 and are sold directly to EU residents;
• It also applies when the products are already in the EU, and the sellers aren’t established in the Member State, no matter what the price of the good.

What the concept of deemed supplier changes from the perspective of liability and reporting:

• The law sees the sale as happening in two steps: First, the product is sold from the original seller to the online platform (like a business-to-business sale). Second, the platform sells it to the final buyer (like a business-to-consumer sale);
• Online platforms have to keep detailed VAT records just like any other business. This helps them show they follow the rules if there’s an audit.

For online platforms using simplified schemes:

• The same rules about keeping records apply to them, too.

Invoice Requirements in Austria

General invoice information:

• Date of Invoice issuance;
• Invoice number;
• Sequential Invoice Number;
• The date on which the goods are delivered or services are performed is different from the invoice issuance date

Seller information:

• Business name;
• Full address;
• VAT number.

Buyer Information:

• Business name;
• Full address;
• VAT number if the buyer is a legal person.

Fiscal Information:

• Description and breakdown of the goods or services – quantity, discounts, unit price, excl. VAT;
• For advance payment: the date of payment if it differs from the invoice date;
• Taxable amount;
• The VAT rate(s) applied and the breakdown of VAT per rate;
• Invoice Total.

Additional information required in particular cases:

• Exemption reference – guaranteed by precise norm;
• Reverse charge – description;
• Intra-community supply of goods;
• Tax Representative information;
• If the invoice is issued in foreign currency, the VAT amount must be converted into euros.

Foreign Currency Invoice Austria

In Austria, it’s permissible to issue tax invoices in foreign currencies, but the requirements dictate that the total VAT amount should be indicated in EUR, as well as exchange rate and conversion details in both cases. It’s advisable to indicate the invoice total in euros as well. 

This regulation ensures that the sales tax amount paid corresponds to the deductible input tax.

VAT Returns in Austria 

Domestic VAT returns 

Taxpayers registered for VAT Austria should submit tax returns monthly or quarterly, depending on the turnover made in the previous year. The deadline for submitting and paying advance sales tax returns is the 15th of the second month following the reporting period.

Along with this requirement, the mandated taxpayers should prepare and submit yearly sales tax returns by April 30th or, if submitted electronically via FinanzOnline, by June 30th of the following year. 

Penalties for late reporting and omitted declarations

Taxpayers must unequivocally charge Austrian VAT on their transactions and submit the VAT return. If they do the return fillings after the deadline, they can expect to allocate more funds than they would if they had filled the return within the permitted time frame.  

When taxpayers don’t comply with the VAT rules in  Austria, the responsible tax authority can impose a fine for non-compliance. 

The type of additional expense, its amount, and how it is processed depends mainly on the following parameters regarding the return submission.

 Late submission can lead to a payment surcharge of up to 10%. Furthermore, a late payment surcharge of 2% (for qualified delays up to a maximum of 4%) of the amount paid late will be charged. The late payment or late payment surcharge is not imposed if it amounts to a maximum of EUR 50.

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