VAT registrations and simplifications in Austria
When do I need an Austrian VAT number?
Generally, a foreign business must register for VAT in Austria as soon as a taxable supply is made. The following are the typical examples of taxable transactions:
- Domestic supply of goods not reverse charged: A supply of goods located in Austria where the supply is not subject to reverse charge requires a VAT registration of the supplier.
- Supply of services not reverse charged: Foreign businesses supplying services on which Austrian VAT is due must register for VAT. These services are exceptional, as the general B2B rule applies.
- Export: Exporting goods to non-EU countries requires a VAT number before the export is made.
- Intra-Community acquisition: Acquiring goods from another Member State where all conditions for intra-Community movements are met requires the customer to register for VAT.
- Intra-Community supply: Supplying goods from another Member State is also a taxable transaction that obliges the supplier to register for VAT.
- Distance sales: When applicable in case the Seller has not joined OSS. See the E-commerce manual for more information.
A backdated registration is possible in Austria. Such backdated registration is required when a business applies for an Austrian VAT number late. In this case, all missed VAT returns are due, and, if applicable, all corresponding VAT payments should be made.
There is no registration threshold for foreign non-established companies in Austria. For these businesses, registration is required before the first taxable transaction is made in Austria. Small established companies can avoid a VAT registration if the annual turnover is below the exemption threshold of EUR 35,000: when under the registration threshold, Austrian small businesses do not have to charge VAT and therefore do not have to pay sales tax to the tax office; also, there is no input tax deduction.
Established small businesses can voluntarily register for VAT purposes in Austria and start charging VAT in their sales, even if the total turnover is below the registration threshold.
Check here for more information about the exemption threshold for small established businesses in Austria.
Input VAT incurred before the VAT registration may be deductible concerning purchases of goods or services directly related to the economic activity (not for private use). In case a foreign business is willing to deduct VAT incurred while not VAT registered, normally , a retroactive VAT registration is required. Careful because it is only possible to reclaim the VAT in the year in which it was incurred. In case no taxable transactions occurred during the year on which input VAT was incurred by the foreign business, such VAT shall be recovered via the EU VAT refund mechanism or 13th Directive.
A limited VAT registration does not exist in Austria. Such registration refers to obtaining identification purposes and obligations outside VAT returns (e.g. Submitting ESL and Intrastat returns). Austrian VAT registration always implies submitting VAT returns, irrespective of the transaction flow performed by the taxpayer
Find here more information about the Austrian VAT numbers and VAT registration forms.
Fiscal representative requirements in Austria
Non-EU businesses must appoint a fiscal representative when registering for VAT purposes in Austria. The tax representative must be established in Austria.
EU businesses can register directly for VAT purposes in Austria. This means that the company’s legal representative can sign the registration form without any local Austrian involvement.
A fiscal representative or customs agent may also be required when performing certain customs-related transactions.
VAT groups in Austria
Where more than one taxable persons are closely bound by financial, economic, and organisational links, these companies are automatically considered as part of a VAT group and are treated as a single taxable person for VAT purposes in Austria. A VAT group implies a company and one or more controlled entities. VAT groups are also known as Organschaft controlling in the local language.
As regards the VAT group conditions, financial links exist when the same person or business directly or indirectly holds more than 75% of the shares of a member – from 50% to 75% of shares ownership it might be considered to meet the VAT group criteria depending on the rest of conditions. Organisational links exist when the management of the controlled entities is entirely dependent on the controlling entity. Economic ties exist where the activity of the controlled entities.
In addition, the following VAT grouping rules apply in Austria:
- Foreign companies may be considered as part of an Austrian VAT group, but only for the part of the business that is developed in Austria.
- VAT grouping is mandatory in Austria.
- The VAT group is formed immediately if the conditions are met.
- VAT groups submit a single VAT return, and only the controlling entity is registered at the tax office for VAT purposes.
- Intra-group transactions are disregarded for VAT purposes. Still, they must keep records of these transactions.
- Every group member is jointly and severally liable for the VAT debts and penalties of the entire group.
- There is no minimum period for a VAT group in Austria. It depends exclusively on whether the conditions are met or not.
Consignment and Call-off stock in Austria
The EU introduced an EU wide simplification for call-off stock scenarios that all EU Member States must implement. This simplification allows businesses to operate under a consignment stock structure without having to VAT register in the destination country. Austria has implemented this simplification.
Austrian Bad Debt Relief
Bad debt relief is available in Austria.
When a customer has not paid an invoice on which VAT has been accounted by the supplier in its VAT return, and this debt is not recoverable, this is considered a bad debt. Taxpayers may recover the VAT amount from bad debt.
In Austria, it is necessary that a court decides on a case-by-case basis that the debt is not recoverable. The insolvency of the debtor, or when the debtor’s assets do not cover the outstanding debt are usual cases where the debt is considered non recoverable.
When the debt is considered non recoverable, the supplier may adjust the output VAT on the VAT return. The supplier does not need to issue corrective invoices, or inform the customer; however, the supplier’s tax office must inform the customer’s tax office about this adjustment, so they ensure that the input VAT linked to the same transaction is also adjusted.
Have a look at our article about bad debt relief here.
Austrian Import Deferral and Postponed VAT Accounting
Normally, companies must pay import VAT together with customs duties upon importation to the Customs authorities in Austria.
However, Austria has introduced the postponed import VAT accounting mechanism. When the importer is VAT registered in Austria, the payment of import VAT may be postponed and paid to the tax authorities via the VAT return. This simplification is optional in Austria. Taxpayers making imports must report as payable and deductible the import VAT in the same reporting period. The reporting period must correspond to the same accounting period during which Customs issued a customs bill or customs receipt. The following conditions apply:
- Customs declaration containing import VAT
- The importer is a company registered for VAT in Austria
- The company imports goods for its own business
- The company opts within the customs declaration form for postponed accounting of import VAT.
Austria has not implemented the import VAT deferral.
Find here the official information about import VAT and postponement of import VAT.
Austrian Customs warehouse and VAT warehouses
Customs or bonded warehouses are available for goods that have not cleared customs in the EU (T1). VAT and excise duties are not due when these goods are directly placed in the Customs warehouse. As soon as they exit this regime, these amounts are due. Sales within the customs warehouse are zero-rated.
Find here the official information about customs warehouse.
VAT warehouses are available for cleared goods (T2). These goods have already paid customs duties. The conditions are similar to those of Customs warehouses. The goods allowed are those included in Appendix V of the VAT Directive. In addition, the following goods may also be subject to this suspension regime: certain wood items, gold, iron and steel product and non-ferrous metal.
Special VAT Schemes in Austria
Cash accounting scheme in Austria
Check our dedicated article Cash accounting scheme in VAT, How it works?
- The cash accounting regime in Austria is also known in the local language as Istbesteuerung and "Besteuerung nach vereinnahmten Entgelten"
- The cash accounting regime is available in Austria for:
- Farmers and foresters who are not required to keep accounts.
- Freelancers (regardless of the amount of their turnover and the legal form).
- Energy generation and waste disposal companies and
- All other businesses when the total turnover does not exceed EUR 110,000 in the past two years.
TOMs or travel agencies regime
Check our dedicated article about TOMS.
If conditions are met, travel companies may have to charge VAT on their profit margin taxation concerning journeys within the European Union. The taxable margin is the difference between the total amount paid by the traveler or customer (VAT excluded) and the actual costs for goods and services that benefit the traveler directly, and that were purchased from other taxable persons by the travel company. The margin is subject to VAT at the standard rate.
- Austria applies the travel agencies regime for both B2B and B2C transactions.
- Supplier must be established in Austria.
- To understand the supply is a travel service, the supplier must provide a package of several individual services including transport or accommodation. However, in case it is the accommodation service what is provided by the organizer supplier, it is possible to apply the travel scheme on that supply.
- Supplier must keep records of transactions performed, containing the amount payable by the customer and the amounts payable to the service providers.
- When the service is directly provided by the supplier, this is not subject to the special regime.