1. VAT in Europe
3. VAT in Austria
5. Reverse Charge in Austria

Reverse Charge in Austria

Reverse charge for non-established companies in Austria

According to art 194 of the VAT Directive, Member States may implement an optional reverse charge on domestic supplies made by non-established businesses. Austria has introduced this optional reverse charge for certain domestic supplies of services.

Domestic reverse charge applies when a non-established company supplies services to a taxable or legal person in Austria. The exceptions to this general rule are i) admission fees to events and ii) the use of toll roads.

• Supplier requirements
  Foreign supplier is a taxable person without a permanent establishment in Austria, or with a fixed establishment in Austria that does not intervene in the concerned transaction.
• Customer requirements
  Taxable or legal person VAT registered in Austria.
• Scope
  Supplies of services (except for admission to events fee and use of toll road)

Therefore, in case the customer does not have a VAT number Austria, the reverse charge does not apply.

Also, domestic reverse charge applies when a non-established company makes the following specific supplies to a VAT registered company in Austria:

• gas through a natural gas system or
• electricity
• heat or cooling energy through heating and cooling networks.

• Supplier requirements
  Foreign supplier is a taxable person without a permanent establishment in Austria, or with a fixed establishment in Austria that does not intervene in the concerned transaction
• Customer requirements
  Taxable or legal person VAT registered in Austria.
• Scope
  Supplies of gas, electricity and heat and cooling energy.

In case the customer does not have a VAT number Austria, the reverse charge does not apply.

Find here the official information about reverse charge in Austria published by the tax authorities.

VAT withholding regime applies for the supplies made by foreign companies where the reverse charge mechanism does not apply, for example, in the supplies of goods, the supply is subject to the special VAT withholding regime, except for admission to events fee. Find here the official information about the VAT withholding regime in Austria published by the tax authorities.

Reverse charge on B2B Services in Austria

Article 196 of the VAT Directive requires the reverse charge mechanism on all services subject to the B2B rule introduced in art. 44 of the same Directive. The B2B rule locates the transaction where the business customer is located. In case the customer is a private individual, B2C rules locate the transaction where the supplier is located.

According to the general B2B rule, any business not established in Austria supplying services to an Austrian registered customer will not charge any VAT and the transaction will be reverse charged by the customer.

There are however a number of exceptions to this rule. Where these exceptions apply, reverse charge may still be applicable in Austria:

• Services connected to immoveable property are located where the property is located.
• Passenger transport services will be located where the transport takes places (apportioned if necessary).
• Catering services are located where the catering takes place.
• Short term leasing of means of transport are located where the vehicle put at the disposal of the customer.
• Access to conferences, fairs and exhibitions is located where the event takes place.
• Austrian reverse charge on specific goods and services

Austrian reverse charge on specific goods and services

Domestic reverse charge may also apply to certain goods and services under different conditions. This regime is often introduced on products that are more likely to be used for VAT fraud purposes.

Austrian domestic reverse charge applies to the following list of supplies:

• Construction services and subcontractor’s construction services. Construction services include manufacture, repair, maintenance, cleaning, modification or removal of buildings. This also applies to the leasing of workers if the workers provided carry out construction work.
• Goods provided as security by one taxable person to another in execution of that security, the supply of goods following the cession of the reservation of ownership to an assignee and the exercise of this right by the assignee and the supply of immovable property in the course of the judicial sale.
• Used material, scrap, industrial and non-industrial waste, recyclable waste, etc., and scrap gold.
• Greenhouse gas emission certificates
• Mobile communication devices, video consoles, notebooks, tablet PCs and certain electronic integrated circuits if the amount is at least EUR 5,000.
• Certain metals, and investment gold.

You can find here the official information about reverse charge on specific goods and services published in the tax authorities’ website.