VAT Rates in Austria

VAT Rates by goods and services in Austria

The standard VAT rate is 20% (19% in the regions of Jungholz, Mittelberg). The standard VAT rate generally applies for all goods and services for which no exemption, 0% or one of the reduced VAT rates is foreseen.

The first reduced VAT rate is 13%. This reduced rate applies to tickets to sport and cultural events, domestic flights, pet food, artists' services or products, among others.

In addition, there is a reduced VAT rate of 10%. This reduced rate applies to most food products, books, hotel accommodations, rentals for residential purposes, newspapers books and magazines, restaurants, passenger transport, pharmaceuticals, repair of certain products, among others.

Supplies and services at 0% are the standard supplies, such as exports or intra-Community supplies.

Finally, some supplies are VAT exempt, such as health services and financial services, among others.

To confirm the VAT rate applicable to your product or service in Austria, we recommend that you contact us.

VAT Deduction Limits in Austria

Generally, Austrian VAT can be deducted as long as it is incurred for business purposes and all formalities are met.

The following deduction rules apply:

• Input VAT for the purchase, lease, repair, and fuel for vans and trucks, and certain cars used for business purposes and without CO2 emissions, is 100% deductible.
• Input VAT for hotel accommodation is 100% deductible.
• Entertainment costs for business partners, including restaurant, when related to marketing purposes is 100% deductible.
• Input VAT on training, conferences, fairs and exhibitions usually is 100% deductible.
• Input VAT for books is 100% deductible.
• Input VAT for mobile phone expenses is 100% deductible.
• Input VAT for business gifts when allowed for direct tax purposes.
• Input VAT for taxis and other travel expenses is 100% deductible.

Find here official information about input VAT deduction.

Austrian tax authorities encourage to only accept invoices that contain both 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. This way, you will be on the safe side when deducting input VAT. Check the Austrian authorities' website for more information here & here about invoicing obligations when deducting VAT.

Tax Point Rules in Austria

The tax point is the time when VAT becomes due in a transaction.

• General rule: Tax point arises when the goods are at the customer’s disposal or when the service is completed. This is also known in the local language as Sollbesteuerung or Besteuerung nach vereinbarten Entgelten. However, there are a few exceptions to this general rule. More specifically, when the total price is paid prior to those moments or if the cash accounting scheme applies.
• Prepayments: In case of prepayments or advance payments, of all or part of the agreed price, the tax point is shifted to the end of the calendar month in when receiving the prepayment. VAT is due at the end of the VAT return period in which the payment was received.
• Cash accounting scheme: this is also known as Istbesteuerung or Besteuerung nach vereinnahmten Entgelten in the local language. Under this regime, the tax is due when the payment is received.
• Continuous supply of services: Austria has specific provisions for certain continuous supplies for which the tax point is shifted to the moment when the invoice is issued or when the payment is received. The supplies subject to this rule are: supplies on subscriptions, maintenance or servicing contracts, trade with intellectual property, supplies by intermediaries, schools subject to VAT, continuous supplies paid in a lump sum and supplies of telecommunication services.
• Intra-Community transactions: VAT is due when issuing the invoice and no later than the 15th of the month following the physical dispatch or arrival of the goods.
• Import: Tax point arises when the goods are released for free EU circulation (customs cleared or outside the customs suspension regime).

Finally, special rules apply to vouchers, instruments for which there is an obligation to accept them as consideration for a supply of goods or services. There are two types of vouchers: “single-purpose vouchers” (SPV) and “multi-purpose vouchers” (MPV). For SPV, the place of supply of the goods or services to which the voucher relates and the VAT due on those goods or services are known when the voucher is issued, and the tax point arises on the transfer of the SPV. This is, when the SPV is used as a means of payment, the supply of goods is made, and/or services are completed when an SPV is transferred. A MPV is a voucher other than a single-purpose voucher. A transfer of an MPV should be considered outside the scope of VAT, while the supply of goods or services in return for a MPV is regarded as a supply subject to VAT. For example, gift cards are considered as prepayments if they specify the product included subject to the supply (SPV). However, in case the gift card is issued for an unspecified product (e.g., all products in a certain store), the transfer of this gift card (MPV) is not considered as a prepayment, and it is not subject to VAT. The transaction subject to VAT will arise when the gift card is finally used.

VAT due should be distinguished from VAT payable. VAT is due when the tax point occurs. VAT is payable between the day after the end of the reporting period and the due date to submit and pay the VAT return. Learn more.

Use and enjoyment rule

Use and enjoyment rules can deviate the place of supply rules according to the country where the service is effectively consumed.

When applying the use and enjoyment rules, if the service is taxed in the EU, the non-EU supplier may have to register for VAT in Austria.

We refer to negative use and enjoyment rules when the provision is intended to avoid non-taxation. We refer to positive use and enjoyment rules when intended to avoid double-taxation. Austria introduced both, positive and negative provisions.

According to the negative use and enjoyment rule, the place of supply is deemed to be Austria instead of the non-EU country for the following:

• Telecommunications, radio and TV broadcasting services
• Leasing of movable property, except for means of transport
• Services related to sports betting and gambling
• Certain services supplied to public entities not considered as companies.

According to the positive use and enjoyment rule, the place of supply is deemed to be outside Austria if:

• Renting means of transport when they are used in the non-EU country
• Supply of employees working in a non-EU country.

Learn more about VAT use and enjoyment rules

Statute of limitations

The statute of limitations is the period in which the authorities can go back to investigate a tax liability. This is normally the same period in which a taxpayer can go back to request a tax credit.

The statute of limitations in Austria is five years. This means that both the taxpayer and the tax authorities can request the review of previous reporting periods up to five years prior to the current year. However, in case of tax evasion, the tax authorities can go back up until ten years.

Similarly, the time limit for taxpayers to request a tax credit is five years in Austria.

You can find an overview of the statute of limitations in Europe under the following link.

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.