Austrian VAT Rate Changes 2026

VAT Rate Changes 2026

As part of its 2025–2029 Fiscal Structural Plan, the Austrian Government has confirmed theintroduction of a VAT exemption for feminine hygiene products and contraceptives, within a broader package of measures in the areas of health andsocial affairs. According to the published plan, the exemption will enter into force on 1 January 2026.

The VAT exemption will apply to feminine hygiene products and contraceptives, with the aim of reducing the tax burden on essential goods and improving access to reproductive health. While both the introduction of the exemption and its effective date have been confirmed, further implementing legislation will be required to define the exact list of products covered, as well as the operational and invoicing requirements applicable to businesses.

From 1 January 2026, businesses operating in Austria and supplying these products will need to adapt their VAT processes accordingly. This includes the correct application of the VAT-exempt rate, updates to invoicing and ERP systems, and accurate VAT reporting in periodic VAT returns. These changes will be particularly relevant for eCommerce sellers, international distributors and multinational groups with VAT obligations in Austria.

An overviewof all VAT rates applicable in Austria is available in our VAT manual.

The VAT exemption forms part of the Budget Accompanying Act 2025 (Budgetbegleitgesetz2025), which was officially published in the Austrian Official Gazette on 30June 2025 (BGBl. I 25/2025). Take a look at the official legislative document.

2018 VAT Rate Changes on Accommodation Services

These services were previously taxed at 13%, which is a second reduced rate in Austria. The standard Austrian VAT rate is 20%.

These changes are important for all companies currently automating their VAT recovery of employee expenses. Their system must be updated to make sure it reflects the updated VAT rate.

Most European countries apply a reduced rate on accommodation services. Only Denmark, Slovakia and United Kingdom apply the standard VAT rate on these services. There is a long-standing debate about the applicable VAT rate on accommodation services. Reducing rates improves unemployment rates because tourism is a labour-intensive industry, however, several scholars point out that this is only a temporary measure that would not work in the long-term.