Value Added Tax (VAT) in Austria in 2024

Doing business in Austria requires familiarity with the country’s tax regulations, particularly the Value Added Tax (VAT). Understanding the Austrian VAT system is crucial for any entrepreneur operating in the country. In this article, we will discuss the key aspects related to registration, VAT rates, declarations, and tax refunds.

VAT rates in Austria

Three main VAT rates apply in Austria:

• 20% – the standard VAT rate, applicable to most goods and services.
• 13% – reduced VAT rate, applied to, among other things, tickets for domestic flights, admission to sports and cultural events, amusement parks, purchase of firewood, certain agricultural products, home wine production, cut flowers, and decorative plants.
• 10% – the second reduced VAT rate, covering foodstuffs, take-away food, water supplies, domestic transport, international railway transport, newspapers and magazines, printed books and e-books, paid and cable television broadcasting, social services activities, household waste collection, plants intended for food production, some agricultural products, and the activities of writers and composers.
• 0% – special VAT rate for intra-community and international transport (excluding road/rail transport) and accommodation services and hotel stays.

Austrian Tax Office

Foreign companies from EU countries wishing to register for VAT purposes in Austria must contact the Austrian Tax Office in Graz. This is the central authority responsible for VAT registration for foreign companies. VAT registration for companies with a permanent establishment in Austria is done at the local tax office responsible for the company’s registered office.

VAT registration

When is VAT registration mandatory?

VAT registration in Austria is required in several cases. This applies to both domestic and foreign companies intending to conduct business in Austria. The obligation to register arises, among other things, when:

• Importing goods into Austria from outside the EU.
• Exporting goods from Austria outside the European Union.
• Selling goods in Austria.
• Making intra-community acquisitions of goods (IAC).
• Making intra-community supplies of goods (ICS).
• Storing goods in Austria.
• Providing construction services in Austria.

Registration procedure

To comply with VAT tax laws in Austria, you must obtain a VAT number before commencing taxable activities. VAT registration can take between 50 to 60 days, so it’s advisable to start the process before planned transactions to avoid fines and interest for overdue taxes.

VAT declarations and VAT payment

Frequency of filing declarations in Austria

In Austria, VAT declarations are filed depending on the turnover within the country. The tax office specifies the required frequency (monthly or quarterly) during VAT registration. Quarterly declarations are submitted by the 15th day of the month following the end of the quarter, and monthly declarations are due by the 15th day of the second month after the accounting period.

Annual VAT AT declaration

Every VAT taxpayer in Austria must submit an annual VAT declaration summarizing all transactions made in the fiscal year. The deadline for submitting the annual declaration is:

• April 30 of the following year for paper declarations.
• June 30 of the following year for electronic declarations submitted through the FinanzOnline system.

Ensuring compliance with regulations

How to ensure VAT compliance?

Conducting taxable activities in Austria requires adhering to several key principles:

• Issuing invoices in accordance with Austrian VAT law.
• Keeping transaction records and archiving documents for at least 7 years.
• Using approved exchange rates for transactions in different currencies.
• Promptly responding to tax authority inquiries and providing required documents in case of audits.

Invoice data

A correctly issued invoice should include:

• Seller’s details: name, address, VAT number.
• Buyer’s details: name, address, VAT number.
• Invoice number.
• Date of issue and date of delivery of goods.
• Description of goods/services, quantity/weight.
• Net amount, VAT amount, gross amount.
• Applied VAT rate.
• Annotations on VAT exemptions or reverse charge if applicable.
• Currency in which the invoice was issued.

VAT refund in Austria

EU-based companies without a permanent establishment in Austria can apply for VAT refunds for purchases made in Austria. Applications must be submitted electronically through the FinanzOnline portal by September 30 of the following year in which the costs were incurred. The minimum refund amount is 400 euros for periods shorter than a year and 50 euros for annual settlements.

Non-EU companies can apply for VAT refunds if they have no establishment or turnover in Austria. Applications are submitted electronically through the FinanzOnline portal within six months from the end of the calendar year in which the right to a refund arose.

Reverse charge in Austria

The VAT reverse charge mechanism in Austria shifts the responsibility for paying VAT from the supplier to the recipient of goods or services. This means that the recipient pays VAT to the tax office. This system mainly applies to foreign companies providing services such as construction, advisory, legal, licensing, telecommunications, and electronic services. Reverse charge is also applied to the supply of certain goods, such as precious metals. Details and a full list of services covered by this system are available on the Austrian tax office’s website.

Tax penalties

Failure to comply with tax obligations can result in penalties. A penalty of 2% of the amount of the tax due is imposed for late VAT payment. Failure to submit a declaration on time results in a penalty of 10% of the amount of the tax due.

Intrastat in Austria

In addition to filing VAT declarations, foreign companies operating in Austria may be required to report statistical data through Intrastat. Intrastat reports contain information on the import and export of goods between EU countries and the movement of own goods to warehouses in other member states.

The reporting thresholds for Intrastat in Austria are €1,100,000 annually for both imports and exports. There are also detailed thresholds of €12 million. Monthly Intrastat reports must be submitted by the 10th day of the month following the reporting period. Failure to submit the report on time may result in administrative penalties, so it’s important for companies to monitor their transactions and report them in accordance with requirements.

Summary

In summary, the Austrian VAT system is complex and requires entrepreneurs to be familiar with many regulations. Understanding and adhering to these regulations are essential for conducting business in Austria in compliance with the law. It’s also advisable to seek assistance from specialists to avoid problems with tax authorities.

For any questions or additional information, we encourage you to contact our team of experts, ready to provide assistance and support: Contact us – amavat®.