Austria implemented a Value Added Tax (VAT) regime within Europe in 1973, which replaced its ‘sales tax’. This is locally called ‘Umsatzeteuer’.
Austrian VAT rules are incorporated in the ‘Value Added Tax Act 1994’. These new rules were sanctioned to implement the European Union (EU) VAT rules for the following year, when Austria joined the EU. This Act is supported by secondary legislation and judicial reviews. Additionally, the Ministry of Finance, which supervises the organisation of the Austrian VAT system, provide regular notices, such as ‘Verodnungen’ and rulings ‘Erlässe’.
The EU sets the VAT Compliance rules, but Austria is still free to set its standard VAT rate. Austria can also levy reduced VAT rates on a limited range of goods for economic reasons. Businesses which are VAT registered in Austria must use these VAT rates when supplying goods and services. They are held liable for any unbilled VAT, if they fail to charge the correct rates. The standard Austrian VAT rate is 20%*.
There are also reduced rate of 13%* for domestic flights; entrance to sporting events; firewood; some agricultural supplies; wine production; cut flowers and plants for decorative use. Also a reduced rate of 10%* for foodstuffs; take-away food; water supplies; pharmaceutical products; domestic transport (excluding flights); international and intra-community road and rail transport; newspapers and periodicals; printed books (excluding e-Books); pay and cable TV; TV licence; social services; domestic refuse collection; treatment of waste water; restaurants (ex all beverages); hotel accommodation; admission to cultural events and amusement parks; cut flowers and plants for food production; some agricultural supplies. With 0%* rate for intra-community and international transport (excluding road and rail).
Austria VAT Law
The laws establishing the VAT are national laws, therefore, all business entities conducting business in Austria have to comply with the Austrian VAT Act and EU Council Directive 2006/112 on the common system of value added tax.
Austrian VAT Registration
With the implementation of the European Single Market initiative in the 1990’s, it became possible to buy and sell goods without a local company – known as non-resident (no permanent establishment) VAT trading. There is no VAT threshold in Austria for the registration of non-resident traders that are VAT/GST/Tax registered in their home state, but you will require one to record transactions and your Austrian customers will want proof that you have obtained one.
For EU VAT registered companies selling goods over the intranet to consumers in Austria, the ‘VAT Registration Threshold’ (Distance Selling) €35.000* per annum.
Austria sets a number of situations where foreign companies should register for VAT. It follows many other of its fellow EU Member States. There are of course strict rules on the situations where a registration is permitted. Common scenarios which require a Austrian VAT registration include:
- Importing goods into Austria from outside the EU – please note there are a number of situations (e.g. onward supply) where the requirements are simplified,
- Intra-community sales (dispatches), or purchases (acquisitions) of goods from additional EU country,
- Buying and selling goods within Austria,
- Goods provided to individuals via the internet, which are subject to Austrian VAT registration threshold,
- Holding goods in warehouses as consignment stock for clients,
- Operating live events and/or shows with paid-for admission on the door,
- A company that is a non-trader, but is receiving services in Austria under the ‘reverse charge’ rule,
- The self-supply of goods.
After the change to the place of supply VAT rules in the EU (2010 VAT Package), there are very few situations where a foreign company must register for VAT if it is providing ONLY services.
Please note that providers of electronic, broadcast or telecoms services to customers in Austria only have to VAT register in the one EU country under the MOSS scheme to file a single return covering all 28* Member States.
What information is required to get an Austrian VAT number and registration?
The Austrian tax office requires the appropriate forms to be completed, and submitted with the following documentation:
- An original specimen signature,
- If appropriate, a VAT certificate to prove the business is registered for VAT elsewhere in the EU,
- Articles of Association,
- An excerpt from the company’s national trade register.
The Austrian Ministry of Finance website makes available the registration forms to download.
Non-resident businesses established in the EU may register directly. However, non-EU foreign businesses must appoint a fiscal representative to register for VAT on their behalf.
Where are Austrian VAT registrations submitted?
Foreign businesses with no fixed establishment in Austria should submit the registration forms to the Graz-Stadt tax office.
If a foreign business has a fixed location in Austria it should register with the local tax office.
What happens next?
Once your business has a VAT number, it can then start trading, and charge Austrian VAT. But it must obey the Austrian VAT compliance rules, and file regular returns (see Austrian VAT Returns below).
Austria VAT Fiscal Representation
For entrepreneurs or businesses providing goods or services in foreign European countries, there may be an obligation to VAT Register as a non-resident VAT trader. With this, under certain situations, the tax authorities needs the company to appoint a Fiscal Representative in the target country. This tax registered company will be the local representative of the company, managing queries and filing obligations of the company for dealings with the tax authorities. They also may be liable for the VAT liability of the company.
When is VAT Fiscal Representation required?
You will find below a summary of the principal situations were a fiscal representative may be required.
Up to 2003 all companies trading across EU borders were obligated to appoint a local Fiscal Representative in each country where they were providing a taxable supply. This condition was simplified by EU VAT Directive 2006/65/EC, which required EU Member States to in its place allow companies to directly register with the appropriate tax authorities.
To this day, there still remain barriers to direct VAT Registration in several countries. These can range from tax offices being unwilling to provide simple clarifications of their compliance requirements and reporting procedures in anything but the local language, e.g. France and Spain; through to still requiring the formal appointment of a local tax agent, e.g. Poland and Bulgaria.
Additionally, if the EU company is importing goods in a number of EU countries, there are cash-flow friendly schemes that include the appointment of a Fiscal Representative.
Approximately more than half of the 28 EU Member States require non-EU businesses to appoint a Fiscal Representative, if they are providing taxable services within their state borders. There are countries such as the UK, Germany and the Czech Republic have now withdrawn the requirement.
Since the responsibility to appoint a Fiscal Representative and possibly provide bank guarantees, can be extremely arduous, many non-EU companies chose to form a company in one EU country, which can then be used as a platform to obtain simplified direct registrations in the rest of the European trade block.
When goods are brought into the EU for the first time, a VAT number will require to be created to clear the goods through customs. Usually, this was done by the final customer. Progressively more, however, the sellers are looking to do this, so that they can keep confidential the cost valuation of the costs, as well as offer a door-to-door service for their customers.
This means that non-resident businesses are more than ever looking to obtain VAT numbers for importation purposes. For non-EU companies, this still requires a Fiscal Representative in most countries.
Whereas EU companies do not usually require a Fiscal Representative, there are a number of beneficial VAT deferral schemes which can save the importer significantly on cash flows. These often require the appointment of a local Fiscal Representative.
The role and liability of the Fiscal Representative
A Fiscal Representative is regarded by the tax authorities as the local agent of the foreign trader. In many cases, the Fiscal Representative is still held jointly and severally accountable for the taxes of the trader. As a result, it is consequently industry practice to require a full bank guarantee in favour of the Fiscal Representative to protect it from losses.
In most countries, the Fiscal Representative is obligated by the local tax code to make certain that:
- The foreign trader is appropriately registered with the local tax office,
- That the trader is fully compliant with rules on invoicing, VAT treatment, exchange rates etc.,
- Accounting records should be maintained to exacting local standards, and that they are readily obtainable for examination by the tax authorities,
- All VAT and associated filings are suitably prepared and submitted,
- All enquiries and tax inspections from the VAT office are professionally handled.
Austrian VAT Returns
Any company registered with the Austrian tax authorities, as a non-resident VAT trader MUST report taxable transactions through periodic filings, known as ‘returns’.
How often are Austrian returns necessary?
Returns in Austria should be filed electronically over the internet.
Businesses in Austria, with an annual turnover that exceeds €100.000* must file monthly returns. Businesses with an annual turnover of between €30.000* and €100.000* it is necessary to submit quarterly VAT returns, an annual VAT return is also mandatory. Those businesses with an annual turnover of less than €30.000* fall under an exclusion scheme, whereby they are excused from charging VAT and making periodic VAT returns.
What Austrian VAT can be deducted?
Additionally, when declaring sales or output VAT in the Austrian return, businesses can offset this by the corresponding input or purchase VAT. There are some exceptions, which include:
- The purchase and lease of cars, motorcycles and other vehicles,
- Also goods and services that are used less than 10% for business purposes.
The deadlines for filing Austrian VAT returns?
Austrian monthly or quarterly VAT returns are due on the 15th of the second month following the period end. The annual Austrian VAT filing, summarising all transactions throughout the year, is due by the 30th June of the following year.
Any Austrian VAT due, must also be paid at the same time.
Austrian VAT penalties
If there are misdeclarations or late filings of Austrian VAT returns, foreign businesses might be subject to penalties. Late filings are subject to a charge of 10%* of the VAT due. If the payment is overdue, there is a further charge of 2%* of the VAT due. There is a five year statute of limitations for Austrian VAT, except for fraud, in which case it is extended to ten years.
How can you recover Austrian VAT credits?
If there is an excess of VAT inputs over outputs (more VAT incurred than charged), then an Austrian VAT credit arises. In principle, this is due back to the VAT registered business. The closing date for making a claim is 30th September (30th June for non-EU businesses) of the following year to which the claim relates. Secondary documentation is not usually necessary, but under certain situations the Austrian tax authorities may request supplementary information, such as original invoices.
Verdicts on refunds may take up to four months, but once the refund has been granted the payment will be made within 10 working days.
Austria VAT Rates
The standard VAT rate in Austria is 20%*; reduced rates are 13%*, 10%* and 0%*. (please refer to the second paragraph of this page)
Supplies of good and services VAT registered in Austria MUST charge the correct VAT rate, and accumulate the tax for onward payment to the Austrian tax authorities through a VAT filing: see ‘Austria VAT Returns’ below.
What is the tax point for Austrian VAT?
The tax point (‘time of supply’) rules in Austria regulate when the VAT is actually due. It is then due to the tax authorities 10 days after the VAT reporting period end (‘monthly’ or ‘quarterly’).
For most ‘goods’, it is the time of delivery, or passage of title. For ‘services’, it is the completion of the actual service.
Austria VAT Compliance
There is a significant burden on Austrian companies to VAT register, to prepare invoices and their books to exact rules. These include:
- Arranging invoices with the revelation details outlined in the Austrian VAT Act,
- The preparation of electronic invoices i.e. ‘e-invoices’ with an appropriate signature, legitimacy and agreement by the recipient,
- Accounts and records to be maintained and MUST be held for at least 7 years,
- Accurate invoicing of customers for goods or services in accordance with the Austrian tax point (‘time of supply’) VAT rules,
- The use of approved foreign currency rates,
- Processing of credit notes and other corrections.
Austrian VAT Invoice Requirements
The Austrian VAT rules on the layout and information to be provided on invoices generally follow the requirements of the EU VAT Directive and its VAT invoice requirements.
The date an invoice should be issued and storage of Austrian invoices
VAT invoices in Austria must be supplied at the latest 6 months after taxable supply. With regards, intra-Community supplies where the reverse charge rule applies, an invoice should be issued with 15 days of the month following the taxable supply.
These invoices must be stored for 7 years. Austria, like all of the EU Member States, now allows the use of electronic invoices under certain conditions.
Invoice requirements in Austria
The following basic information must be on invoices:
- The date the invoice was issued,
- To have a unique, sequential number,
- The VAT number of the supplier,
- The VAT number of the customer (if the supply exceeds €10.000),
- The full address of the supplier and the customer,
- A full description of the goods or services provided,
- The details of quantities of goods, if applicable,
- The date of supply, if different from the invoice date,
- The net, taxable value of the supply,
- The VAT rate(s) applied, and the amount of VAT (the amount of VAT must be stated in EURO,
- The details to support zero VAT- export, reverse charge or intra-community supply,
- The details of any margin schemes applied, for example, works of art, collector’s items and antiques,
- Finally, the total, gross value of the invoice.
Simplified invoices can be issued for amounts less than €400.
Austria – Intrastat
After doing VAT Returns, foreign businesses trading in Austria may also be required to complete statistical reports called ‘Intrastat’, which shows the movement of goods across national borders. This should include both sales to other companies, but also the movement of the goods by the same company.
When should Austrian ‘Intrastat’ reports be completed?
There may be a requirement to complete monthly ‘Intrastat’ reporting, if resident or non-resident companies move goods across the Austrian national border to or from other EU countries.
‘Intrastat’ filings list goods which are sent out of Austrian, called ‘dispatches’, as well as goods brought into Austria, called ‘arrivals’. This system was introduced at the time of the 1993 launch of the EU free trade market, due to customs borders and reporting being withdrawn. ‘Intrastat’ does not relate if the goods are coming in from outside of Europe (‘imports’) or being sent out of the EU (‘exports’).
The Austrian ‘Intrastat’ reporting thresholds are…
‘Intrastat’ returns only require to be concluded once the reporting thresholds are exceeded.
Austrian Instrastat reporting threshold for goods is set at €750.000* (arrivals) and €750.000* (dispatches).
Once a €12million* threshold for ‘arrivals’ or ‘dispatches’ has been exceeded a more detailed ‘Intrastat’ report is required.
What information should be included on a Austrian ‘Intrastat’ filing?
For each movement of goods across the Austrian national border to another EU country must be listed.
The shipment lists should include:
- The trade classification,
- The nature of the transaction,
- The quantity and the value,
- The weight,
- The means of transport,
- The commodity code,
- The country of arrival or dispatch.
When should you file Polish ‘Intrastats’?
Monthly ‘Intrastats’ should be submitted electronically using the website of ‘Statistik Austria’, by the 10th of the month following the movements.
There might be small infringement penalties for late or incorrect filings.
Austria – EC Sales Lists (ECLs)
If an Austrian VAT registered business, resident or non-resident, is selling goods or services to other VAT registered companies within Europe, then an EC Sales List (ESL) return might be required. These are also known as recapitulative statements. This would be in addition to the regular Austrian VAT return or Austrian ‘Intrastat’.
When should Austrian EC Sales List reports be completed?
When an Austrian VAT registered business, resident or non-resident, is selling goods or services to other VAT registered companies in Europe, then an EC Sales List (ESL) return could be required. These are also known as recapitulative statements. This is an additional requirement to an Austrian VAT return or Austrian ‘Intrastat’.
In Austria, ESLs should be filed on the same basis as VAT returns i.e. monthly for businesses with an annual turnover of over €100.000* and quarterly for those businesses with an annual turnover of less than €100.000*, with the filing date being the last day of the month or quarter following the reporting period (monthly/quarterly) end.
ESL filing in Austria are submitted electronically using FinanzOnline. The Penalties for late or incorrect filings follows the same rules as Austrian VAT returns which are late or incorrect.
All of the above information is correct as of October, 2017 and also specifically highlighted with *.