Austria VAT Rate and Compliance 2023
With a variety of VAT rates, registration and compliance requirements, as well as specific rules governing electronic services and marketplace operators, it’s crucial to stay informed and compliant when doing business in Austria. In this post, we’ll explore the Austrian VAT landscape, and provide valuable insights to help you navigate the world of VAT and remain compliant with Austrian tax authorities.
- Understand Austrian VAT rates and their applicability to different goods & services.
- Adhere to registration, compliance, recordkeeping & invoicing requirements for successful business operations in Austria.
- Be aware of penalties imposed by tax authorities for non-compliance with VAT rules.
Understanding Austrian VAT rates
Austria follows the European Union's VAT directive and has a standard VAT rate of 20%. However, the Austrian VAT system also includes reduced and zero rates for specific goods and services. Let's take a closer look at these rates:
Standard Rate (20%)
The standard VAT rate in Austria is 20%. This rate applies to most goods and services that are not eligible for reduced or zero rates. Businesses selling products and services subject to the standard rate must charge their customers 20% VAT and remit it to the tax authorities.
Reduced Rates (10% and 13%)
Austria applies a reduced VAT rate of 10% and 13% to certain categories of goods and services:
10% VAT: This reduced rate is applicable to items such as food, non-alcoholic beverages, restaurant and catering services, newspapers, books, and e-books.
13% VAT: The 13% reduced rate applies to goods and services like food, admission to sporting and cultural events, wine production, and agricultural supplies.
Businesses need to be aware of these reduced rates and apply them correctly to their transactions to ensure compliance with Austrian VAT laws.
Zero Rate (0%)
Zero-rated supplies are subject to a VAT rate of 0%. This means that businesses do not charge VAT on these supplies, but they are still entitled to claim VAT refunds on their input costs. Zero-rated supplies typically include exports of goods and certain international services.
Exempt supplies are not liable to VAT, meaning that no VAT is charged on these supplies, and no input VAT can be reclaimed. Examples of exempt supplies in Austria include health and financial services.
VAT registration and compliance in Austria
Businesses that exceed the annual VAT registration threshold must register for VAT in Austria. The threshold is €30,000 in annual turnover for domestic transactions and €10,000 in annual turnover for distance selling. However, thresholds may change, so it's essential to verify the current threshold with the Austrian tax authorities.
Once registered, businesses are assigned a VAT identification number (UID) that must be included on all invoices issued.
Obtaining an Austrian VAT number
To register, gather all the necessary documentation, including proof of business registration, identification, and financial information. You must submit your application to the Austrian tax authorities, either online or using a physical form. Once your application is processed and approved, you will receive your VAT number, allowing you to collect and remit VAT on your taxable transactions in Austria.
It's essential to comply with Austrian VAT regulations and keep accurate records for tax reporting purposes. Specific requirements and procedures may vary, so consulting with a tax advisor or visiting the Austrian tax authorities' website for the most up-to-date information is advisable.
Filing VAT returns
Filing VAT returns in Austria requires businesses to adhere to specific deadlines and reporting periods. VAT returns in Austria have different reporting periods, including:
- Monthly VAT returns, due on the 15th of the second month following the period end.
- Quarterly VAT returns, due on the 15th of the second month following the period end.
- Annual VAT return, summarizing all transactions throughout the year, due by 30th June of the subsequent year.
VAT returns should be filed electronically via the Austrian FinanzOnline portal.
To maintain VAT compliance and avert potential penalties, businesses must stay up-to-date with these filing requirements and deadlines.
Recordkeeping and invoicing requirements
Proper invoicing is crucial for VAT compliance in Austria. VAT invoices must contain specific information, including:
- The word "Rechnung" (invoice) prominently displayed
- The seller's and buyer's (if applicable) VAT numbers
- Date of issue
- A unique invoice number
- Description of goods or services provided
- Quantity and unit price
- VAT rate applied
- Total amount due, including VAT
- Currency used
Invoices and related documents must be retained for a duration of seven years, while invoices associated with property must be kept for ten years. Records can be kept outside of Austria but must remain readily available. VAT records in Austria can be kept in electronic and hard copy formats.
Maintaining accurate and comprehensive VAT-related records for the requisite retention periods is vital for businesses. Adhering to these recordkeeping and invoicing requirements helps businesses remain compliant with Austrian tax authorities and minimize the risk of penalties and enforcement actions.
Austrian VAT rules for electronic services
In the era of digitalization, the provision of electronic services has become increasingly relevant for businesses. Specific Austrian VAT rules are applicable to Business-to-Consumer (B2C) and Business-to-Business (B2B) electronically supplied services.
B2C electronically supplied services
For B2C electronically supplied services, Austria follows the EU VAT rules, with a threshold of €10,000 for charging VAT where the seller is based. Examples of B2C electronically supplied services subject to VAT in Austria include:
- Digital downloads of music, movies, and e-books
- Online gaming and gambling services
- Online courses and educational services
- Streaming services for movies, TV shows, and music
- Software and mobile app downloads
- Web hosting and cloud storage services
Businesses providing B2C electronically supplied services must be aware of this threshold and adhere to the applicable VAT rules and rates.
B2B electronically supplied services
B2B electronically supplied services in Austria are subject to the reverse charge mechanism, which transfers the responsibility for reporting the VAT transaction from the supplier to the recipient of the goods. Examples of B2B electronically supplied services subject to VAT in Austria include telecommunications services, broadcasting services, and electronically supplied services such as software downloads, online advertising, and website hosting.
The reverse charge mechanism simplifies the VAT reporting process for businesses providing B2B electronically supplied services in Austria. Businesses need to understand this mechanism along with the applicable VAT rules and rates to accurately account for VAT and stay compliant with the Austrian tax authorities.
VAT obligations for marketplace and platform operators
The rise of ecommerce and digital marketplaces has led to new VAT obligations for marketplace and platform operators in Austria. These obligations apply to both the supply of goods and services.
Supply of goods
Austria follows EU VAT rules for marketplace operators (such as Amazon) supplying goods, with specific obligations for collecting and remitting VAT. As of July 2021, online marketplaces are considered to have received and supplied the goods for VAT purposes, making them accountable for the VAT on some of their sellers’ transactions.
Marketplace operators in Austria have the following responsibilities:
- Collect and remit VAT on transactions they facilitate if the underlying seller is not required to collect tax.
- Obtain sellers’ VAT numbers.
- Report pertinent information on supplies of goods and services.
Supply of services
Platform operators providing services in Austria are subject to standard VAT rules and rates. As of July 1, 2021, platforms providing services in Austria are no longer subject to the recording obligations under the Austrian VAT Act 1994 and are now subject to the general VAT regulations.
Penalties for late filings and misdeclarations
Non-compliance with Austrian VAT rules and regulations can lead to penalties and enforcement actions by the Austrian tax authorities.
Filing VAT returns after the deadline in Austria could lead to penalties from the Austrian Tax Authority. Such penalties may range from fines to criminal charges. The penalties for late filing are determined as 10% of the VAT due, with an additional charge of 2% of the VAT due if payment is delayed.
Businesses should keep track of VAT filing deadlines and reporting periods to avoid these penalties. Maintaining accurate records and ensuring timely VAT return submissions can help businesses remain compliant and minimize the risk of penalties.
Navigating Austria's VAT system and ensuring compliance with its regulations is crucial for businesses operating in the country. Understanding the different VAT rates, invoicing requirements, and filing procedures is essential to avoid potential penalties and maintain a good relationship with tax authorities.
It's also important to be aware of any changes in VAT rules and regulations, as tax laws can evolve over time. Seeking professional advice and staying informed can help businesses and individuals effectively manage their VAT obligations in Austria.
Do you need help with your VAT compliance? Book a free call with one of our VAT experts to find bespoke solutions for your business, optimize your VAT costs, and reach millions of new potential customers.
Frequently Asked Questions
What is the VAT % in Austria?
The standard Austrian VAT rate is 20%, with a reduced VAT rate of 13% and 10% applied to certain goods and services.
Is the Austrian VAT rate 19%?
The regions of Jungholz and Mittelberg have a VAT rate of 19%.
How can I obtain an Austrian VAT number?
To obtain an Austrian VAT number, submit the form U15 online via the online portal of the local tax authorities or contact the Austrian tax office.
What are the deadlines for filing VAT returns in Austria?
VAT returns in Austria must be filed by the 15th of the second month following the tax period, with monthly, quarterly, and annual filing options available.