Comprehensive Guide to VAT in Austria: Rates, Registration, and Compliance

VAT in Austria - Three Types of Rates

There are three types of VAT rates in Austria:

1. Standard VAT rate,

2. Reduced VAT rates,

3. Zero VAT rate.

How Much is VAT in Austria’s Regions?

Under the VAT Austria Law, a special 19% VAT rate is applicable in two regions in Austria: Jungholz and Mittelberg. This is also approved and noted in the EU VAT Directive under Article 104.

VAT Registration Threshold

VAT rules and regulations, as well as official guidelines and comments from governing bodies such as the Ministry of Finance and Tax Authority, provide important information about the VAT threshold in Austria.

According to the rules, small businesses can benefit from VAT registration exemption if their annual turnover does not exceed EUR 55,000. Once this threshold is reached, the obligation to register for VAT Austria is triggered. However, this rule applies only to domestic taxable persons, whereas foreign taxable persons are not subject to it. Moreover, there is no VAT registration threshold for non-resident taxable persons.

As an EU country, Austria implemented all EU-wide VAT rules into its national legislation, including those concerning the VAT registration threshold for intra-EU distance sales of goods, B2C supplies of services, and non-EU-established suppliers of electronically supplied services. The threshold for intra-EU distance sales of goods and B2C supplies of services is EUR 10,000, set at the EU level, whereas there is no such threshold for non-EU supplies of electronically supplied services.

As of January 1, 2025, taxable persons established in another EU country can benefit from the EU VAT SME exemption scheme, provided they meet certain conditions. To qualify, the taxable persons must submit prior notification in their home EU country, ensure that their national turnover did not exceed EUR 55,000 in the previous or current year, and that their EU-wide turnover stays below EUR 100,000 for the same period.

Types of Taxable Activities in Austria

Individuals and business entities that supply goods or services for a fee in Austria are considered taxable persons under VAT law. Apart from supplying goods and services, other business activities are also vital in determining VAT liability, such as importing goods, acquiring goods intra-EU, or exporting to countries that are not EU members. Engaging in any of these activities means involvement with taxable activities subject to VAT rules and regulations.

VAT Registration Process

There are differences between the requirements for domestic and foreign businesses registering for VAT in Austria.

Austria VAT Registration for Domestic Businesses

One of the critical components of the VAT registration process is obtaining the VAT Identification number (VAT ID number). The competent Tax Authority usually automatically issues the VAT ID number when the process of obtaining a tax number is initiated. However, suppose the taxable person does not receive a VAT ID number on that occasion. In that case, taxable persons must apply for it using the U15 form, 'VAT Identification Number – Application for issue'. Domestic businesses can apply for a VAT ID number at the nearest Tax office.

Austria VAT Registration for Foreign Businesses 

Foreign taxable persons, like businesses, must register for VAT before engaging in taxable activities in Austria. To complete this process, they must submit the application form and other necessary documents to the Tax Office in Graz-Stadt. Appointing a tax representative is optional for EU-based businesses, though it may help them complete this procedure more efficiently. In contrast, non-EU companies registering for VAT in Austria must appoint a tax representative.

VAT Returns in Austria

Taxable persons must electronically submit monthly or quarterly VAT returns via FinanzOnline, depending on their annual turnover. Taxable persons whose turnover for the previous calendar year is less than EUR 100,000 can submit quarterly returns. However, they can submit monthly VAT returns, like taxable persons whose annual turnover exceeds EUR 100,000.

The deadline for submitting monthly or quarterly returns is no later than the 15th of the second month following the reporting period. In addition, certain groups of taxable persons must submit yearly returns. However, the annual return generally serves only as a summary of all monthly or quarterly VAT returns.

Penalties for Failure to File Tax Return

Non-compliance with registration and Austria VAT return filing obligations can, and in most cases will, result in fines and penalties. The amount of the penalty the Tax Authority imposes on the taxable person at fault depends heavily on the type of misconduct and whether it is a first or repeated offense. An interest of up to 10% can be imposed for the late submission of VAT returns. In addition, a 2% interest rate, or even 4%, is due on late payments.

VAT Rules for Electronically Supplied Services 

Digital services, digital products, and electronic services are all synonyms for electronically supplied services (ESS). Regardless of which one is in use, they refer to services that are automatically provided over the Internet or similar networks and do not depend on human intervention. In some cases, the supply of these services may rely on human intervention, but it is minimal. 

The EU VAT Directive introduced this definition of the ESS to the EU-wide VAT framework. All the EU Member States, including Austria, followed and implemented the EU guidance and taxability rules into their national laws.

Taxability Rules for ESS:

Under the EU-harmonized legislation, the general place-of-supply rules apply to B2B supplies of ESS, whereas for B2C supplies, the VAT rate is that of the consumer's residence.

The EU VAT Directive also introduced the EUR 10,000 threshold for defining which VAT rate applies to supply rules for distance sales of goods and B2C ESS. When the annual turnover for said supplies is below EUR 10,000, suppliers can apply their home country's VAT rates or register for the One Stop Shop and use a single registration. Different rules apply to those whose annual turnover is above the threshold. They must apply the VAT rate of the country where their consumer is located, such as the VAT rate Austria.

How much is VAT in Austria on ESS?

The Austria VAT rate for ESS is 20%.

E-Commerce Rules

Apart from introducing rules on the supply of ESS, the EU VAT Directive introduced significant changes and innovations to the EU e-commerce market. These rules were also implemented in the national legislation of EU countries, thereby creating a unified, harmonized market. Although these rules were implemented at the EU level, they also significantly affect non-EU taxable persons operating in the EU market.

Main changes and novelties include introducing rules for importing goods from third countries and territories valued at EUR 150 or less, also known as distance sales of low-value goods. In addition, deemed supplier rules applicable to platform operators were introduced, further reshaping the e-commerce landscape.

The EU made notable efforts to simplify the reporting of cross-border transactions, otherwise known as cross-border or intra-EU distance sales of goods.

As part of the simplification process, the Mini One Stop Shop (MOSS), established in 2015, underwent a significant transformation into a more comprehensive and efficient One Stop Shop (OSS). Therefore, an additional Import One Stop Shop (IOSS) scheme was introduced to complement the two previously established schemes. At this point, the OSS counts three schemes, each important for e-commerce businesses in different ways:

• Union Scheme,

• Non-Union Scheme,

• Import Scheme.

VAT EU Reporting

In Austria, taxable persons must submit recapitulative statements, also known as EC Sales Lists and Intrastat reports.

EC Sales List

The EC Sales List (ESL) is a type of tax return on intra-EU supply of goods and services to another taxable person not located in Austria but in another EU country, which must be submitted monthly or quarterly. Taxable persons whose annual turnover on intra-Community supplies subject to ESL is less than EUR 100,000 file quarterly, while those with their sales of goods and services to other EU VAT-registered entities must submit monthly ESLs. 

Intrastat 

Intrastat is a statistical report on the movement of goods between EU countries and EU businesses. Once the Intrastat thresholds have been exceeded, the obligation to submit an Intrastat report arises.  

In Austria, two Intrastat thresholds are defined. Suppose businesses import or export goods to another EU Member State, and the value of those transactions is above EUR 1,1 million for either arrivals or dispatches. In that case, the standard Intrastat report must be submitted within one month of exceeding the threshold. However, if the total value of intra-EU arrivals or dispatches exceeds EUR 12 million, a more detailed Intrastat report with individual calculation of the statistical value is mandatory.  

Digital Reporting

Local Businesses

Local taxable persons, such as businesses, must issue and transmit e-invoices for public-sector transactions, that is, B2G transactions. B2G e-invoices are transmitted through the government portal Unternehmensservice or Peppol eDelivery Network. There are still no mandatory rules for B2B e-invoices, but businesses can voluntarily adopt this solution.

Non-Resident Businesses

Non-resident taxable persons, including non-resident businesses, must follow the same B2G e-invoicing rules as locals do when engaged in any contractual agreement with federal agencies. However, the e-invoicing rules state that foreign companies must issue and receive B2G e-invoices under their technical possibilities.