Expanding your business operations to Austria is a step that opens up new opportunities for your companys development. Austria offers a stable economic environment, high quality of life and access to a wide consumer market. The Austrian market is famous for its high purchasing power of consumers and high demand for innovative services and products. Therefore, many companies plan to start selling their products and services in Austria. To make this possible without any obstacles, you should familiarize yourself with tax regulations, including the methods of settling VAT.
Obligation to register a company for VAT purposes
Austrian VAT is consistent with the system applicable throughout the European Union. VAT is a tax paid by consumers. Business customers are required to pay VAT, which is refundable. Foreign companies must register in Austria for VAT purposes and apply the applicable VAT rates when supplying goods and services. This applies to transactions such as shipping or purchasing goods, selling goods to local customers, and delivering goods at your own expense. The VAT registration threshold is EUR 10,000 and it is a constant value independent of the currency rate or the country where purchases are made. You can register your company as a VAT payer online – the appropriate forms can be downloaded from the website of the Austrian Ministry of Finance.
Basic VAT rate and reduced rates
In Austria, as in every European country, there are several VAT rates. The basic rate is 20% and covers most goods and services offered on the market. A reduced rate of 13% applies to selected categories including supplies of live animals and plants, hotel accommodation, accommodation services, firewood, cultural services, domestic flights, sporting events, amusement parks, certain agricultural products, wine production, cut flowers and decorative plants. The second reduction rate of 10% applies to the costs of heating, renovation works, food, domestic and international transport, restaurant services, pharmaceutical products, feminine hygiene products, newspapers, magazines, books, as well as social services, waste disposal, sewage treatment and some agricultural products.
Zero rate and company exemption from VAT
In Austria, a 0% rate is applied to intra-Community supply transactions and international transport. However, VAT exemption may apply if the company has an annual turnover of less than EUR 35,000. Additionally, companies operating in the banking, insurance and medical sectors, as well as cultural institutions and associations, are exempt from VAT. Companies subject to VAT can also benefit from deduction of input tax. VAT paid by another entrepreneur for services or supplies of goods is deducted from the liability of a company operating in Austria.
Obligation to submit VAT returns
VAT taxpayers in Austria are obliged to submit annual VAT returns, and monthly or quarterly returns throughout the year. Foreign companies must submit returns within a year. If the annual turnover does not exceed EUR 100,000, this can be done quarterly, if the turnover is higher – returns must be submitted monthly. This must be done by the 15th day of the month following a given billing period. The annual returns must be submitted by April 30 of the year following the tax year.
Cooperation with a professional tax office
The assignment of different product categories to specific VAT rates in Austria may change over time. Therefore, running a business in this country requires monitoring changes in tax regulations. Instead, many entrepreneurs decide to cooperate with a professional tax office, such as INTERTAX. It is a company with extensive experience and an established position on the market. More information about Austrian VAT can be found on the INTERTAX website at: https://polishtax.com/austrian-vat-rates/. Thanks to this, you can be sure that your business will always be conducted in accordance with tax regulations and you will not be exposed to any inconvenience from the local tax office.
