Tax rate by region Austria

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VAT System in Austria: A Streamlined Framework for Tax Administration

The VAT (Value Added Tax) system in Austria aligns with EU regulations, establishing a streamlined framework for tax administration in accordance with the “Sixth Council Directive 77/388/EEC.” Implemented in 1973, this system unifies procedures within the European Union, enhancing compliance and ensuring tax efficiency for businesses operating within the region.

Austria

Austria adopted the EU VAT system in 1973, integrating with European tax regulations to enhance compliance and efficiency.

Official government link: Bundesministerium für Finanzen

20.00%

E-products and services VAT/Sales tax rate

10.00%

Reduced tax rate

Reduced tax rate product categories

E-Books and electronical publications

Exempted product categories

No digital goods or services categories are exempt

Reverse charge mechanism for B2B sales

Yes

Tax ID validation required

Yes

When do you have to register

Non-resident companies have to register as soon as goods are being delivered or services are being provided

Online registration possible

Yes

Local representative needed

Yes

Registration procedure

Check Eligibility: Confirm your business needs to register for VAT.
Gather Documents: Collect necessary documents (registration form, proof of identity, etc.).
Submit Application: Send the completed form and documents to the tax office in Graz-Stadt.
Appoint Fiscal Representative: If outside the EU, appoint a fiscal representative.
Receive VAT Number: Wait for your unique VAT number (4-6 weeks).
Start Reporting: Begin filing VAT returns and paying VAT.

List of digital and electronic services liable for tax

E-books and digital publications, music downloads and streaming services, online courses and educational content, software and applications (including mobile apps), video games and in-game purchases, subscription-based services (such as streaming platforms like Netflix), cloud storage and computing services, digital advertising services, website hosting and domain registration, and online newspapers and magazines are all examples of digital products and services.

Penalties

Penalties may be incurred for late payment, late filing and misdeclarations. In severe cases, Austrian tax authorities can initiate fiscal criminal law proceeding, but penalties can also be mitigated if a voluntary disclosure is made.

Registration threshold

No threshold, non-resident companies must register for VAT

Filing interval

Monthly: if turnover exceeds EUR 100.000
Quarterly: if turnover is up to EUR 100.000
Annually: Annual VAT return has to be filed regardless of turnover value

Filing deadline

Monthly and quarterly: The 15th of the second month following the end of the reporting period

Annually: Must be filed by June 30 of the following year

E-invoicing requirements

Not mandatory

Record keeping

Invoices (that must be issued within six months after the delivery of the goods/product), turnover via MOSS (Mini One Stop Shop) must be kept for 10 years and VAT returns

Effortless Subscription Management and Billing

Austria’s VAT on Digital Services

With a standard VAT rate of 20%, Austria follows the EU-mandated standard for digital services such as SaaS (Software as a Service). This standard rate applies to most goods and services, providing a consistent tax treatment across different industries. It’s important to note that a reduced VAT rate of 10% may apply based on specific categorization within the EU regulations.

VAT Compliance Essentials: Filing Deadlines, Payments, and Record Retention

To ensure compliant VAT handling, understanding the filing obligations is crucial. Businesses exceeding €100,000 in turnover are required to file monthly. Those under this threshold can file quarterly or annually. However, an annual VAT return remains mandatory regardless of turnover. Payment settlements follow the established filing frequency with an applicable deadline, typically set as the 15th of the second month following the reporting period. For annual reports, payments are due by June 30th following the taxable year. To uphold proper record-keeping, businesses must maintain accurate invoices along with MOSS (Mini One Stop Shop) information for up to 10 years.

How does the Austrian VAT system impact SaaS businesses?

The Austrian VAT system dictates that a 20% standard rate applies to the supply of SaaS, just like it does with the supply of other goods and services. While this system ensures smooth and integrated processes, understanding individual compliance aspects is critical for SaaS providers operating in Austria.
What should SaaS companies do to remain compliant with VAT regulations in Austria?

Staying compliant means recognizing both the filing frequency for VAT returns and the deadline for each. For most SaaS companies based in Austria, monthly filing would be required as the turnover exceeds the €100,000 threshold; however, it is always wise to validate your individual case with an expert. Ensure accurate record-keeping with invoices and any applicable MOSS data readily available for the required 10 years.
If a customer is outside of Austria, would the SaaS company still charge them VAT?

While the 20% standard VAT rate does apply throughout Austria, the location of the customer may determine the applicable VAT rate. If your customer resides within another jurisdiction within the EU, they could be subject to the applicable VAT rate in their country and a reverse charge mechanism.

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