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Sales Tax (value-added Tax)
General Guidelines
Austrian sales tax is generally based on the country of origin principle which means that Austria will only tax sales which take place domestically, regardless of whether they are executed by a domestic or foreign enterprise. The business status of the taxed person (self-employed but also groups or associations) is a prerequisite.
As a general rule, goods and services in Austria (with only a few exceptions) are subject to sales tax, at the rate of 10% on food, books, theatrical and cultural events, artistic activity, domestic passenger transportation, rentals for private residential use (including hotel rooms), etc., and at 20% for everything else. In general, it is the entrepreneur providing the goods or services who is liable for and pays the taxes to the revenue office; for the most part, the tax is included in the price. If requested, the entrepreneur must issue an itemized receipt or invoice which lists the rate of taxation and the tax amount. Such receipts are necessary for tax refunds.
Due to the extensive realignment of legal stipulations with respect to sales tax within the EU (6th Directive), these regulations essentially correspond to those of other EU member countries.
Tax Burden
As mentioned above, the entity rendering services is generally liable for taxes and has to withhold sales tax on all sales taxable in Austria and pay by way of assessment (sales tax return) at the responsible revenue office. When a business generates profitable sales in Austria, an application for a sales tax identification number (UID) has to be filed with the responsible revenue office. Sales receipts have to be issued correctly and have to include date, sales amount, tax amount and/or tax rate as well as UID. Due to the complexity of Austrian sales tax law, further details need to be worked out specifically.
Special regulations are in place for services rendered by foreign entrepreneurs which require frequent and short-notice location changes, which includes services from foreign artists and participants in art performances and productions. Said entrepreneurs can neither be resident nor have their temporary domicil or place of business operation in Austria. In their case, the tax burden lies with the recipient of their services who will be responsible for withholding and paying sales tax.
Tax Exemption
Regardless of the fact that the Austrian sales tax law recognizes in some exceptional cases “real” tax exemptions for a handful of services, in this paragraph, only pertinent “unreal” tax exemptions are mentioned.
Foreign artists (companies) with neither residence, place of business operation, or temporary domicil in Austria who generate taxable domestic sales, an “unreal” tax exemption can be grantes by authorities under certain conditions. An additional exceptional rule exists for “small businesses” with taxable domestic sales under € 20,000.00.
Assessment
A business is generally obligated to file taxable sales in form of a sales tax return at the responsible revenue office on a monthly basis by the 15th of the following calendar month. The sales tax return must reflect the actual withheld sales tax as well as the sales tax paid as recipient of services in Austria (advance payments of assessed sales tax). The difference of these amounts represents the tax owed (tax burden) or to the tax to be returned (tax credit). If the taxable sales of the previous year were under € 22,000.00, the filing of a quarterly sales tax return is sufficient. Businesses, whose taxable sales in the year of filing will be below € 7,500.00, are exempt from a quarterly tax filing unless the revenue office requests a tax return. In any case, every business which generates taxable sales in Austria (even if an “unreal” tax exemption applies) is obligated to file an annual sales tax return in Austria.
Sales Tax Return
(value-added tax or V.A.T. return)
Even foreign production companies with no place of business operation and no taxable sales generated in Austria (meaning “real” taxable sales: sales for which taxes were retained as a deduction or individually taxable sales) can apply for a return on the assessed sales tax. The amount of the return has to be at least € 36.00.
To collect this tax return all original receipts have to accompany the application which has to be filed at the revenue office of the city of Graz. The application has to be filed by June 30 of the calendar year following the refund period. An important condition for obtaining a tax return is the submission of an official business registration or license from the home country as well as a tax number. Applications for a tax return can be filed between one and four times a year. Each application has to refer to sales from one calendar year only. When filing for a sales tax return during a calendar year, a minimum amount of € 360.00 applies.
The correctness of the receipts submitted with a tax return application is essential. They have to include date, sales amount, tax amount and/or tax rate as well as the UID of the vendor. Car sales (not truck sales) are among the purchases not eligible for sales tax return in Austria.
It is recommended that foreign production companies consult a tax-accountant prior to beginning production in order to clarify the tax situation and to plan refunding procedures effectively.
Graz-City Revenue Office
Foreign Enterprises Department
Conrad-von-Hötzendorfer-Straße 14-18
A-8018 Graz
T: (+43) (0)316 881-3802
F: (+43) (0)316 817-608
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