VAT rates and tax exemptions

The main tax rates are

• the general tax rate of 20 per cent and
• the reduced tax rates of 10 per cent and 13 per cent.

The 20 per cent tax rate is the standard tax rate in Austria.

Sales in respect of which the tax rate of 10 per cent or 13 per cent is applied are the exception. These are listed in full in section 10 of the Umsatzsteuergesetz.

The 10 per cent tax rate applies, for example, to:

• Renting for residential purposes
• Accommodation in furnished living rooms and bedrooms and the ancillary services often associated therewith (including heating)
• Rental (provision for use) of land for camping purposes
• Rubbish collection
• Delivery of books, newspapers, magazines, foodstuffs

The 13 per cent tax rate applies, for example, to:

• The delivery of living animals, living plants, firewood, etc.
• Turnover from the activity of an artist
• Film or circus performances
• Admission fees for sporting events

Please note

The European Commission provides information on the tax rates of EU member states in the "Taxes in Europe (→ EC)" database.

Further links

• Reduced tax rate on overnight stays
• Rz 1161 and following of the UStR 2000

Legal bases

Section 10 of the Umsatzsteuergesetz (UStG)

The Umsatzsteuergesetz (UStG) makes a distinction between genuine and non-genuine tax exemptions. For genuine tax exemption, the right to input tax deduction remains unaffected, such as, for example, in the case of:

• export deliveries to third countries and intra-Community deliveries (special regulations apply to "tourist exports")
• handling and processing ("contract processing") of objects

In the case of non-genuine tax exemption, there is no right to an input tax deduction, such as, for example, in the case of:

• turnover of small company owners
• monetary and banking transactions (e.g. the granting of credit) as well as the management of special funds
• sale of land
• certain commercial rentals (→ BMF)^{German text}
• services of an insurance agent
• medical and paramedical services (e.g. services as a physician, midwife, psychotherapist, massage therapist, freelancers within the meaning of section 7 paragraph 1 in conjunction with section 1 (1) to (7) of the MTD-Gesetz)
• educational services provided by certain private schools and other general education or vocational training establishments
• certain sales of childminders or foster parents
• sales of hospitals, sanatoria, nursing homes as well es homes for the aged, homes for the blind and infirmaries

Small companies are businesses that are operated in Austria and whose annual turnover does not exceed 35,000 Euro. If the VAT exemption is disadvantageous for the company (e.g. due to high input tax in the start-up phase or because customers are mainly companies entitled to deduct input tax), it can be waived (option declaration).

Legal bases

Section 6 of the Umsatzsteuergesetz (UStG)

It should be noted that in the case of some non-genuine tax exemptions, such as, for example, the supply of immoveable property, there is a legal option to waive the application of this exemption and to treat own services/turnover as taxable through this option. If the tax exemption is waived the standard 20 per cent tax rate is to be used and the input tax deduction is available. Exercising the option does not require any special declaration to the tax office. Appropriate treatment in the preliminary VAT return or in the VAT return suffices.

Please note

In the case of the letting or leasing of immoveable property and for commonhold associations, the option to waive the application of tax exemption is only possible under certain conditions.

Small companies can also waive the tax exemption. They must declare the waiver in writing to the tax office.

Further links

• Information on the option to waive the appliaction of tax exemption for renting and leasing and on the input tax adjustment period for real property (→ BMF)^{German text}

Legal bases

• Waiver of tax exemption: section 6 paragraph 2 of the Umsatzsteuergesetz (UStG)
• Waiver of tax exemption for letting and leasing of immoveable property and for services provided by commonhold associations: section 6 paragraph 1 (16) and (17) in conjunction with section 6 paragraph 2 of the UStG
• Input VAT deduction: section 12 of the UStG