Small business (Regulation from 1 January 2025)

If the total turnover in a calendar year does not exceed the small-business limit, there is an exemption from VAT in Austria under certain conditions. This tax exemption is called the "small business regulation".

Caution

The old legal situation still applies for sales until 31 December 2024.

If the small business regulation is applied, the enterprise is not permitted to charge VAT and therefore not required to pay VAT to the tax office. In addition, the enterprise does not have to submit a preliminary VAT return or annual VAT return. This is a non-genuine tax exemption, there is no input tax deduction.

The following requirements must be met for the small business regulation to apply:

  • The enterprise must have its place of business in the EU.
  • The small business limit of 55,000 Euro (until 31 December 2024: 35,000 Euro) was not exceeded in the previous or current calendar year.

If the enterprise is based in Austria, only the above-mentioned requirements are valid and the small business regulation applies without an application from the first turnover. If the small business regulation is not to be used, the option for tax liability must be exercised.

In contrast to domestic enterprises, the small business regulation is only applicable to enterprises with their registered office in another EU member state upon application and further requirements must be met in addition to those mentioned above.

Determining the small business limit

The small business limit must not have been exceeded in the current or previous calendar year.

An entrepreneur generates sales of 60,000 Euro in calendar year 2024. In calendar year 2025, he generates sales of 49,000 Euro.

Solution:
As the small business limit was exceeded in calendar year 2024, the small business regulation cannot be applied in calendar year 2025 either.

When determining the small business limit, all sales carried out in the calendar year must be taken into account. This means that all B2C and B2B transactions carried out by the enterprise that are taxable in Austria must be included. This therefore also includes intra-Community deliveries and spendings treated as such.

However, transactions that the enterprise receives on the input side are not to be included, even if it is liable for tax on these transactions (intra-Community acquisitions or receipt of reverse charge services).

However, unlike the small business regulation applicable until 31 December 2024, the calculation of the small business limit is not based on an assumed tax liability. This means that the entire agreed remuneration must be taken into account.

An Austrian entrepreneur offers training as a fitness trainer to non-entrepreneurs (turnover: 18,000 Euro) and entrepreneurs (turnover: 32,000 Euro) in the calendar year 2026. In addition, he sells sports equipment (Therabands and fascia rollers) to his customers (turnover: 3,000 Euro). Furthermore, the entrepreneur receives a consultancy service amounting to 4,000 Euro from a German entrepreneur. The consultancy service is taxable in Austria and reverse charge applies.

Solution:
The following transactions must be taken into account for the purposes of the small business limit:

  • Training services to non-entrepreneurs (18,000 Euro)
  • Training services to entrepreneurs (32,000 Euro)
  • Sale of sports equipment to entrepreneurs and non-entrepreneurs (3,000 Euro)

However, the consulting services received by the Austrian entrepreneur from the German enterprise are not included. The turnover relevant for the small business regulation in calendar year 2026 is therefore 53,000 Euro. The entrepreneur is therefore exempt as a small business unless he waives the application of the exemption.

The following sales are not included in the small business limit:

  • auxiliary transactions including the transfer of an entire business
  • transactions that are (non-genuinely) tax free in accordance with section 6 paragraph 1 (8d, j) and (9b, d) and (10) to (15) and (17) to (26) and (28) of the UStG, e.g. delivery of investment gold, remuneration to supervisory board members, turnover from care and childminders, turnover from medical treatment as a doctor

Please note

Where a small business owner discloses the VAT on an invoice separately, they must pay this tax amount to the tax office, provided that they do not adjust the invoice sent to the recipient of a service.

Exceeding the small business limit

If the small business limit is exceeded, the small business exemption can no longer be applied in the following calendar year.

In the calendar year in which the limit is exceeded, the small business limit can still be applied until the end of the year if the limit is not exceeded by more than 10 percent.

An Austrian entrepreneur is exempt from tax as a small business owner. In 2025, she generated sales of 54,800 Euro from January to October. In November, she sells another product for 500 Euro. By the end of the calendar year, she still generates sales in December totaling 100 Euro and therefore annual sales of 55,400 Euro. The entrepreneur can claim the tax exemption for all sales generated in 2025. For sales carried out from 1 January 2026, she can no longer apply the exemption in section 6 paragraph 1 (27) UStG.

If the enterprise exceeds the small business limit by more than 10 percent, the exemption for the turnover that exceeds the limit and for all subsequent turnovers ceases to apply.

An Austrian entrepreneur is exempt from tax as a small business owner. In the calendar year 2025, he generated sales of 54,800 Euro from January to October. On 1 November, he sells goods worth 7,000 Euro. The tax exemption for small businesses cannot be applied to the sale of the goods on 1 November or to any transactions carried out thereafter.

Option for tax liability

For small business owners, there is, however, the option of waiving the tax exemption and thereby opting for tax liability. In this case, taxation is applied in accordance with the general principles (taxable turnover associated with the right to deduct tax in accordance with section 12 of the UStG). The enterprise must submit preliminary VAT returns and an annual VAT return when exercising the option to tax.

Until the VAT assessment takes effect, a written declaration that the small business owner rule is being waived can be made to the tax office. This declaration, which can be revoked, is binding for five years.

Please note

Small business owners are only entitled to issue a VAT registration number where this is needed for business relationships with entrepreneurs in other EU countries and are able to request a VAT registration number for this purpose (Form U15).

Old legal situation

Until 31 December 2024, only enterprises with their registered office in Austria can make use of the small business regulation. The small business limit is 35,000 Euro net, whereby a calculation must be made on the assumption of tax liability. If the small business limit is exceeded, there is a retroactive tax liability on sales for the entire calendar year. For further information on the old legal situation, see the VAT guidelines (UStR).

Legal bases

Forms

Translated by the European Commission
Last update: 31 October 2024

Responsible for the content: Federal Ministry of Finance

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