Sales tax (Austria)

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The sales tax ( USt ) is a federal tax in Austria , i. H. the federal government has tax sovereignty. A breakdown between the federal states is being renegotiated.

The VAT tax the exchange of goods and services. In Austria, the federal law on the taxation of sales passed in the course of joining the EU applies (Value Added Tax Act 1994 - UStG 1994). For the most part, it implemented the sales tax law prescribed by the EU through directives into national law.

Taxable sales

The sales tax is generally subject to the following sales (§ 1 Paragraph 1 UStG):

  • Services that an entrepreneur in Germany performs for remuneration as part of his company
  • Own consumption in Germany
  • The import of objects from third countries ("import sales tax")
  • The intra-community acquisition in Germany against payment ("acquisition tax", Art 1 para 1 BMR)

If a turnover can be allocated to one of these circumstances, it is taxable and, if there is no tax exemption (§ 6 UStG), taxable.

Services

Services are divided into deliveries (§ 3 UStG) and other services (§ 3a UStG). With a delivery the power of disposal over an object is obtained. Other services are defined negatively as anything that is not a delivery.
The principle of uniformity of performance applies here. This means, on the one hand, that a service can only be either a delivery or another service and, on the other hand, that a secondary service follows the fate of the main service.

Entrepreneur

Sales tax is only subject to services by entrepreneurs and not by consumers . You are an entrepreneur in accordance with Section 2 (1) UStG if the following conditions are met:

  • commercial or professional activity
  • Self-employment (i.e. no employees, i.e. employees )
  • Sustainability (i.e. geared towards repetition)
  • Intention to generate income (intention to generate income is not required)

The company includes all commercial or professional activities of the entrepreneur (principle of uniformity of the company).

Place of performance

Since only domestic sales are taxable, the place of performance is important for cross-border sales.

  • Deliveries: Deliveries are made where the item is located at the time the power of disposal is obtained (§ 3 Paragraph 7 UStG). When the item is transported or dispatched, the delivery is deemed to have been carried out where the dispatch or transport begins (Section 3 (8) of the UStG).
  • Other services: In the case of other services, the basic B2B rule applies between companies , according to which the other service is carried out by the receiving company (§ 3a Paragraph 6 UStG). If the other service is carried out to a non -entrepreneur, the basic B2C rule applies, according to which the other service is carried out by the supplier (§ 3a Paragraph 7 UStG). However, there are numerous exceptions to this, in particular in connection with real estate, passenger and goods transport services, work on movable tangible objects, etc. (§ 3a Paragraph 9 to 15 UStG).

Remuneration

The service must always be paid (in the sense of an exchange of services) ( do-ut-des principle ). However, there are exceptions when an item is removed from a company (Section 3 (2) and Section 3a (1a) UStG) and for personal consumption (Section 1 (1) (2) UStG). In the case of compensation payments or membership fees to associations, the question must also be asked whether a service was provided only because of a specific consideration (then “false” and thus taxable) or without a specific consideration (then “real” and thus not taxable).

ownconsumption

This includes expenses that an entrepreneur carries out that relate to services that serve the purposes of the company and whose remuneration is not predominantly non-deductible expenses within the meaning of Section 20 (1) 1 to 5 EStG or according to Section 12 (1) 1 to 5 KStG ( Section 1 Paragraph 1 Item 2 lit a in conjunction with Section 12 Paragraph 2 Item 2 lit a UStG).

Import sales tax

For goods that are imported from non-EU countries, the import sales tax (EUSt) is due. The turnover is measured according to the customs value of the item (§ 5 Paragraph 1 UStG).

Income tax

The sales tax for deliveries from the other EU countries for which there is domestic tax liability is referred to as acquisition tax (Art 1 BMR).

Tax liability

In Austria, all entrepreneurs with an annual turnover of more than 30,000 euros are subject to sales tax and are therefore entitled to input tax deduction. All sales below this are tax-free due to the small business regulation, unless the small business opts for sales tax liability. However, there are exceptions for companies, e.g. B. for banks and insurance companies, doctors, various cult institutions, which are neither subject to sales tax nor entitled to input tax deduction (“false tax exemption” § 6 Abs 1 UStG).

Non-profit associations (with the exception of sports clubs) are also subject to VAT. However, if no profits are made for a longer period of time, the tax liability and the right to input tax deduction expire. There are, however, many exceptions here.

Tax rates

Austrian tax law exclusively uses the term sales tax and provides for three tax rates, namely the normal tax rate of 20%, the reduced tax rate of 10% and a special reduced tax rate of 13% (from July 1, 2020 to December 31, 2020 the reduced tax rates were applied Tax rates temporarily reduced to 5% due to the COVID-19 pandemic ). The special reduced tax rate applies, among other things, to animals, seeds and plants, cultural events, wood, the direct sale of wine and non-cross-border air traffic. This tax rate originally only applied to the sale of wine on the farm and was 12%. It was raised to 13% on January 1, 2016 and expanded to include the other taxable items, all of which were previously subject to the reduced tax rate of 10%. The reduced tax rate of 10% may apply. a. Applied to food , books , apartment rentals, newspapers, agricultural and forestry products and passenger transport (with the exception of domestic air transport).

Since January 1, 2009, the reduced tax rate has also applied to sales from the sale of pharmaceuticals, whereas the normal tax rate of 20% continues to apply to medical products. Medical devices are those products that are delimited by the Medicines Act and are subject to the Medical Devices Act of 1996. No distinction is made here as to whether the drugs are used in human medicine or veterinary medicine. The Austrian Agency for Health and Food Safety (AGES) determines whether certain goods are pharmaceuticals or not.

The reduction in sales tax from 20% to 10%, which was introduced after a lengthy discussion, resulted in the purchase of medicines being taxed in the same way as in Italy or Slovakia. At 19%, drugs are taxed significantly higher in Germany.

The special tax rate of 13% (originally 12%) for the sale of wine on the farm was negotiated with the EU during the accession negotiations.

In addition, there are the German tax rates of 19% or reduced 7% in the customs exclusion areas Jungholz ( Tyrol ) and Mittelberg ( Vorarlberg ), as these communities belong to Germany for customs purposes.

When trading in works of art and second-hand goods, differential taxation according to § 24 UStG is also common. Depending on the difference between sales and purchases, there is an effective sales tax rate of zero to a maximum of 20%. The assessment basis for differential taxation is the sales price less the purchase price, reduced by the normal tax rate of 20%.

Tax exemptions (§ 6 UStG)

There is no sales tax for the purchase of land . These are subject to real estate transfer tax .

Real tax exemptions

The entrepreneur (seller) can fully reclaim the sales tax (= input tax) paid by him from the tax office. Real tax-exempt are, among other things, export deliveries, contract processing for foreign clients and cross-border transports to third countries, sales from shipping and aviation as well as gold deliveries to central banks and their brokerage.

In the case of real tax exemption, the genuinely exempted entrepreneur submits a net invoice with his outgoing invoice (AR), i.e. does not show any Austrian sales tax (see § 11 UStG). The sales tax (ER) charged to him can, however, be claimed as input tax (VSt). The real tax exemptions are shown in Section 6 (1) 1–6 UStG.

Fake tax exemptions

Here the entrepreneur (seller) is not allowed to charge sales tax and also not to claim input tax deduction. Affected are z. B. Lending interest, account management commissions, sales of stamps, letters, parcels, building societies as well as sales from the activity as a doctor, dentist, psychotherapist etc.

Even the small business owner (KU) is one of the illegally exempted entrepreneurs according to § 6 Abs 1 Z 27 UStG . Small business owners are those who have a domicile or registered office in Germany and whose sales do not exceed EUR 30,000 (net limit) during the assessment period . Auxiliary business and the sale of business as a whole are not included. This limit cannot be exceeded by more than 15% within a period of five years. According to Section 6 (3) UStG, the KU can opt for full tax liability from the KU exemption.

Input tax deduction

In order for an entrepreneur who receives a service to be able to deduct input tax, the following requirements must be met (Section 12 (1) (1) lit a):

  • The service provider is an entrepreneur.
  • A formal invoice was issued.
  • The service was carried out for the company of the service recipient. Services performed for the company apply as soon as they serve for at least 10% business purposes (Section 12 (2) (1) lit a UStG). Services are not deemed to have been carried out for the company if their remuneration is predominantly not deductible expenses within the meaning of Section 20 (1) 1 to 5 EStG or Sections 8 (2) and 12 (1) 1 to 5 KStG or in connection with the Acquisition, renting or operation of cars is available (exception: commercial resale, passenger transport or rental, as well as cars without CO 2 emissions )
  • In addition to the actual taxation: The payment must have already been made.

The import sales tax can also be deducted as input tax (Section 12 Paragraph 1 Z 2 lit a UStG). Entrepreneurs who are subject to a "fake tax exemption" are excluded from the input tax deduction (Section 12 Paragraph 3 UStG), as are those who knew or ought to have known that the turnover in question is related to VAT evasion or other financial offenses relating to VAT (Section 12 para 14 UStG).

Tax liability

Tax debt is about who owes the sales tax to the tax office and when. Basically, the supplier is liable for the tax. Exceptions are:

  • In the case of other services, construction work and deliveries of works, the recipient of the service (reverse charge system; Section 19 (1) sentence 2 UStG)
  • In the case of import sales tax, the person who imports the item in Germany
  • In the case of intra-community acquisitions, the acquirer (Art 19 Para 1 Z 1 BMR)

The tax liability arises in principle at the end of the calendar month in which the service was performed (debit taxation). In the following cases, however, it arises at the end of the calendar month in which the fees for the service were received (actual taxation):

  • For freelancers, farmers and foresters who are not required to keep accounts or traders who are not subject to accounting, and all other entrepreneurs with sales below € 100,000 with the option of debit taxation (§ 19 Paragraph 2 Z 1 lit b sentence 1 in conjunction with § 17 UStG)
  • For down payments (minimum actual taxation)

Sales tax revenue

year Amount
in billion euros
2001 17.4
2002 17.6
2003 16.5
2004 18.2
2005 19.4
2006 20.2
2007 20.8
2008 21.9
2009 21.6
2010 22.5
2011 23.4
2012 24.6

Source: OeNB

Historical

The sales tax with input tax deduction ("sales tax ") replaced the previously applicable sales tax without input tax deduction on January 1, 1973 , which amounted to 5.5% in retail and 2% in wholesale. The legal basis for this was the Federal Act of June 15, 1972 on the introduction of the Sales Tax Act 1972.

  • The tax rates first levied in 1973 were 16% and 8%, respectively.
  • The standard rate was increased to 18% in 1976, the reduced tax rate remained at 8%.
  • In 1978, however, a third tax rate was set at 30%. This (colloquial) luxury tax was levied on vehicles, jewelry, watches, furs and consumer electronics.
  • In 1984 all tax rates were increased by two percentage points (10%, 20%, 32%). In addition, energy was transferred via an intermediate step (13%, 1981) from the reduced to the standard tax rate.
  • The “luxury tax” was partially omitted in 1987 and entirely in 1992 and was replaced by the standard consumption tax (Nova) for cars . Since then, the tax rates of 10% and 20% that still apply today.

After that there were only indirect tax increases, but these were extremely revenue-generating. In 1996, when Post & Telekom Telefonie was outsourced, it became subject to sales tax. Since 1997, medical services have been illegally tax-exempt, for which there are compensatory payments on the basis of the “Health and Social Aid Act (GSBG)”, which in 2009 amounted to 1.82 billion euros. In spite of the numerous direct and indirect tax increases, the sales tax today, as in the year it was introduced, generates revenue of around 8% of GDP .

Since January 1, 2016, the special reduced tax rate has been 13% instead of the previous 12%. Certain goods or services have been or will be transferred from the reduced tax rate of 10% to the special reduced tax rate:

The increase in some reduced VAT rates from 10% (or 12%) to 13% affects a. Animals, seeds and plants, cultural services (museums, zoos, film screenings), wood, the sale of wine on the farm, air transport, baths, youth care and accommodation. For the latter, the increase only became effective after the end of the winter season on May 1, 2016.

future

For some time now, Austria has been thinking of a solution that would make the deduction of input tax obsolete. The sales tax is only due when it is sold to the end consumer, who is actually supposed to bear the entire tax burden. Every sale between companies should only take place on a net basis, which avoids a flow of money to and from the tax office. However, there are problems with proving whether the buyer is actually a company. This could for example be done using a tax card or the like. The aim is to put a stop to the increasing number of pre-tax fraud and to keep the tax losses in the event of bankruptcy low. However, exemptions from the EU are necessary for this. In 2002 all companies were given a VAT number , as is customary in the internal market , which must be stated as a formal requirement on all invoices. For construction work, security transfer etc. a transfer of tax liability to the recipient is already standardized by law; d. H. the invoice is to be issued net with a reference to the transfer of tax liability.

Sales tax as an election issue

The sales tax was a controversial topic in the National Council election campaign in 2008 , in which the SPÖ wanted to halve the tax rate on food against the background of strong inflation. The ÖVP and the Greens questioned its effectiveness. Ultimately, sales tax was not cut in half.

literature

Berger / Hinterleitner / Toifl / Wakoungi: Lecture notes on sales tax. 6th edition. LexisNexis publishing house, Vienna 2014, ISBN 978-3-7007-5777-1 .

Berger / Toifl / Wakounig: VAT system guideline , practical comment. 1st edition. LexisNexis publishing house, Vienna 2009, ISBN 978-3-7007-4294-4 .

Berger: Case studies on sales tax. 1st edition. LexisNexis publishing house, Vienna 2014, ISBN 978-3-7007-5097-0 .

Web links

Individual evidence

  1. ↑ FAQ - Reduced tax rate for gastronomy, culture and publications. Retrieved July 9, 2020 .
  2. ↑ https://www.wko.at/Content.Node/Service/Steuern/Umsatzsteuer/Spezielles-zur-Umsatzsteuer/Die_wichtsten_Anwendungsfaelle_fuer_den_ermaessierter_Ums.html
  3. ↑ Chamber of Pharmacists: Lowering the VAT on medicines brings savings for patients at www.apotheker.or.at, accessed on October 7, 2015
  4. ↑ OeNB
  5. ↑ Federal Law Gazette No. 224/1972
  6. ↑ Low VAT to rise , on Kurier.at on December 3, 2014, accessed on October 7, 2015
  7. ↑ The 2015/2016 tax reform on tax messages.pwc.at, accessed on October 7, 2015