Austria: 2021 VAT update

Many VAT changes are taking place in Austria most of which have to do with the current situation and the pandemic.

Austria’s Federal Council approved the below tax measures that are currently taking place:

• An extension of the reduced 5% VAT rate in the areas of hospitality, the hotel industry, and the cultural sector until 31 December 2021
• The tax deferrals limited until 15 January 2021 will be extended until 31 March 2021.
• The measure not to charge deferral interest and late payment surcharges is also extended until 31 March 2021.
• An extension of beneficial tax treatment for employees working from home, in quarantine, or short-time working due to COVID-19 until 31 March 2021
• The introduction of a 0% VAT rate on COVID-19 tests and vaccinations until 31 December 2022.

Also taking place:

• Reduction in turnover tax for feminine hygiene products.

Starting 1 January 2021, the preferential VAT rate of 10 % (previously 20 %) will apply to all types of sanitary products (e.g. sanitary pads, tampons, menstrual cups).

• VAT reduction for certain repair services

VAT on certain repair services (bicycles, shoes and leather goods, clothing and household linen) will be reduced from 20 % to 10 % from 1 Jannuary 2021.