AUSTRIA: COVID-19 VAT IMPLICATIONS

AUSTRIA – Update 1st July

5% VAT rate also applies to accommodation services (hotels), campsites and e-books (effective July 1, 2020)

5% VAT rate applies not only to restaurants, the cultural sector and publications as originally communicated, but also to accommodation services (hotels), campsites and e-books.

Source Credit – National Council

AUSTRIA – Update 23rd June

Austria Publishes Law for Reduced VAT Rate on Non-Alcoholic Beverages

On 17 June 2020, Austria published in the Official Gazette the law for the implementation of the measures of the relief package to aid the recovery of the catering/restaurant industry announced in May 2020. One of the main measures of the package is a reduction in the VAT rate to 10% on non-alcoholic beverages until the end of 2020. As provided in the law, this applies for supplies made after 30 June 2020 and before 1 January 2021.

Source Credit – Orbitax

AUSTRIA – Update 22nd June

Reduction of VAT rate to 5% from 1 July till 31 December for certain supplies

Finance Minister Blümel: reduced VAT rate introduced to support the gastronomy, culture and publishing sectors.

“We in the coalition have decided to take further action to combat the effects of the coronavirus crisis in the medium and long term. We are working on a credit moratorium for particularly affected sectors. The idea is that the state will make advance payments on credit instalments so that companies continue to have sufficient liquidity. Additionally, the fixed costs subsidy is going to be adapted, both in terms of its criteria and duration, to provide ongoing support for particularly affected sectors”, said Finance Minister Gernot Blümel at today’s press conference on further support measures for the catering, tourism and culture sectors. A reduced value-added tax rate of 5% will also be introduced, and will apply, for example, to food and drinks in catering establishments, visits to museums, cinemas or music events, and to newspapers and other periodicals and books.

This tax reduction will apply from 1 July 2020 to 31 December 2020. “It is encouraging to see the economy slowly getting back on track. At the same time, in some sectors, the new start is proving hesitant and uncertain. Together with the European community, we are currently working on a temporary exception for these sectors. In this exceptional situation, it must be possible to provide special short-term assistance to particularly affected sectors”, continued Finance Minister Blümel.

Tax deferrals extended until 15 January 2021

Businesses will additionally be supported by an automatic extension of tax deferrals. “We can see that the economic effects of the coronavirus crisis will be with us for some time to come. We are providing relief to businesses by postponing tax payments beyond 2020, until 15 January 2021”, said Finance Minister Blümel. The tax deferral extension will be fixed by law and made possible by a change in the Austrian Federal Tax Code. This will save those liable to pay tax from having to file a new application, and tax offices from having to issue a new assessment notice.

Source Credit – Michaela Merz

AUSTRIA – Update 15th June

VAT rate reduced to 5% for café, restaurant and similar hospitality services, and entrance to cultural, cinema, sporting and other live venues

Austria is to reduce the Value Added Tax rate to 5% on sectors hard-hit by the COVID crisis:

• Café, restaurant and similar hospitality services currently at 10%
• Entrance to cultural, cinema, sporting and other live venues, currently at 13%

The measure is likely only to be in place until the end of 2020.

Source Credit – Richard Asquith – (Avalara)

AUSTRIA – Update 13rd May

Non-alcholic drinks from standard VAT rate of 20% to reduced rate of 10%

Source Credit – Richard Asquith (Avalara)

AUSTRIA – Update 13rd May

VAT reduction to zero percent for deliveries and intra-EU purchases of respiratory masks

Finance Minister Blümel repeals tax on respirator masks – 0% VAT from 13-APR-2020.

Especially during a successive revival of the economy, the principle remains: look after yourself, look after me. Protection masks covering the nose and mouth can prevent others’ body fluids from directly entering the wearer’s oral and nasal region. Wearing protective masks is therefore essential, especially for the protection of high-risk groups, and is now enabling the Austrian economy to slowly recover.

With the reopening of small businesses, the obligation to wear protective masks is also extended. Therefore, sufficient protective masks must now be available at a reasonable price, because in addition to wearing them in the shops, they are now also compulsory in public transport, such as the underground.

This important measure is supported financially, and VAT on respirator masks is therefore repealed by Finance Minister Gernot Blümel.

“Now it is a matter of persevering and continuing to protect our fellow human beings. Here, respirator masks are a key health precaution to prevent infection by droplet infection. That is why we have reduced the tax rate for delivery and purchase to 0 %, thus keeping the financial burden of the obligation to wear protective masks for citizens as low as possible. For times of crisis must not be times of bureaucracy,” according to Finance Minister Blümel.

The Federal Ministry of Finance reduces the tax rate on respirator masks from 20% to 0% for supplies and intra-Community acquisitions. This applies to supplies and intra-Community acquisitions made after 13-APR-2020 and before 01-AUG-2020. The legal basis will provide for a corresponding retroactive entry into force. The corresponding VAT rate must already be stored in the POS system and settled so that no subsequent corrections of invoices and reclaims of VAT amounts are necessary.

Source Credit – Orbitax

AUSTRIA – Update 22nd April

Deadline for submitting the annual VAT return for 2019 has been extended to 31 August 2020

• No postponement possible of submitting advance VAT returns in due time• No postponement possible of submitting advance VAT returns in due time
• An extension of the deadline can be applied for in such cases in accordance with § 134 para. 2 BAO, without the threat of consequences under fiscal criminal law.
• It is possible to apply for interest-free deferral of duties or their payment in instalments, provided that the Corona crisis has been shown to have a concrete impact. Deferral interest (3.88 % pa) and default surcharges (2 %) can then be reduced to 0.00 %.
• The deadline for submitting the annual VAT return for 2019 has been extended to 31 August 2020.

Similar measures have also been introduced in numerous other EU member states.

Source credit : BMF decree 

AUSTRIA – Update 17th April
All businesses can apply for a deferral of VAT payments without incurring an interest charge – the VAT payment has to be made by 30 September 2020. Late payment penalties will still be applied but can be waived on application by explaining to the Tax Authority how the business has been affected by Covid-19. However filing deadlines and late filing penalties remain in place so returns should be submitted on time.
 
Source Credit – Accordance VAT

AUSTRIA – Update 16th April

Payment of fees and duties suspended, extension of payment deadlines and tax exemption for corona assistance

Finance Minister Blümel: “We are doing what is necessary to manage the crisis. This requires not only financial resources but also goodwill and flexible solutions. Times of crisis must not be times of bureaucracy. We also want as much funding as possible to reach the people directly, which is why contributions made for coping with the corona crisis are granted tax exemption.”

In the context of proceedings relating to tax offences and offences relating to the payment of fees and duties, for the purpose of legal protection, key deadlines will be suspended. These comprise deadlines for appeals, objections, submission applications ant the complaints relating to coercive measures which were still running as at 16 March 2020 or in respect of which the relevant period begins to run between 16 March and 30 April. These deadlines will be suspended until 1 May 2020. This will ensure that no one suffers any disadvantage as a result of these exceptional circumstances because deadlines cannot be met. Every citizen should have sufficient time to take the steps needed in the proceedings in question. This interruption of the deadline also applies to foreign taxable persons (especially foreign entrepreneurs). If the restrictions on movement last longer, deadline suspensions may be extended through a government ordinance.

Grants for dealing with the corona crisis will be tax-exempt. However, the expenses which they cover will still be considered in full as operating expenses. This exemption is intended to cover funds originating from the COVID-19 Crisis Assistance Fund or from the hardship fund, as well as all grants paid for such purposes, irrespective of who pays them and how the funds are raised.

Businesses are already burdened as a result of the crisis. They should not have to pay additional fees and duties to apply for emergency support. Adjusting the Austrian Fees Act will ensure comprehensive exemption from fees and duties for all documents and official procedures related to the corona crisis.

Source Credit – Federal Ministry Republic of Austria

AUSTRIA – Update 31st March

• Reduction of advance payments for income tax or corporate income tax for 2020 to the extent of the expected reduction in the tax base (possibly to EUR 0.00).
• Interest is not to be assessed if an additional income tax or corporate income tax claim arises in the course of the assessment 2020 due to the reduction of advance payments.
• Filing deadline for annual tax returns 2018 are extended until 31 August 2020
• Filing deadlines for tax appeals which were open on 16 March 2020 or which begin between 16 March and 30 April 2020 start to commence on 1 May 2020 again
• Deferral or suspension of tax audits.
• Deferral or instalment applications have to be approved.
• Interest is not to be assessed if an additional income tax or corporate income tax claim arises in the course of the assessment 2020 due to the reduction of advance payments.
• Upon request, late payment surcharges can be reduced or not assessed.

Source Link here

AUSTRIA – Update 31st March

• Austria extend the due date to 31st August 2020 for annual VAT returns
• Business’s that are able to show significant disruption relating to the virus outbreak may be eligible to postpone VAT audits

Source Link here

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