Temporary VAT rate reduction to 5% in Austria

7. July 2020 | Reading Time: 2 Min

TPA News Update Umsatzsteuer Steuerberatung Insights update

As of July 1st until December 31st 2020, a new VAT rate is temporarily introduced in Austria, which is deemed to support restaurants, hotels as well as the culture and art sector.

Austria: Reduced VAT rate of 5%

The following supplies are covered by the temporary 5% VAT rate:

Restaurant services

The sale of food as well as alcoholic and non-alcoholic drinks in restaurants according to the Austrian Industrial Code. This includes catering services, delivery and take-away of food from restaurants. The sale of drinks or food in shops are not subject to the new reduced VAT rate.

Hotel services

The accommodation in furnished rooms and ancillary services, which are usually closely connected to accommodation and which are not charged separately – like parking, wellness services or child care. Bed & Breakfast or All-Inclusive-packages can thus be charged with 5% VAT in total. However, the 5% VAT rate cannot be applied on additional services for sports camps and therefore, the payment has to be split accordingly.

Camping

This includes the rental of camping spaces and ancillary services like e.g. the provision of common rooms, power and gas connections and beaches, as long as these services are not charged separately.

Publications

The 5% VAT rate is applicable on supplies, imports and intra-community acquisitions of printed media and e-publications and

Printed media and e-publications

    • books, brochures, newspapers and similar prints
    • e-books
    • picture album
    • picture books
    • colouring books
    • printed maps and guides

Culture

Art objects according to Annex 1 Clause 10 to the Austrian VAT code

    • Paintings drawn by hand
    • Artistic photographies
    • Original sculpture arts
    • Other art objects

Additionally, the following services are subject to 5% VAT

  • Revenue from activities as an artist
  • Tickets (incl. ancillary services) for a
    • Theatre
    • Concert
    • Museums
    • Botanical or zoological garden
    • Film screening
    • Cinema
    • Circus

It is mandatory to apply the reduced rate on these services. If an invoice is issued with a higher VAT rate, the higher amount has to be declared and paid to the tax administration. To avoid such a higher tax liability invoices can be corrected by manually adding the correct VAT rate.

Entrepreneurs are not obliged to pass on the price reduction to customers. We therefore recommend to carefully consider the new pricing.

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