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Lexis Nexis – VAT Publication - Austria

Chapter Headings

    1. Key data
        A. Small Business Tax Exemption
        B. Distance selling
        C. VAT Rates
        D. VAT Return Filing Periods
        E. Compulsory Submission of Periodic Returns
        F. VAT Return Filing and Payment Deadlines
        G. Filing Periods and Deadlines – Other Returns
        H. Intrastat Thresholds
        I. Intrastat Filing Periods
        J. Intrastat Filing Deadlines
        K. Special Schemes
    2. Getting started
        A. Administration
        B. VAT registration
        C. VAT grouping
        D. Record keeping
        E. Inspections
    3. Reporting obligations
        A. Periodic VAT Returns
        B. EC Sales Lists (recapitulative statements)
        C. Intrastat
    4. General Rules
        A. Taxable Transactions
        B. Place of Supply-Goods
        C. Place of Supply-Services
        D. Tax Base
        E. Zero Rated Supplies
        F. Exempt supplies
        G. Tax Rates and Reduced Rated Supplies
        H. VAT on Expenditure
        I. Invoices
        J. Reverse Charge
        K. Special Rules for Non Resident Businesses
        L. Time of VAT liability
    5. Special Rules for Intra EU Transactions
        A. VAT Number
        B. Intra EU Supplies of Goods
        C. Intra EU Arrivals of Goods
        D. EU Triangulation
        E. Services
    6. Special Schemes
        A. Flat Rate Scheme for Farmers
        B. Tour Operators Margin Scheme
        C. Margin scheme for second hand goods
     7. Surcharges and Penalties
     8. Refunds of VAT to Foreign Businesses
        A. General
        B. Refunds to EU Businesses
        C. Refunds to Non EU Businesses



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     Appendices

         A. VAT invoice




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             Part 1 – Key Data- Information up to date as at 1 January 2011

A. Small Business Tax Exemption                                  € 30,000.00
B. Distance Selling                                              € 35,000.00 (since 1 January 2011, before:
                                                                 € 100,000.00)
C. VAT Rates:
 standard rate                                                  20%
 reduced rate                                                   10%
 farmers flat rate                                              10% consumers, 12 % business customers
D. VAT Return Filing Periods:
 small businesses                                               turnover of the last calendar year: ≤ €
                                                                 100,000.00 quarterly (since 1 January
                                                                 2011, before: € 30,000.00)
   all other businesses                                         monthly

E. Compulsory Submission of Periodic                             turnover of the last calendar year :
Returns                                                          €30,000.00 (since 1 January 2011, before:
                                                                 €100,000.00)
F. VAT Return Filing and Payment Deadlines:
 monthly and quarterly returns             15th of second month
   annual return                              Paper- 30 April, electronic 30 June next
                                               year
G. Filing Periods and Deadlines – Other Returns:
1. EC Sales Lists (Goods) – Filing Periods:
 businesses with a quarterly VAT return        quarterly
     period
 all others                                    monthly
2. EC Sales Lists – Filing Deadlines:              end of the next month
3. Foreign Business VAT Refunds – Filing periods:
 EU                                            max = 1 calendar year
                                                min = 3 months
 non EU                                        max = 12 months
                                                min = 3 months
4. Foreign Business VAT Refunds –Filing Deadlines:
 EU                                            30 September
 non EU                                        30 June
H. Intrastat Thresholds:
 supply exemption threshold                    € 500,000.00
 acquisitions exemption threshold              € 500,000.00
I. Intrastat Filing Periods:
 supplies                                      monthly
 acquisitions                                  monthly
J. Intrastat Filing Deadlines:
 supplies                                      10th of next month
 acquisitions                                  10th of next month
K. Special Schemes:
1. cash accounting
 threshold for businesses                      turnover  € 700,000.00
 threshold for other taxable persons           turnover  € 110,000.00




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Part 2 – Getting Started
A. Administration

VAT is under the care and management of the Austrian tax authorities.

For natural persons resident in Austria the tax office is responsible, which is
competent for the district, in which the residence of the person is located. Legal
entities established in Austria have to deal with the tax office, where their general
management is located.

Non resident businesses having a fixed establishment in Austria have to be
registered for VAT purposes at the tax office competent for the district where the
fixed establishment is located.

Non resident businesses without a fixed establishment in Austria are registered at:

Finanzamt Graz Stadt
Referat für ausländische Unternehmer
Conrad von Hötzendorfstraße 14-18
8018 Graz
AUSTRIA

More information can be found at the link:

https://www.bmf.gv.at/Steuern/Fachinformation/Umsatzsteuer/AuslndischeUnterneh
mer/_start.htm




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B. VAT Registration

General Conditions for Registration:

Austrian resident businesses have to register for VAT

Exceptions exist for :

        persons claiming the small business tax exception with an annual turnover of
         not more than € 30,000.00.(since January 2011, before: € 7,500.00)
        agricultural enterprises under the flat tax scheme for farmers, if they do not
         have to pay additional VAT (see Part 6/A)

For non-resident businesses registration is compulsory, when taxable transactions
(except importation from non EU) are carried out in Austria (see Part 4/A).
 Therefore the obligation for VAT registration for non-resident businesses may be
caused by distance selling or intra EU acquisitions of goods in Austria (see Part 5/C).

For non-resident businesses which do not carry out taxable transactions in Austria or
solely taxable supplies for which the recipient has to account for VAT (reverse
charge system-see Part 4/J), VAT registration is not required.

If vice versa reverse charge VAT is shifted to such businesses as recipients, there is
an obligation for VAT registration. As a relief, registration in these cases is not
compulsory, but only optional, when input VAT based on reverse charge is fully
recoverable and no other input VAT refund is claimed.

Registration for VAT means the business must account for VAT on its income at the
appropriate Austrian tax rate, is entitled to recover Austrian VAT charged on its
business expenses by writing them in the VAT returns and has to abide by the
reporting duties.

Small Business Exemption

Is a very important exemption, which only applies to persons who are resident in
Austria having a net turnover taxable in Austria of not more than € 30,000 a year.
Once in 5 years this threshold can be exceeded of 15% at maximum.
If the relevant threshold is exceeded, VAT must be paid retrospectively.

Persons using this exemption must not account for VAT in their invoices, otherwise
they owe VAT on basis of the invoices.

There is a possibility of option for normal VAT taxation, frequently chosen when the
customers are business customers with the right to recover input VAT

Consignment Stock

When a business resident in another EU country dispatches stock to Austria with a
view to future sales of those goods, Austria treats these arrivals into Austria in
principle as a normal intra-EU acquisition of goods. Thus the business has a
requirement to register for Austrian VAT.

Sometimes Austria considers the imports not to be intra-EU acquisitions, but the
withdrawals of the stock as intra EU supplies by the non resident business to the



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Austrian customer. So the non resident business is spared VAT registration in Austria
.

The conditions for this relief are:

        it has to be a “call off stock”, which means that the stock is available only to
         one customer, taking the goods of the stock and selling it to his customers
        the goods have to be withdrawn within 6 months
        the tax office competent for the customer has to be informed
        the home country of the non resident business has to grant the same relief
        records of the goods and the stock has to be made


Fiscal Representative

Businesses having no legal seat or establishment in the EU have to appoint a fiscal
representative if they carry out transactions subject to Austrian VAT, intra EU supply
of goods or intra-Community acquisitions. If the business solely carries out reverse
charge transactions or sells goods to a business customer, who has to pay VAT for
the supplier (see Part 4/K) no fiscal representative is required.




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C. VAT Grouping

If a parent company holds control over sub companies in financial, economic and
organizational matters, the companies are regarded as one fiscal unit for VAT
purposes. Only the controlling company is registered for VAT purpose. Transactions
among the companies are not regarded as taxable supplies. The input VAT of the
subordinate companies can only be recovered by the parent company.

The VAT Grouping rules only work among companies resident in Austria or Austrian
branches of non resident companies.




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D. Record Keeping

It is a legal requirement for all Austrian VAT registered entities to keep accounting
records.

Records must be retained for at least a 7 years time period, starting with the year
following the year the records were made.

Records referring to the construction and renovation of buildings have to be kept for
12 years.

The keeping may be done in hard copy or on data storage devices.

The records have to be made available in Austria for an inspection.




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E. Inspections

VAT controls are usually carried out within the bounds of the full audits held by the
fiscal authorities.

However sometimes special VAT controls may take place.

They mostly occur, when monthly tax returns were not submitted or VAT refunds are
claimed or considerable deviations from the monthly tax returns appear in the
annual tax return.

Tax inspectors may visit the business premises, interview the owners or directors of
the business and key staff, inspect the premises, and review the VAT records.




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Part 3 – Reporting Obligations

A. Periodic VAT Returns

The main reporting obligation for all VAT registered entities is the periodic VAT
return.

Small businesses have to file quarterly. They have an option for monthly VAT
returns. In regard to threshold see Part 1.

All other business have to file monthly.

Taxable persons have to calculate VAT based on the periodical tax returns and pay
it to the tax authorities.

Periodical VAT returns have to be filed with the tax office by the 15th of the second
month following the quarter or the month concerned. The due date is the same day.

They may be submitted earlier, which is reasonable for a VAT surplus. A VAT surplus
takes effect from the day of the submission, at the earliest from the 1st of the month
following the period concerned. From that day it clears tax debts. Repayment has to
be applied for.

Businesses with an annual turnover of not more than € 30,000.00 do not have to
submit quarterly or monthly VAT returns, if they pay VAT in time. But they do have to
fill in the form and keep it for showing when an inspection comes. The details of this
threshold is shown in Part 1.

The annual VAT return has to be submitted by April 30th of the following year. This
period is extended to June 30th, if filed electronically. Persons represented by a tax
advisor have an extension of up to one year.

If an access to the Internet is available periodical VAT returns have to be filed
electronically via “FinanzOnline” the official online system provided by the Austrian
tax authorities. Information about FinanzOnline in German language can be found at
the link :

http://www.bmf.gv.at/EGovernment/FINANZOnline/_start.htm

The annual VAT return has to be filed electronically when threshold for compulsory
submission of periodical VAT returns are reached-see Part 1.




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B. EC Sales List (Recapitulative Statements)

All businesses making

        intra EU supplies of goods to EU business customers or
        since 2010 intra EU services, subject to the general businesses to business
         rule (see Part 4/C)
        EU triangular transactions – (see Part 5/D)

have to file EC Sales Lists monthly via “Finanz Online”. Small size businesses may
do this quarterly. The threshold is shown in Part 1.The deadline is the end of the
month following the period concerned.

The information required on EC Sales Lists are as follow:

        customer’s VAT Registration Number.
        total value of supplies in Austria to the EU-customer
        total value of services in Austria to the EU-customer
        the intermediate seller in a triangular transaction (see Part 5/D) has to
         mention the last customer’s VAT Registration Number and the total value of
         supplies to this customer marking the position with “1”.




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C. Intrastat

All taxable persons carrying out intra EU acquisitions or supplies exceeding one of
the Intrastat Thresholds (see Key Data) will be obliged to file Intrastat returns for
acquisitions, supplies or both. The Threshold applies separately for each direction of
intra Community movement.

Reporting obligation arises from the beginning of the year when threshold was
exceeded in the previous calendar year. If this happens for the first time the duty
starts from the month when the threshold is exceeded.

Reporting period is basically a month. A shorter period (weekly) is possible. Closing
date is the 10th of the subsequent month.

The returns can be filed using the official paper return forms, via the internet or a
software supplied by Statistik Austria.




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Part 4 – General Rules
A. Taxable Transactions

The following transactions are subject to VAT:

        supply of goods or services
        self supply by businesses
        importation of goods from non EU countries
        intra-EU acquisition of goods (see Part 5/C)

Supply of Goods and Services

A taxable supply is:

        any supply of goods and services
        carried out by a taxable person
        within the course of its business
        on the territory of Austria
        for consideration


A taxable person is a person who, independently, carries out a lasting economic
activity.

Withdrawal of goods forming part of business assets where VAT was deductible are
considered as taxable supplies of goods, if they are made for subsequent purposes:

        for private use
        for the use of the staff
        for the permanent transfer or disposal for no payment except for giving
         samples or making gifts of small value for business

Supplies of services are all kinds of taxable supplies which do not constitute a supply
of goods. It can be an active or passive activity as well as the obligation to tolerate an
act or a situation or to refrain from an act.

Following activities are considered to be taxable supplies of services:

The use of business assets where input VAT was recovered

        for private use
        for the use of the staff

The supply of services carried out free of charge

        for non business or private use
        for the use of the staff




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Self Supply by Businesses

The only case is expenditure in connection with services not being deductible for
income tax or corporate income tax (for example entertaining or representation
expenses).

Importation of Goods

Importation of goods from non-EU countries is subject to VAT no matter whether they
are carried out on behalf of private or taxable persons.

Under certain conditions taxable persons registered for VAT in Austria can apply not
to pay for import VAT but to put in on the tax account. Then VAT can be
compensated with the input VAT declared on the VAT return.




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B. Place of Supply of Goods

In general only supplies of goods which take place in Austria are subject to Austrian
VAT.

General Principles

The place of supply is the place where the power of disposition is transferred. If
goods are transported, the place of supply is considered where the transportation of
goods begins.

Assembly work or installation supplies consisting partially of goods and services are
treated as a supply of goods, when goods predominate. In this case the place of
supply is the place where the assembly or installation is completed.

Chain Supplies

They occur when more than two persons are involved in the supply of goods which
are directly dispatched form the first supplier to the last customer. Chain supplies
have to be broken down into individual transactions between two parties For each
transaction the place of supply has to be determined separately.

There is only one moved transaction. This is the transaction, where one of the
involved parties at first arranges the transportation. In cross border transactions the
moved transaction is an export to a non EU country or an intra community supply.
The place of supply is the location where the transport begins.

For the other transactions the general rule – transfer of disposition - has to be
applied. They take place either in the country of origin or determination depending
who arranges the transport.

Following example explains the rules:

The Austrian business A sells goods to the English Business B which sells it to the
Chinese customer C. Goods are directly dispatched from A to C. If A or B arranges
the transport, the supply from A to B is an export, which may be under certain
conditions tax free (see Part 4/E), the supply from B to C takes place in China. If the
transportation is arranged by C, A carries out a taxable supply to B, subject to
Austrian VAT, the transaction from B to C is an export.

For EU Triangulation some relief exists ( see Part 5/D)

Gas, Electricity, etc.

The place of supply of gas, electricity and from 1 January 2011 also of heating and
cooling energy to a reseller through EU connected distribution systems are where
the customer is established.

In all other cases the supply takes place were the meter is installed.




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C. Place of Supply of Services

General Principles

Austrian VAT legislation fully implements the relevant EU VAT Directives and should
therefore be consistent with the rules in other EU countries.

The rules depend on whether the customer is a business customer or a consumer.
The other important fact to know is where the customer is established or normally
resides.

Business Customers are :

        taxable persons (see Part 4/A) if such a person also carries out non taxable
         activities, the person is considered as a business customer including all
         activities
        non taxable legal entities with a VAT number

All other customers are consumers.

Note that there is no requirement for the business to be registered for VAT but
without a VAT number it will be necessary to hold evidence of business status.

The place where the customer is established is usually taken as the place where a
business operates from or, for an individual, where the person normally lives.

If, however, services are supplied to a fixed establishment that is different to the
place where the business normally operates from or the place where the individual
normally lives then the service should be treated as supplied to this fixed
establishment.

The rules are structured as a basic rule and a series of exceptions.

In every case the exceptions to the basic rule must be considered first and if none of
those apply then the basic rule applies.

Basic Rules

There are two versions of the ‘basic rule’ depending on whether the customer is a
business or a consumer.

The basic rule for services supplied by taxable persons resident in Austria to foreign
business customers is:

        the place of supply is where the customer is established, therefore Austrian
         VAT does not apply
        any VAT accounting requirements are deemed to take place in the customer’s
         country and be the responsibility of the customer to deal with.

The basic rule for services supplied to foreign consumers is:

        The place of supply is the location the supplier is established, therefore
         Austrian VAT applies and the foreign consumers are treated as if they were
         Austrian consumers.



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The exceptions to these basic rules are explained below and suppliers should be
aware that if the place of supply is deemed to be another country then there may be
a requirement to register for and account for VAT in that country. Local advice should
be considered

Exceptions to the Basic Rule that Applies to Both Business Customers and
Consumers:

        The service of providing the buyer with a service follows the same rules as
         the provided service.

        Services connected to immovable property such as construction services,
         property management, services of estate agents, hotel accommodation.

         These services are subject to VAT according to the place where the
         immovable property is physically located.

        passenger transport

         Where passenger transport involves a journey through more than one
         country VAT applies in each country to the extent that the journey took place.

        short terms hire of means of transport

         ‘means of transport’ includes cars, boats, planes and other vehicles

         ‘Short term’ means less than 90 days for boats and similar vessels, and less
         than 30 days in all other cases.

         VAT applies to these services in the country where the means of transport is
         put at the disposal of the customer.

        cultural, sporting, artistic, scientific, educational or similar services

         Until 31 December 2010:

        These services are subject to VAT according to the place where the services
         are physically carried out

         From 1 January 2011:

         The upper described rule (subject to VAT according to place of performance)
         is valid for such services without restriction if they are carried out to
         consumers.

         If the recipient is a foreign business customer the place of performance rule
         is only to be applied for services referring to admission to an event. Other
         services are subject to the general business to business rule.

        restaurant and catering services

         The services are subject to VAT in the country where the activity is physically
         carried out.



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Exceptions that Apply only to Consumers:

        freight transport and ancillary services

    Freight transport services, including the services of intermediaries, are subject to
    VAT according to the place where the transport physically takes place.

    Ancillary transport services (including the services of intermediaries) are subject
    to VAT in the place where the services are physically performed.

        valuation of or work on goods

    These services are subject to VAT in the country where they are physically
    performed.”Goods” mean any tangible moveable property and the type of service
    affected includes:

     Processing, manufacturing, assembly, repair, cleaning, restoration, alteration,
      calibration, examination, valuation, etc.

        services of intermediaries

    These services are subject to VAT in the place where the service being arranged
    is itself subject to VAT.



Exceptions that Apply only to Non-EU Consumers:

All services mentioned below take place in the country where the consumer is
resident. They are called “catalog services” in tax terms.

        transfers and assignments of copyright, patents, licenses, trademarks and
         similar rights.

        advertising and public relation services

        services of consultants, engineers, interpreters, consultancy bureau, lawyers,
         accountants and other similar services; data processing and provision of
         information other than services relating to immovable property

        banking, financial and insurance services

        the supply of staff

        the relinquishment of an upper mentioned right

        abandon of an act

        hire of goods other than means of transport

        telecommunications services

        radio and TV broadcasting


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        electronically supplied services

        provision of access to, and transport or transmission through, natural gas and
         electricity distribution systems etc. and the provision of other directly linked
         services


Exceptions that Apply to Suppliers from Non EU Countries


        The place of supply of providing electronically services to consumers resident
         in an EU country is the country where the consumer resides.

         Following a special scheme the supplier having no establishment in the EU
         may register for VAT only in one EU country, although his supplies are carried
         out in many EU countries.

The supplies of subsequent services take place in Austria, when the use is in Austria:

        rental of transport equipment to Austrian business customers or consumers

        providing “ catalog services” to public legal entities being no business
         customers

        providing telecommunications services and TV broadcasting to Austrian
         consumers

        renting of movable goods other than transport means

        certain gambling and sport betting services




Other Special Rules

        Rental of transport equipment used in a non EU country takes place in this
         country.
        The place of supply for Personnel leasing is shifted to a non EU country when
         the hired personnel works there




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D. Tax Base

VAT is charged on the consideration paid for the supply of goods and services.
Excise duties are part of the VAT base. If the consideration is not in cash, VAT is
charged on the open market value. In case of self supply or deemed supplies of
goods and services VAT is calculated on cost price plus ancillary cost.

The VAT base for imported goods is the custom value, including certain transport,
insurance and packing costs.




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E. Zero Rated Supplies

Some supplies are zero-rated. This means that VAT incurred on expenditure
associated with making these supplies, including overhead costs, is recoverable.

The most frequently occurring examples are:

1. Export Sales

To business customers and consumers under the subsequent conditions:

        The goods have to be transported to a non EU State, they may be processed
         by somebody else before export.
        Evidence of the transportation has to be provided ( consignment notes or
         special forms created by the ministry of finance).
        If the customer arranges for transportation, he must not be a resident of
         Austria, proofs must be kept in the books of the seller.

For the export to foreign consumers, who transport the goods in their luggage, there
is a minimum threshold of € 75.00. Furthermore the consumer must not reside in the
EU.

2. Processing and Repairing of Export Goods

        The goods to be processed must have been imported by the customer into
         the EU or bought in the EU for this purpose.
        The goods must be transported after processing to a non EU State.
        If the customer arranges for the transportation he must not be a resident of
         Austria.
        Evidence about the demanded conditions must be kept in the books of the
         processing business.


3. Cross Border Transportation of Goods from and to Non- EU States

As the general rule has to be applied to business customers, meaning that the place
of supply is in the country of the customer, this tax exception is only relevant for
export transportation ordered by consumers or Austrian resident businesses.
The import transportation is zero tax rated as far as the services are included in the
base for the Import tax.

4. Cross Border Passenger Transportation by Ship or Aircraft




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F. Exempt Supplies

Austrian legislation largely follows the EU Principal VAT Directive and applies
exemption to most of the same categories of goods and services.

The impacts of exemption are:

        The goods or services are free of VAT at the point of delivery; and
        VAT incurred on costs associated with making the exempt supplies (including
         overhead costs) is not recoverable.




Leasing of Immovable Property for Non Accommodation Purposes

Option for VAT taxation can be filed which is frequently done when the tenant is
entitled to recover input VAT. Not included in the exemption is parking facilities or
camping sites (20%)


Other Important Exemptions are:

        social security institutions

        banking and insurance services, insurance agents

        sales of real estate, an option for VAT taxation can be filed

        betting, lotteries and other forms of gambling

        private schools, which can be compared to public school and self employed
         teachers at such private schools or public schools

        hospitals owned by public corporations or non profit organizations

        services of professions about health services such as doctors, dentists,
         psychologists, dental technicians, etc.

        the supply of services linked to the protection of children and young persons
         owned by public corporations or non profit organizations

        cultural services, rendered by governmental institutions or non profit
         organizations such as theatres, museums, etc




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G. Tax Rates and Reduced Rated Supplies :

The standard tax rate is 20%.

The reduced tax rate amounts to 10%.

important applications of this rate are:

        supply, self supply or importation of certain goods, such as: food, fish, milk
         and milk products, some animals (cattle, horses, pigs, etc.) ,eggs, fruits and
         vegetables, sugar, oils, books, newspapers, and magazines
        rental for residential purposes excluding cost of heating
        lodging in the hotel sector
        passenger transportation if not zero rated
        works of artists
        swimming baths, hot springs, spas
        non profit organizations
        cinema shows
        museums




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H. VAT on Expenditure

Businesses that make taxable supplies are entitled to recover Austrian VAT incurred
on expenditure (known as ‘Input Tax’).

input tax may derive from VAT:

        charged by other taxable persons
        paid for imports of goods from outside the EU (import VAT)
        on the acquisition of goods from another EU country ( see Part 5/C)
        accounted for under the reverse charge system (see Part 4/J) .

For deduction subsequent conditions have to be met:

        The supply has to be carried out not less than 10 percent for purposes for the
         business of the recipient. For mixed used goods except buildings (see below)
         input tax can be recovered completely, VAT for private withdrawal or use has
         to be paid (see Part 4/ A).
        If VAT was charged by other persons there has to be an invoice fulfilling
         certain formal requirements (see Part 4/I).
        No appropriate invoice is needed for the deduction of import VAT, acquisition
         VAT or VAT under the reverse charge system.

No input tax recovery is possible:

        for expenditure about the purchase, leasing or operation of passenger cars
         and motorcycles. Driving schools, automobile trading, or leasing, commercial
         transport of persons are excepted. Trucks in general, buses and small trucks
         are not subject to this block of input tax recovery. The types of small buses
         and small trucks, for which the recovery of input tax is permitted are
         published at the link:
         https://www.bmf.gv.at/Steuern/Fachinformation/Umsatzsteuer/Listedervorsteu
         erab_5549/_start.htm
        Food on business travels exceeding the official rate of € 26.40 per day for
         Austria. For each foreign country there exists a specific rate.
        Representation expenses, but 100% VAT is recoverable for entertainment
         expenses if they are caused by sales promotion purposes, which must be
         proved.
        Supplies of goods and services for that part of a mixed used buildings which
         are not used for business purpose.

The input tax on invoices has to be claimed in the VAT return of the month, when the
service or the goods are supplied and the invoice is dated.

The import VAT has to be claimed in the VAT return of the month, when it was paid.
If the import VAT is not paid but only booked on the tax account, it can be recovered
at the same time when the debt of the import VAT is due, so both can be
compensated.

Concerning VAT Refund to Non-Resident Business see Part 8.




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Note: import VAT

Import VAT can only be recovered by the person who is entitled to dispose of the
goods at the border according to the VAT rules. In chain supplies ( see Part 4/B).
When goods are delivered “duty unpaid” the person who is liable for import VAT is
not the person who can recover it.

Subsequent example shows that:

A and B are resident in Austria, A buys goods from B, who buys it from C in
Switzerland. C arranges for transportation, the goods are delivered “duty unpaid”
from C to A.. According to the rules explained in Part 4/B B has the right of disposal
at the Austrian border, but A has to pay the import VAT. Therefore B has to refund
import VAT to A , B is entitled to recover it. There are exceptions to the general rule,
when foreign businesses are involved (see Part 4/K).

Businesses that make only exempt supplies cannot recover input tax (see Part 4/F)
Businesses that make both taxable and exempt supplies can partially recover input
tax.

These businesses known as ‘partly exempt’ businesses are obliged to use a partial
exemption method when calculating the input tax figures required for disclosure on
the periodic VAT return.

The subsequent described method may be used:

1.) The whole amount of input tax should be divided into a part directly attributable
to taxable supplies-this part is recoverable; and into a part directly attributable to
exempt supplies-this part is not recoverable.

2.) If this is not possible, the input tax can be segmented at the
Taxable Supplies -Exempt Supplies ratio.

3.) Instead of method 2 a mixture method can be applied:
As far as VAT on expenditure can be directly attributed to the making of either
exempt or taxable supplies , method 1 should be applied.
All other VAT incurred on expenditure is divided between taxable and exempt
supplies using method 2.




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I. Invoices

A VAT invoice must be issued for all supplies, carried out by taxable persons to
business customers and legal entities. An invoice for consumers is compulsory for
construction services.
The time limit for issue is within six months of the supply.

For invoices not exceeding € 150.00 including VAT less formal requirements are
necessary.

The characteristics of full VAT invoices and less detailed invoices are in Appendix C.

Invoices for Intra-Community supplies (see Part 5/B) have to include the VAT number
of the supplier and recipient and the reference that the supply is zero rated according
to Art. 6 of the VAT act.

The invoice of the intermediate seller within an intra-EU Triangulation (see Part 5/D)
has to point to “Art 141 a-e of Directive 2006/112/EC“ and include VAT Number of
the seller and the recipient.

If reverse charge ( see Part 4/J) is applied VAT Number of the supplier and the
recipient and a reference that the VAT liability is shifted to the recipient ( “Übergang
der Steuerschuld auf den Leistungsempfänger” ) have to be put on the invoice. No
Austrian VAT must be shown.

Electronic invoicing is also permitted provided that the integrity of the invoice is
maintained using advanced electronic signature, electronic Data Interchange or
other similar system. The recipient has to agree.




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J. Reverse Charge

This term means that VAT liability is shifted to the customer. The supplier has to
issue an invoice without VAT (see Part 4/I).

If the customer is able to recover input tax, the shifted VAT need not be paid by the
customer; it only has to be recorded in VAT return.

    1. When taxable persons who are not resident in Austria carry out services in
       Austria, construction services or installation supplies, reverse charge system
       has to be applied. If the supply is achieved by a permanent establishment in
       Austria, reverse charge must not be used. When real property is rented,
       reverse charge is not applied. The non resident landlord has to account for
       VAT and file tax returns.
    2. The supply of electricity, natural gas, heating, cooling energy by a supplier
       without seat or a permanent establishment in Austria to a recipient who is
       registered for VAT in Austria is also under the reverse charge regime.

In subsequent cases reverse charge is applied regardless of whether the supplier is
resident in Austria or not

    3. construction services, if the recipient is a taxable person who itself was
       engaged to carry out these construction services or which usually carries out
       construction services. Since 1 January 2011 the cleaning of buildings is also
       considered as construction service.

    4. sale of collateral goods by the pledgor to the pledgee.

    5. immovable property sold in course of an execution sale by public auction

    6. sale of used material and scrap to business customers

In cases 1, 4 and 5 the recipient has to be either a business customer or a non
business public corporation.

The recipient need not be a resident of Austria.




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K. Special Rules for Non Resident Businesses

Supply of services

Reverse charge system is applied , when non resident taxable persons carry out
services. Details are explains in more detail in previous part.

Supply of Goods by Non Resident Persons

When a non taxable person having no fixed establishment in Austria supplies goods
to a business customer or a public corporation, the supplier has to issue a regular
invoice with VAT and the recipient has to retain VAT and pay in the name and for the
account of the supplier to a special tax office:


Finanzamt Graz Stadt
Referat für ausländische Unternehmer
Conrad von Hötzendorfstraße 14-18
8018 Graz
AUSTRIA

If the supplier does not meet the obligation, the recipient is liable.

Tax Relief for Import Chain Transaction

When there is a chain supply with three participants from a non EU country to
Austria, the goods are delivered “duty unpaid” and the transport is either arranged by
the first supplier or the middleman, the general rules are as follow:
The supply between the middleman and the recipient is subject to Austrian VAT. The
recipient has to pay the import VAT and the middleman is entitled to recover it ( see
Part 4/H).

If subsequent conditions are met, the supply by the middleman is exempted from
VAT and the recipient may recover VAT:

        the middleman has neither seat nor fixed establishment in Austria and is not
         registered for VAT purposes in Austria
        the invoice issued by the middleman must not show VAT
        the recipient is fully entitled to recover input tax

Relief to deduct Import VAT

If a Non EU resident taxable person imports material from a Non EU country to carry
out an installation supply in Austria and, the recipient is entitled to recover import
VAT when an invoice about the items is issued by the foreign business.
This material is eliminated from the tax base for the reverse charge supply between
the Non EU resident business and the Austrian recipient.




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L. Time of VAT Liability

Principally VAT liability arises at the end of the month when the supply of goods was
carried out or the supply of services was finished.

The VAT liability can be delayed for a month when the invoice is not issued in the
month of supply.

Payments in advance are subject to VAT at the end of the month the payment was
received. If a proper invoice is issued the input tax can be recovered at the same
time.

Subsequent groups have to account for VAT according to payment dates:

          architects, lawyers, tax consultants, certified auditors, translators and
other professionals
          businesses not being obliged to double-entry book keeping ( turnover not
more than € 700,000.00 per year)
          other activities (for example renting)- turnover in one of the last two years
not exceeding € 110,000.00

Supplies and VAT have to be recorded in the VAT return of the month the VAT
liability arises.

The due date of VAT is the 15th of the second month following the month concerned
(see Part 3/ A).




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Part 5 – Special Rules for Intra EU transactions
A. VAT Number

VAT Numbers are automatically issued by the Austrian tax offices to taxable persons
having the right to recover input tax.

        taxable persons, achieving solely tax excepted supplies with no right to
         recover input tax or
        farmers under the regime of the special flat tax ( see Part 6/A)
        Legal entities who are not taxable

get a VAT Number on application, proving they need it for EU transactions.

There is only one VAT Number for a taxable person, even if there are several plants
or subsidiaries.

Austrian VAT Numbers consist of:

AT-              country symbol
 U-              short cut for VAT
12345678         8 numerics

Checking the Vat Number works in the same way as in other EU countries:

Level 1 check - the answer is either valid or not valid


Level 2 check- the validity relating to a certain name and address are checked

Since 1 July 2011 the check must be done primarily electronically via Finanzonline.

Only if an access to the Internet is not available the request can be made to the
Austrian Central Liaison Office by phone or in written form.




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B- Intra EU Supplies of Goods

Supplies by Austrian Businesses to EU Consumers

Austrian businesses making supplies of goods to consumers (or other non-taxable
persons) who are residents of other EU countries must apply the distance selling
regulations of the respective country.

Supplies made during the course of a calendar year that amounts to less than the
distance selling threshold for the customer’s country should be subject to VAT at the
appropriate Austrian rate.

If, during the course of a calendar year, any of the distance selling thresholds in the
other EU countries are exceeded, the business must comply with the local VAT
registration and accounting requirements and cease the charging of Austrian VAT.

Supplies by Austrian Businesses to EU Businesses (B2B)

a. General

Austrian based suppliers that make supplies of goods to VAT registered businesses
in other EU countries must abide by the VAT regulations governing intra EU trade.

Such supplies are not subject to Austrian VAT provided that:

        the goods are dispatched or transported either by arrangement of the supplier
         or customer to another EU country
        the buyer must be a business customer having acquired the goods for
         business purposes or a non taxable legal entity or a legal entity having
         acquired the goods for non business purposes
        the acquisition of goods has to be taxable in another EU country.

The buyer has to notify his VAT Number to the supplier. The supplier hat to check the
VAT Number.
Documentation about the check of the VAT Number and evidence of transportation,
for example consignment note have to be kept.

The supply of new means of transport by a non taxable person to a non taxable
person in another EU country is also considered a tax free intra EU supply - details
see Chapter 5/C.
Here the supplier may recover the input tax of the purchase price of the car.


b Transfer of Own Goods

When an Austrian business transfers its own goods within the same legal entity but
the goods move from Austria to another EU country there is deemed to be a supply
of goods for VAT purposes. Contemporary movements ( see Part 5/C) are exempted.
The supply will therefore be treated as a normal intra EU supply provided that all the
conditions noted above are met. This means, in practice, that the Austrian business
would be obliged to register for VAT in the EU country to which the goods are
dispatched.




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c. European Sales Lists (ESLs)

Austrian businesses engaged in intra EU B2B supplies of goods and B2B services
will be obliged to compile and submit ESLs.

The filing periods and deadlines are as noted in Key Data and the information to be
supplied are described in Part 3/B.




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C. Goods – Intra EU Arrivals

Distance Selling

The sales of goods by non-resident businesses from other EU countries is regarded
as taking place in Austria under following conditions:

        the customer is a non business person or a person solely carrying out tax
         exempted supplies and the acquisition threshold in Austria (see below) is not
         met
        the seller arranges for the transportation
        the distance selling threshold is exceeded (see Part 1)

In these cases there is an obligation for VAT registration in Austria.

The threshold must be either exceeded in the previous calendar year or in the
relevant year. In the latter case the duty starts with the supply by which the threshold
is exceeded. If the distance selling threshold is not met, voluntary registration is
possible.

Note: The distance selling threshold does not apply when the goods being sold are
subject to excise duty (e.g. alcohol and tobacco products). Here VAT registrations
are immediately required.

Supplies Received by Austrian Businesses from EU Businesses

a. General

The delivery of goods from another EU country to Austria is subject to acquisition
VAT under certain conditions:

        the goods are dispatched or transported either by arrangement of the supplier
         or the customer from another EU country to Austria
        the buyer must be a business customer having acquired the goods for
         business purposes or a non taxable legal entity or a legal entity having
         acquired the goods for non business purposes
        the supplier must be a taxable person delivering the goods within the course
         of its business for consideration

The delivery of goods within the EU among non- private persons has the two sides:
from the view of the supplier it is an intra EU supply, see Part 5/B, from the view of
the recipient it is an intra EU acquisition.

If the recipient is entitled to recover input tax, the acquisition VAT need not be paid
by the recipient. It only has to be recorded in VAT return forms.

If the Austrian recipient only makes exempt supplies or if he is a non taxable legal
person or an agricultural enterprise being under the regime of the special flat tax for
farmers, acquisition VAT only becomes due if:

The acquisitions from all EU countries have exceeded the threshold of € 11,000.00 in
the past calendar year or in the present year. If the threshold is exceeded in the
present year, the duty starts with the import exceeding the threshold.
An option to taxation can be filed.



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b Transfer of Own Goods

Goods received in Austria that have been transferred within the same legal entity are
subject to the same rules as any other intra EU acquisition of goods. Contemporary
movements are exempted.

The most important examples of contemporary movements are transferring goods to
Austria:

        to carry out installation supplies or for distance selling
        to carry out an intra EU supply or an export
        to make a supply of services in Austria
        for process and repair if the goods are transported back after the procedure to
         the EU country of origin
        to stay in Austria for no longer than 24 months, if the goods would have been
         eligible for temporary import relief if imported from outside the EU.


Import of new means of transport from EU countries

VAT for new means of transport has to be paid in the country of destination.
Therefore the intra-Community acquisition of these goods is always due to
acquisition VAT whether the recipient is a business customer or a private person-
see also Chapter 5/B.

Following are regarded as means of transport, when they are intended for the
transport of persons or goods:

        motorized land vehicles with a capacity exceeding 48 cubic centimetres or
         the power exceeding 7.2 kilowatts
        vessels exceeding 7,5 meters in length.
        aircraft with a take-off weight of more than 1 550 kilograms

These means of transport are considered as ‘new’ in the cases

        of motorized land vehicles, where the supply takes place within six months of
         the date of first entry into service or where the vehicle has travelled for no
         more than 6000 kilometres
        of vessels, where the supply takes place within three months of the date of
         first entry into service or where the vessel has sailed for no more than 100
         hours
        of aircraft, where the supply takes place within three months of the date of
         first entry into service or where the aircraft has flown for no more than 40
         hours.




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D.       EU Triangulation

This term is used to describe the situation where a business in an EU country ( A )
wishes to buy goods from a supplier in another EU country ( B ) and sells them to a
business customer in a third EU country ( C ) and the goods are moved directly from
B to C.
It is a special form of chain supply (see Part 4/B).

Following the general rules among B and A a normal Intra community supply goes
on. The supply among A and C takes place in the country of C presumed that either
A or B arrange for the transportation. Therefore A would be obliged to register for
VAT in the country of C.

Austria makes use of the simplification procedures contained in Articles 141 and 197
of the Principal VAT Directive to enable A to avoid VAT registration in the country of
C. Furthermore A need not account for VAT in his invoice to C, the VAT liability is
shifted to C (reverse charge). The invoice of A must make reference to “Art 141 a-e
of Directive 2006/112/EC “.

In addition subsequent conditions must be met:

         only three persons are allowed to be part of the supply (A, B, and C)
         the supplier A and B have to be businesses , the recipient C may also be a
          non taxable legal entity or a legal entity having acquired the goods for non
          business purposes
         the persons have to be registered in three different EU countries and each
          one has to use the VAT Number of another EU country
         it is not necessary that the participants are resident in the EU
         the intermediate seller must not be resident in the country of destination
         the recipient has to be registered for VAT in the country of destination
         the goods must be transported directly from the supplier to the recipient, both
          countries must be EU countries
         Transport has to be arranged by the supplier or the intermediate seller

There is a special duty to the intermediate seller for recording in the European Sales
Lists, described in Part 3/B.




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E . Services

Besides the regime described in Part 4/C there are some special rules valid for
services within the EU:

Freight Transport for Consumers

An intra-EU transportation, beginning in one EU country and ending in another
deems to be carried out in the EU country, the transportation starts, if the customer
is a consumer.

Restaurant and Catering Services

On board of a ship, plane or a train during a transportation within the EU are carried
out at the point of departure.




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Part 6- Special Schemes
A. Flat Rate Scheme for Farmers

This scheme is applied to agricultural production enterprises being not obliged to
do double-entry book keeping.

The VAT rate is 10% for sales to consumers and, for sales to business customers, is
12%.

VAT and input tax is balanced by law so there is no VAT debt to pay.

Persons under this regime may issue invoices with separately shown VAT.
The customers can , if all conditions are fulfilled, recover input tax based on these
invoices.

For most liquids there is an additional tax, which has to be paid. It is 8% for sales to
business customers and 10% for sales to consumers. Water, milk , milk products
and the delivery of wine from farmstead are exempted.
Normal VAT taxation may be filed for.




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B. Tour Operators Margin Scheme
Austria operates a special margin scheme for travel agents and tour operators as
required by the EU Principal VAT Directive.

This scheme is compulsory not only for the taxable persons mentioned above, but
also for any business involved in the provision of relevant supplies, when subsequent
requirements are fulfilled:

        the travel agent must deal with the customer in his own name, intermediary
         services are not concerned
        the services must not be supplied to a business customer
        the travel agent must use supplies of goods or services provided by other
         taxable persons

If this scheme has to be used

        All supplies made in respect of EU destinations are treated as having been
         made in the country where the business is established or has a fixed
         establishment from which it operates.
        VAT is only applied to the margin between the VAT inclusive buying and
         selling prices.
        The standard VAT rate (20%) has to be charged to EU trips. Supplies carried
         out in non-EU countries are zero taxed.
        VAT charged to the travel agent by other taxable persons for supplies being
         directly associated with the services of the travel agent and which are for the
         direct benefit of the traveller is not deductible or refundable in any Member
         State. VAT incurred on overhead expenses can be claimed as normal.
        VAT invoices cannot be issued.




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C. Margin Scheme for Second Hand Goods

Austria operates a special margin scheme for dealers of second hand goods as
required by the EU Principal VAT Directive. The margin scheme enables the dealer
to account for VAT on the margin between buying and selling prices rather than the
full selling price of the goods.

Use of the scheme is optional and the main features are described below.

The criteria for use of the scheme are as follows:

        the goods must be movable, exempted are jewellery and precious metal, the
         most important examples are second hand vehicles, clothes, works of art and
         so forth
        the supplier must be a dealer
        the goods must have been acquired within the EU community; for antiques,
         works of art and collector’s items the margin system can also be applied
         when the reseller has imported them
        the goods must have been acquired with no VAT charge such as from a
         private individual, tax exempted person or another dealer that is selling the
         goods via the margin scheme
        the margin must be calculated in accordance with the rules of the scheme
        the VAT rate of 20% has to be applied

The margin scheme calculation rules specify that the selling price is the full amount
paid by the customer for the goods. From this is deducted the purchase price to
arrive at the margin. The VAT has to be subtracted out of the gross selling price.
VAT is calculated separately on each item as it is sold.

Invoices with separately shown VAT must not be issued.

A simplification is known as global accounting. In this case margin is not calculated
on each item sold. Instead it is calculated by deducting purchases from the value of
sales made in each VAT period.

If this calculation produces a positive margin it is multiplied by the VAT fraction to
determine the VAT due.

If the calculation produces a negative margin this cannot be carried forward to the
next period. But within the same year the positive and negative margins are
compensated by submitting the annual tax return. Not all used goods can be included
in global accounting. It applies only to used goods that have a purchase price of
€220.00 or less.




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Part 7 – Surcharges and Penalties
Surcharge for Late Payment

If VAT is not paid in due time, a surcharge for late payment amounting to 2% of the
VAT payable is levied. A second surcharge of 1% is assessed, if payment is not
made within three month after due date. There is a third surcharge amounting to 1%
if VAT is not paid within another three months period.

A surcharge of less than € 50.00 is not levied. The surcharge will not be imposed if
the delay does not exceed five days and the taxable business has settled all tax in
due time within the last six months preceding the late payment.

Surcharge of Late Filing

If the VAT return is not filed in due time, a surcharge for late filing up to 10% of the
VAT payable may be imposed .This surcharge is levied besides the surcharge of late
payment. A surcharge of less than € 50.00 will not be assessed.

The late filing of EC Sales Listings may cause a surcharge for late filing up to 1% of
the listed Intra-Community transaction. It must not exceed an amount of € 2,200.

Penalties

If VAT is not paid with intent until the fifth day after due date, a penalty may be
assessed up to half of the amount that had to be paid. Impunity may be achieved by
posting the VAT liability to the tax authority.

So a frequently given advice in Austria is to submit the monthly VAT return in time at
least if VAT cannot be paid in due time.

If the monthly tax returns are filled out wrongly or VAT is not paid at all with an
unconditional intent, knowing for sure that the tax was cut and the law is broken, one
could get instead a fine up to double amount that was cut or not paid.

The penalty for deliberately submitting wrong annual returns may reach up to double
the amount of VAT debt that was not declared. If this was done without intent but
carelessly, the maximum penalty is just the amount.




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Part 8 – Refunds of VAT to Foreign Businesses
A.       General

Foreign businesses maintaining a fixed establishment or carrying out taxable
transactions in Austria have to register for VAT purposes in Austria to get their input
tax refunded (see also Part 2/B). They have to do it by filling the recoverable input
tax in their VAT returns as the Austrians.

Foreign businesses without an establishment in Austria carrying out

        no taxable transactions or
        cross border transportation from/to non EU countries or
        sales covered by the reverse charge system or
        electronically supplied services to EU resident consumers and therefore being
         registered in one single EU country ( see Part.4/C)

may claim VAT refund without VAT registration .




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B. Refunds to EU Businesses

2010 an identical procedure was imposed in the EU. The home country had to
establish a single electronic point of contact. This portal must be used by businesses
resident in this country to apply for VAT refund in other EU countries. In Austria it can
be found on “Finanzonline”. There is one application to be filed digitally for each
country, which is transmitted electronically to the EU country concerned.

 To be refunded, input tax must be deductible according to the rules of the home
country and the foreign EU country. So for example VAT incurred on the purchase,
leasing or operation of passenger cars cannot be refunded even if such VAT is
deductible in homeland. VAT incorrectly charged , such as for tax free exports or
Intra community supplies can also not be reimbursed.

The deadline for application is September 30th of the following calendar year. For all
applications concerning 2009 this date was extended to 31 March 2011.

The filing of electronic copies of the invoices is not required in Austria. Additional
information may be requested also including original invoices or copies.

The tax authorities have to select the claim by issuing a notification and pay the
refund within about 4 months. If additional information is required it can last up to a 8
months period. If Austrian tax authority does not refund in time, interest up to 4% of
the amount is being paid.

The period of refund can be chosen from a 3 months period up to a calendar year.
In case of a three months period, the minimum VAT refunded has to amount to
€ 400.00. If recovery for the calendar year is claimed, VAT has to exceed € 50.00.




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C. Refunds to Non-EU Businesses

Businesses in non-EU countries that incur Austrian VAT on business expenditure
may claim a refund of this VAT.

Claims must be filed using the Formular U5 (available for download at
www.bmf.gv.at) and be accompanied by:

        all original invoices and import VAT assessments
        a certificate issued by the Tax Authority in the claimant’s country showing that
         the claimant is a registered business in that country, these certificates are
         only valid for one year.

Only VAT deductible according to Austrian law can be claimed (see Part 4/H).VAT
incorrectly charged (see Part 8/B) cannot be refunded.

The deadline for application is June 30th of the following calendar year.

Period of refund and minimum amount of refund are as described in Part B.




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                                                       44


                                                                                      Appendix A
Contents of VAT Invoice

                  Characteristics                                   Full    Less Detailed Invoice
                                                                    VAT     (supply  EUR 150.00)
                                                                  Invoice
Name, address and VAT number of
                                                                                    
supplier
Name and address of customer                                        
Customer VAT Number (invoices >€
                                                                    
10,000.00)
Invoice number                                                      
Time of supply                                                                      
Date of invoice                                                                     
Quantity and description of the supplied
                                                                                    
goods and services
Total charge excluding VAT                                          
Rate of VAT                                                                         
Total VAT charge (in Euro)                                          
Total payable including VAT                                                          
Statement confirming why VAT does not
                                                                    
apply




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