Registering for Value Added Tax (VAT) with the tax authorities is compulsory, before commencing business activities. Companies that fail to apply in time may receive financial penalties depending on the time of application. Every business that is directly or indirectly conducted within the territory must register for it on the sales of all products sold or services rendered.
Eligibility
A business that stores goods, sells them to locally based customers, and whose sales exceed the domestic VAT threshold in the country, must register. Such business may have to register for it in other EU countries provided it sells products to residents living there. A company in a different EU country must register if it stores its products, sell to Austrians, and make sales that exceed the Austrian distance selling VAT threshold of €35,000. For a corporation oversees which sells products stored in an EU country to Austrians, paying VAT is compulsory.
Types
There are four types of VAT charged at specific rates on the sales of goods here. Standard tax value added tax rate applies to all goods and services taxable, and a 13 percent Reduced is charged on domestic flights, some agricultural supplies, wine production, etc. 10% Reduced applies to foodstuffs, pharmaceutical products, and printed books, amongst others, while 0 percent is charged on internal transport, hotel accommodation, etc. Processing Time
Provided you have every required document, and the application is correctly filed, it takes a month to obtain a VAT number.
Documents required
A company is required to submit the following documents:
- Registration form(s) duly filled
- Certified copy of the articles of association
- Extract from the trade register
- Certificate of VAT liability
- Power of attorney (in case a fiscal agent is hired), et cetera
Deadline for paying
Every business must pay their value-added tax when due, as well as the VAT return. Failure to do this on time will attract the interest of at least 2 percent of the net tax.
Thresholds of value added tax
A threshold of €35,000 per annum applies to VAT-registered companies in the EU who sell goods via the internet to customers here. Foreign businesses trading in the state that have registered for VAT/GST/Tax in their local state, have no registration threshold.
VAT returns
All registered companies with a turnover above EUR 100,000 file monthly. Those with a turnover between EUR 30,000 to EUR 100,000 file quarterly. Businesses with a turnover lower than EUR 30,000 are exempted. Howsoever, all companies must file an annual return.
When to file a VAT return
You must file provisional returns monthly, provided the annual turnover of the preceding year is above EUR 100,000. It should be filed electronically on the 15th day of the second month following the tax period to which it relates. The annual statement must be filed by April 30th of the following year or by June 30th of the next calendar year via electronic filing through “FinanzOnline”.
Hiring A fiscal representative
Foreign businesses from non-EU member states cannot register themselves but through a representative. The representative is a local company that will stand in for your company to the VAT authorities and takes charge of all VAT obligations. European companies do not need to hire a representative. However, to facilitate smooth relations with the local tax authorities, they can choose to hire an agent to carry out all tax formalities on their behalf. They are solely responsible for paying all VAT debts.
