Anyone who sells his products to Austria had to register for VAT there as soon as the annual VAT registration threshold was reached. This regulation changed in July 2021. Find out when the annual turnover is too high and this VAT threshold is reached and what to do in this article.
Antonia Klatt
Last Updated on 22 October 2021
Tax Threshold Austria
Up until July 2021, anyone who reaches the annual VAT threshold of a country via mail order through product sales, in this case Austria, was obliged to register for a country-specific VAT identification number.
Since July 2021, distance sellers need to register for an austrian VAT identification number, if they are selling to Austria and if their sales exceed the new EU-wide threshold for distance selling of € 10,000, as country-specific VAT thresholds were abolished. If a seller is only selling goods an services to Austria, that means that the threshold has been significantly lowered. Sales below the mark are still taxed at their local VAT rate and VAT is paid in the home country of their business. But as soon as distance sales exceed the now lower EU-wide threshold, VAT is due in Austria and austrian VAT rates need to used. In this case, you also need to register for VAT there.
Exceeding the VAT threshold
Reaching the VAT threshold means having reached a certain annual turnover which makes registering for VAT necessary in the country of import. Concretely, this meant that as soon as the annual limit was reached within a calendar year by sales of goods to a specific state, the country-specific VAT threshold was considered exceeded and a VAT registration in that country became mandatory.
The VAT threshold limit in Austria was 35,000€. If your annual sales to Austria were below this value, you paid tax on your goods in Germany. However, if you made 35,000€ or more in Austria, you had to get an austrian VAT number and pay it there. This changed in July 2021.
If the registration threshold limit is not reached, neither a registration nor a tax number is required in Austria. In addition to a VAT registration, once the EU-wide limit is reached, the seller will have to deal with issues such as advance returns, regular filings and other issues. In order to not be surprised by these duties, it is advisable to always keep an eye on your sales in Europe.
NOTE: For the VAT threshold, the net turnover of the imported goods is always the decisive factor.
VAT in Austria
The whole VAT thing can easily be explained by means of an example. Suppose a German seller sells stand mixers throughout Europe. If he sold a total of 20,000€ in Austria in his first year, he paid VAT in Germany as usual.
However, if in the second year he reached 40.000€ turnover with customers in Austria, he had exceeded the Austrian VAT threshold of 35.000€ and had to be registered for VAT on site and also pay VAT to the austrian authorities. As mentioned before, this also means returns, filings, and more.
Since the new EU-wide VAT threshold is only 10,000€ and a sales total of 20,000€ already exceeds that limit the German seller needs to register for VAT in Austria in the beginning of the first year. Registration for VAT and filing of VAT returns in Austria are also necessary. The first 10,000€ are taxed with the german VAT rate and VAT needs to be paid in Germany. However, the 10,001st and each additional € must be taxed with the austrian VAT rate and VAT is due in Austria.
Platforms for online sellers such as Amazon or Ebay attach more and more importance to ensuring that active sellers are registered properly. That’s why some operators, such as Amazon, require tax proofs such as the F22-Certificate in Germany or, also since July 2021, the VAT Identification Number.
Without the right processes, it can easily happen that the exceeding of a delivery threshold is sometimes overlooked. If this is the case, there is the threat of high penalties. This makes it all the more important to always be in the picture about the current sales and VAT thresholds.
The new regulations have simplified the process a little bit, since only one single combined threshold is not decicive. However it’s also important to remember, that the new VAT threshold of € 10,000 applies across the EU. As soon as this threshold is reached across the board, for example through sales to Poland, France and Germany, VAT registration is due in all of these countries at the same time. If the crossing of the threshold comes at a surprise, the arising VAT duties can be overwhelming.
The hellotax VAT tool keeps an eye on sales and thresholds and warns traders in good time before the limits are reached. And this is only a small part of what our software can do for you!
We can also help with registration for the one-stop shop or “OSS” process. When using OSS, the EU-wide VAT threshold does not apply at all. However, the VAT registration, filings of returns, and payment of VAT in several countries at the same time are significantly simplified.
