If you’re wondering how the VAT system works in Austria – what the rates are, when you need to register, and what it means in practice – this article will clear up all doubts. You’ll find concrete information: who must settle VAT in Austria, when and under what rules, how goods and services are classified, and what to expect in 2025. It’s an ideal guide for companies planning to operate in the Austrian market, as well as for private individuals who want to understand what makes up the price on a receipt.
How does VAT work in Austria?
In Austria, the value-added tax is called Umsatzsteuer, abbreviated USt. It works the same way as in many EU countries – you pay VAT in the price of a product or service, and businesses add VAT to their sales and settle it with the tax authorities.
For companies, this means understanding which VAT rate applies to a given product, when registration is required, and how to file returns. For customers, it helps explain why prices in Austria look the way they do.
VAT rates in Austria in 2025
Standard rate
The standard VAT rate in Austria is 20%. It applies to most products and services on the market – from electronics to clothing to various services.
Two reduced rates
There are also two reduced VAT rates:
13% – applies to cultural events, certain tourism services, animal transport, firewood, and more.
10% – applies to food, books, newspapers, medicines, residential rent, and public transport.
0% rate
Austria also applies a 0% VAT rate, mainly for exports and some intra-EU transactions. These are still taxable supplies, but no VAT is charged.
VAT in Austria – quick summary
20% – standard
13% – selected special goods/services
10% – food, books, press, medicines, etc.
0% – export and certain EU transactions
There are also two territorial exceptions – Jungholz and Mittelberg, where the applicable rate is 19%.
When do you need to register for VAT in Austria?
If you run a business and start operating in Austria, VAT registration may become necessary sooner than you think.
For Austrian companies, VAT registration becomes mandatory once annual turnover exceeds approx. EUR 55,000.
For foreign companies, the obligation often arises from the first transaction, especially if you sell goods or services directly in Austria, store goods there, or the reverse-charge mechanism does not apply.
More details can be found here: VAT registration in Austria.
Formalities after registration
Once you obtain a VAT number in Austria, further obligations arise – mainly regular VAT returns.
The reporting frequency depends on turnover: smaller companies may file quarterly, while larger ones file monthly.
Returns include output VAT (charged on sales) and input VAT (paid on purchases). The difference is either paid to the tax office or refunded.
VAT in Austria and the sale of goods/services
Not all sales are taxable. Austria applies several exemptions, including:
medical services
education
financial services
long-term residential rentals
Important: if your activity is VAT-exempt, you may not be able to deduct input VAT, which affects profitability.
Practical examples – which VAT rate applies?
Bread purchased in a store – 10%
Sale of electronics – 20%
Passenger transport – 10%
Concert organization – often 13%
Export of goods outside the EU – 0%
As you can see, proper classification is essential.
Updates for 2025
There are no major changes to the VAT system in Austria in 2025. The main rates remain 10%, 13%, 20%, plus the 0% rate.
However, details may vary – for example, the list of products taxed at 10% may change. If you operate an e-commerce business, use Austrian warehouses, or work within OSS, you should monitor local tax interpretations.
What should you remember?
VAT in Austria is clear but full of exceptions. The applicable rate depends on what you sell and to whom.
The standard is 20%, but many sectors use 13% or 10%. Add to this various exemptions and special cases such as 0% exports.
If you operate in Austria, take care of proper registration, classification, and reporting. You can do it yourself or rely on professional support.
Understanding Austrian VAT isn’t just a tax obligation – it’s a competitive advantage.