Austria’s small business VAT exemption is available to businesses whose relevant annual turnover does not exceed the statutory threshold.
It may apply, in particular, to sole traders, freelancers and other businesses. The legal form alone is not decisive. The business must also meet the applicable statutory requirements. Where a business carries out several activities or earns income from different sources, it must determine which turnover is relevant and whether the total business turnover remains within the limit.
The relevant turnover threshold is €55,000. As a general rule, the turnover of the entire business is considered, rather than the turnover from only one customer, project or business activity.
A business using the exemption generally does not charge VAT on exempt transactions. In return, it generally cannot deduct input VAT relating to those transactions.
The exemption does not automatically apply to every type of transaction. Special rules may apply to certain services, cross-border supplies, intra-EU transactions, reverse-charge transactions and other specific cases.
If the €55,000 threshold is exceeded by no more than 10%, the exemption can generally continue until the end of the current calendar year. Standard VAT obligations generally apply from the beginning of the following year.
If turnover exceeds €60,500, the exemption ends during the current year. VAT generally becomes chargeable from the transaction that causes the tolerance threshold to be exceeded.
Businesses using the exemption should therefore monitor not only their previous-year turnover, but also their current turnover and the nature of their services.
