Reduction of VAT rate to 5% in selected industries

13/07/20

Reduction of VAT rate to 5% in selected industries

To support the hospitality, cultural and publishing industries in Austria, which have been particularly affected by the COVID-19 crisis, a reduced VAT rate of 5% has been introduced for specific items for a limited period. The reduced rate applies from 1 July 2020 until 31 December 2020.

Hospitality (food and drink)

The VAT on all meals and drinks are reduced to 5% if a trade registration for the restaurant trade is required for the sale. Activities for which no demonstration of specific competencies is required in accordance with the trade regulations (e.g. mountain refuge huts) are also eligible for the reduced VAT rate. Furthermore, the 5% VAT rate for the restaurant industry also applies to butchers and bakeries.

Hotels and campsites

The reduced VAT rate of 5% applies to:

the provision of furnished accommodation and bedrooms (including provision of a standard breakfast),
the rental (lease for use) of land for camping purposes.

Publishing industry

For the publishing industry the 5% VAT rate applies to supplies, imports and intra-EU acquisitions of the following goods:

Printed books, brochures, leaflets and similar printed matter, whether or not in single sheets, as well as dictionaries and encyclopedias
Newspapers, journals and periodicals, whether or not illustrated or containing advertising material
Children’s picture, drawing or colouring books
Music, printed or in manuscript, whether or not bound or illustrated
Maps and similar charts of all kinds, including wall maps, topographical plans and globes, printed

The reduced VAT rate also applies to electronic publications, such as e-books, e-papers and similar.

Art and culture

a) Specific artistic goods

A reduced 5% VAT rate applies as follows:

Imports of artistic goods, specifically:

Paintings (e.g. oil paintings, watercolours and pastels) and drawings executed entirely by hand, other than drawings under heading 4906 00 00 of the Combined Nomenclature, and other than hand-painted or hand-decorated manufactured articles; collages and similar decorative plaques;
Original engravings, prints or lithographs;
Original sculptures or statuary, in any material;
Hand-woven tapestries following original designs of artists, with a maximum of eight copies of each work;
Textile items for use on walls following original designs of artists, with a maximum of eight copies of each work.

The reduced VAT rate also applies to supplies and intra-EU acquisitions of the artistic goods listed above if they are either:

made by the creator of the goods or his/her legal successor, or
made by a taxable person who is not a reseller, if this person has either imported the goods independently, or has acquired them from the creator of the goods or his/her legal successors, or was entitled to a full refund of input VAT for the acquisition.

b) Photographs taken by artists

Imports of photographs taken by artists, prints of which have been made by or under the supervision of the artist, and which have been signed and numbered by the artist, are subject to the reduced VAT rate of 5% if the total number of prints (includes all formats and materials) does not exceed 30.

Supplies of such photographs are also subject to the 5% VAT rate if they are:

made by the creator of the goods or his/her legal successor, or
made by a taxable person who is not a reseller, if this person has either imported the goods independently, or has acquired them from the creator of the goods or his/her legal successors, or was entitled to a full refund of input VAT for the acquisition.

c) Cultural and artistic activities

The 5% VAT rate further applies to the following transactions:

Sales from activities as an artist,
Sales from operation of a theatre and, accordingly, theatre performances arranged by other taxable persons,
Musical and singing performances by individuals or by groups, particularly orchestras, musical ensembles and choirs. Accordingly, this also applies to events featuring musical and singing performances arranged by other taxable persons,
Sales from the operation of a museum, a botanical garden or zoo, as well as nature parks,
Film screenings,
Circus performances as well as fees for activities as a fairground worker/operator.

Issuing of invoices

According to the Ministry of Finance, it is acceptable if the reduced VAT rate of 5% is indicated by a corresponding written note made on the receipt, or a correction by hand, or a correction using a stamp on the receipt. According to the Ministry of Finance, this approach suffices to fulfil all legal requirements for the issue of receipts in accordance with Austrian cash register regulations from the perspective of the tax authorities.

Author: Alexandra Hainz

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Copyright and Publisher: PwC Österreich GmbH Wirtschaftsprüfungsgesellschaft, Donau-City-Straße 7, 1220 Vienna, Austria

Editor: Eva Ebner, eva.ebner@pwc.com

The above information is intended to provide general guidance only. It should not be used as a substitute for professional advice or as the basis for decisions or actions without prior consultation with your advisors. While every care has been taken in the preparation of the publication, no liability is accepted for any statement, option, error or omission.

PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.

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