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Austrian COVID-19 Tax Amendment Act – amendments of the VAT Act and the Car Registration Tax Act

27/11/20

On 20 November 2020, the legislative motion for the COVID-19 Tax Amendment Act and the legislative motion for the amendment of the Car Registration Tax Act were introduced in the Austrian National Council. The legislation should be passed by the Parliament in December. The draft legislation contains the following amendments of the VAT Act and the Car Registration Tax Act:

Withdrawal of the United Kingdom from the European Union

On 31 December 2020, the transition period agreed under the withdrawal agreement between the United Kingdom and the European Union will come to an end, but the UK shall continue to be treated as part of the EU for the following purposes:

  • In relation to the supply of goods, Northern Ireland shall continue to be treated as part of the EU. For participation in the common market, traders in Northern Ireland will receive a VAT number with the prefix “XI”.
  • For supplies of goods made from the UK to Austria, and vice versa, which started before 1 January 2021 and ended after 31 December 2020.
  • For the rights and obligations of taxable persons in relation to transactions with a cross-border element that took place before 1 January 2021 (applies until 31 December 2025).

Refund applications that relate to VAT for taxable persons established in the UK must be submitted by 31 March 2021 at the latest.

Adjustments and explanations of transactions with UK VAT via Mini One Stop Shop (MOSS) or eVAT must be submitted by 31 December 2021 at the latest for transactions which took place before 1 January 2021.

E-commerce package

The entry into force of the measures of the e-commerce package will be postponed until 1 July 2021. Pre-registration for the One Stop Shop (OSS) will begin from 1 April 2021.

Reduced tax rate

From 1 January 2021, a reduced tax rate of 10% shall apply – indefinitely – to repair services (including adjustments and alterations) of bicycles, shoes, leather goods, clothes, and household linen. The change does not apply to supplies of goods (e.g. of spare parts) or work-supply, if the material value constitutes at least 50% of the fee.

The applicability of the reduced tax rate of 5% for hotels and campsites, restaurants, publishing and cultural and artistic activities will be extended until 31 December 2021. In the area of publishing, however, the extension will not apply to newspapers and other periodicals.

Tax exemption for COVID-19 in-vitro diagnostic medical devices and COVID-19 vaccines

An exemption will be introduced for the supply, intra-EU acquisition and import of COVID-19 in-vitro diagnostic medical devices (testing kits) and COVID-19 vaccines, as well as the supply of services closely linked to such devices or vaccines. For the taxable person, there will be an option to waive the applicability of the tax exemption. These rules will apply temporarily until 31 December 2022. The date of entry into force of these rules is still unclear because the EU legislation underlying the tax exemption (Proposal for a Council Directive, COM(2020) 688 final) is still pending.

Amendments to the Car Registration Tax Act

The legislative motion for the amendment of the Car Registration Tax Act contains, among others, changes regarding the terms “motor vehicle”, the tax exemptions, and significant amendments regarding the determination of the tariff, the CO2 deduction amount, the penalty threshold, and the penalty amount.

The amendments to the car registration tax Act will enter into force on 1 July 2021. The amendments do not cover vehicles for which an irrevocable written purchase agreement was concluded before 1 June 2021, and the supply or intra-EU acquisition of which takes place before 1 November 2021.

Author: Selina Siller

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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.

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