Austrian VAT Guidelines 2021 published
The yearly amendment to the Austrian VAT Guidelines (UStR) was published on 6 December 2021. Here we provide you with an overview of the most relevant changes:
Changes in connection with VAT groups
In items 233 and 241, the Guidelines have been amended to reflect CJEU case law regarding the cases M-GmbH (CJEU 15.4.2021, C-868/19) and Danske Bank (CJEU 11.3.2021, C-812/19).
In the M-GmbH case, the CJEU addressed the financial integration of partnerships. According to the CJEU, a financial integration of a partnership also exists in cases where, alongside the controlling company, there are additional shareholders of the partnership who are not financially integrated into the controlling company. The prerequisite is that the controlling company can impose its will on the partnership.
In the Danske Bank case (“reverse Skandia”), the CJEU had to adjudicate on how supplies between an EU headquarters and an EU fixed establishment should be assessed for VAT purposes if the headquarters is part of a VAT group. You can find further information in our tax newsletter of 15 March 2021 (only in German). According to the VAT Guidelines, non-taxable internal group revenues exist if the PE belongs to the controlling company “due to an absence of independent economic activity”. What practical implications this may have remains to be seen.
Transfer of roads to governments
Item 277 of the Guidelines incorporates further case law (CJEU 16.9.2020, C-528/19, Mitteldeutsche Hartstein Industrie, VwGH 8.9.2021, Ro 2020/15/0011, see our tax newsletter of 8 October 2020 (only in German)): Accordingly, in the case of prior input VAT deduction, the transfers of fixed assets into public ownership may lead to a taxation of these assets for “own use” if the fixed assets exclusively serve the needs of the muncipality.
Charging of electric cars
It has also been clarified in item 478 that the charging process for electronic cars constitutes a non-independent service that is ancillary to the supply of electricity.
Place of supply for “own use”
In the QM case (CJEU 20.1.2021, C-288/19), the CJEU has ruled that no supply for consideration exists in relation to the taxation of a benefit-in-kind when a car is made available free of charge to an employee. Further, if a car is made available free of charge to an employee, this also does not qualify as a lease of means of transport (rental services) from a VAT point of view. The place of supply rules for rental services therefore do not apply, meaning that the general provisions apply to determine the place of supply. In this context, the example in item 487 has been removed, in which reference was made to the same place of supply rules being applied as in the case of a supply for consideration. You can find further information in our tax newsletter of 5 February 2021 (only in German).
Place of supply for online events
In item 640n et seq., clarifications have been added regarding the place of supply for online events in the B2C area. The place of activities in B2C contexts is the place where the recipient is located. The assumption (which may be contested) is that this place is the same as the domicile of the recipient.
Change of place of supply for telecommunication services to recipients in third countries
In item 643, the CJEU ruling in the SK Telecom case (CJEU 15.4.2021, C-593/19), as well as the subsequent rulings of the VwGH (1.6.2021, Ro 2019/15/0011 and 0012) have been implemented: Accordingly, a telecommunications supply to a service recipient in a third country is always subject to Austrian VAT if this supply is used or processed in Austria, e.g. if a telephone call is made in Austria. Previously, taxation in the third country took priority, which is no longer the case. Please see our tax newsletter of 23 April 2021(only in German).
Differentiation of supplies of services connected with immovable property
The distinction between a supply of services connected with immovable property and a “normal” supply of services is not always simple. In practice, however, it is of relevance to the place of supply. In item 892, examples have been included in which the supply of services connected with immovable property is of lesser importance than the main supply. This may be the case, for example, when using shared office spaces, as well as when data centres offer hosting services.
Letting of property does not constitute a fixed establishment
Item 2601b has also been amended to reflect CJEU case law (CJEU 3.6.2021, C-931/19, Titanium, see our tax newsletter of 10 June 2021(only in German)) and will have significant consequences in practice. Previously, foreign taxable persons who let out immovable property in Austria subject to taxation were, in respect to their leased immovable property, treated in the same way as Austrian taxable persons. As a result, the tax liability was not transferred to the recipient of the service. From 1 January 2022, this will only apply if the foreign taxable person also has its own staff in Austria in connection with the supply of services, thus creating a fixed establishment.
Item 2602 states that the option of tax liability may be implemented by a corresponding statement on the invoice.
If a reverse charge procedure was applied prior to 1 January 2022, this is not expected to be challenged – except in cases of improper use (abuse of rights).
Changes in connection with travel services
CJEU case law (27.1.2021, C-787/19, Kom/Österreich) demanded the amendment of Section 23 Austrian VAT Act to ensure that margin taxation for supplies of travel services from 1 January 2022 will also apply in the B2B area. Following the amendment decree, corresponding changes will be made in the Austrian VAT Guidelines. Margin taxation continues to only apply to supplies made as an ‘undisclosed agent’ (the service provider acts in its own name but on the account of another person). Self-supplies and supplies where the service provider acts as intermediary are not affected. In addition, the simplifications regarding the calculation of the margin have been removed.
