Input VAT deduction on expenses from company outings

Due to the amendment of Section 23 Austrian VAT Act (UStG), the tolerance limit for input VAT deduction for travel-related input supplies for company outings (away days) has ceased to apply.

Company outings fall under the scope of Sec 23 UStG and are thus attributable to travel-related supplies from a VAT perspective. Travel-related supplies are generally subject to margin taxation. Accordingly, expenses in connection with travel-related supplies are not eligible for input VAT deduction.

Previously, Austrian legislation included a simplification rule or tolerance limit for input VAT deduction from travel-related input supplies in connection with company outings. Accordingly, a company outing was deemed to have a business purpose and the non-applicability of Sec 23 UStG could be substantiated, provided that travel-related input supplies amounted to maximum EUR 100 per employee per year.

The tolerance limit ceased to apply following the amendment of Sec 23 UStG, effective from 1 January 2022. This means that from now on no input VAT deduction is possible for travel-related input supplies in connection with company outings.

There are no changes or implications for wage and income tax purposes.