The provisions for the location of the other services – and therefore taxation thereof – essentially depend on whether or not the recipient of the service is an entrepreneur (section 3a paragraph 5 of the Umsatzsteuergesetz (UStG- Austrian Value Added Tax Act). According to this law, where the recipient is an enterprise, a service (other service) is essentially carried out at the place where the enterprise operates its business and where its establishment is located (section 3a paragraph 6 UStG). Where the recipient is a non-entrepreneur, the service is, in principle, carried out at the place where the enterprise providing the service operates its business (establishment) (section 3a paragraph 7 UStG).
In case of cross-border services the enterprise recieving the service is obliged to notify the business providing the service of its VAT registration number. Where cross-border services are provided to an enterprise in a Member State, the tax liability is generally transferred to the recipient of the service (Reverse Charge).
Services in respect of which the tax liability must be transferred to the enterprise receiving the service in accordance with article 196 of the VAT Council Directive 2006/112/EC (Reverse Charge) are to be recorded in the recapitulative Statement (RS) by the enterprise providing the service. This includes all services in respect of which tax is payable in accordance with the general rule in another Member State pursuant to section 3a paragraph 6 UStG (at the place of receipt). These are:
- carriage of goods between enterprises
- services that are ancillary to this carriage
- work on movable tangible property
- ‘catalogue goods’ (section 3a paragraph 14 UStG) to customers from the EU
- intermediary services
- services to procure the other services listed here
- services provided electronically
There are some exceptions, where the place of performance of the service is not in line with the above principle, such as, for example, in the case of the carriage of passengers or services connected to immoveable property. These services, which are listed by way of example, and those services provided to non-entrepreneurs without a VAT registration number do not have to be recorded in the recapitulative statement.
Where the service is provided in another Member State, the enterprise providing the service can, in principle, rely on the fact that the tax liability also transfers to the recipient of the service in this other Member State (reverse charge system); this also applies reciprocally in Austria in cases where services are provided by a foreign enterprise.
Where invoices are issued in the context of the reverse charge system, which must be done by the 15th day of the calendar month following the provision of the service, the following information must be provided (section 11 paragraph 1a UStG):
- information on transfer of tax liability to the recipient of the service
- indication of the VAT registration number of the enterprise performing the service and its business customer
- the regulations on separate disclosure of taxes do not apply
Services provided electronically, telecommunications, radio and television services
Services provided electronically, telecommunications, radio and television services (TBE services) are generally taxable at the service recipient’s location (recipient location). This applies regardless of whether the services are B2B services to business operators (section 3a, paragraph 6 UStG) or B2C services to non-business users (section 3a, paragraph 13 UStG). Microenterprises are exempted from taxation at the recipient location.
If services are being taxed at the recipient location, businesses must determine for each individual service where the customer is located. To limit the time and effort required to determine the recipient location, there are EU-wide recipient location assumptions. In addition, the value added tax payable in other EU Member States on TBE services provided to consumers can be declared via the Value Added Tax One Stop Shop.
Recipient location assumptions
If TBE services can only be received at a specific location, and if reception of the service requires the physical presence of the service recipient (e.g. for telephone booths or with the free provision of internet access through WLAN hotspots, internet cafés, etc.), it is assumed that the service recipient is based in that location.
If the services are provided via a landline connection, it is assumed that the recipient location is situated at the landline connection point.
When services are provided over mobile networks, the country code of the SIM card is the definitive factor.
If a decoder, programme card or satellite card (e.g. for radio services) is needed to receive the services, the assumption applies that the recipient location is the place in which this device or card is located. If that location is not known, it is assumed that the service location is at the address to which the programme or satellite card was sent.
In all other cases, two non-contradictory forms of proof will suffice for the business to determine the recipient location. Proofs can include the billing address, IP address or bank details, as well as any other business-relevant information.
The tax office may refute these assumptions if there is evidence of incorrect or improper use of the assumptions by the service provider.
Service provider assumption
For electronically provided other services and for telephone services provided over the internet, it is presumed that an enterprise involved in service provision is operating in its own name but for the account of another (‘provider’) and must therefore be regarded as a service provider vis-a-vis its respective customer if the service is provided over a telecommunications network, an interface or a portal (e.g. via an app store). This assumption is refutable under the following cumulative conditions (Article 9a Regulation (EU) 282/2011, as amended by Regulation (EU) 1042/2013):
- All invoices/receipts must show the service and its service provider;
- the business involved in provision of the service
- authorises or approves neither the provision of this service nor billing with the service recipient and
- does not define the general terms and conditions for provision of the service;
- this is expressed in the contractual agreements between the parties.
A business involved in service provision would be, for example, a telecommunications company that on the one hand bills the end consumer for the electronically provided service while simultaneously providing that consumer with a telecommunications network in return.
For simplification purposes, tax on TBE services provided to non-entrepreneurs by micro business owners, is to be paid not at the recipient location but rather at the place of business (section 3a paragraph 5 UStG). Micro business owners are understood to include enterprises which
- are operated in only one EU Member State and do not own any establishments in any other Member State and
- have not exceeded the applicable turnover limit of 10 000 Euro.
All TBE services to non-entrepreneurs resident in other Member States as well as intra-community distance sales must be taken into account when calculating the 10 000 Euro turnover limit. Where the relevant turnover or that in the current calendar year exceeds the threshold value of 10 000 Euro or the enterprise providing the service does not apply the new threshold regulations, tax is to be paid on the turnover at the place of receipt in accordance with section 3a paragraph 13 UStG. Any waiver must be brought in writing within the deadline for submitting an advance return for the preliminary notification period of a calendar year in which such a service is provided for the first time, and is binding upon the enterprise for at least two calendar years. The written declaration can also be made by recording turnover via a declaration in the One Stop Shop (see Austrian VAT Directive 2000, paragraph 3918 and following).
With effect from 1 July 2021, when calculating the turnover limit for micro businesses, intra-Community distance sales in which goods are delivered to another EU Member State are also to be included in addition to the TBE services.
An electronic service is a service that is provided over the internet or a similar electronic network, the provision of which is by its nature essentially automated and entails only limited human involvement, and which is not possible without information technology.
Electronic services include:
- Provision of websites, web hosting, online data warehousing (electronic data storage and retrieval)
- Provision of software and updates
- Provision of images, texts and information (E-books, online newspapers)
- Provision of databases (e.g. search engines)
- Provision of music, films and games, including gambling and lotteries, as well as broadcasts and events from the areas of politics, culture, arts, sports, science, and entertainment
- Provision of electronic distance learning services
Services not considered electronic services include:
- Deliveries based on electronic orders
- Deliveries of physical data media (e.g. CD-ROMs, CDs, diskettes, DVDs, etc.)
- Deliveries of printed matter and games on CD-ROMs
- Non-automated distance learning
- Repairs to IT equipment
- Communications via email (including consulting services)
- Internet access and videophone use
- Commission Explanations on the Place of Performance for TBE Services (→ EC)
- Commission Guidelines and Guide to the One Stop Shop (→ EC)
- EU Value Added Tax One Stop Shop (Legal situation until 30 June 2021) (→ BMF)German text
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