VAT for associations

Non-profit associations (→ oesterreich.gv.at) (with the exception of sporting associations, which are, in principle, exempt from VAT) may be subject to VAT if they pursue entrepreneurial activities. The reduced tax rate of 10 per cent applies to them.

Where, however, the association does not make a profit in the long term, the association’s activity is classed as a ‘hobby’ and is not, in principle, subject to the obligation to pay VAT; the option to deduct tax is therefore also not available.

The ‘hobby assumption’ can be refuted where evidence of balanced accounts is provided. In this case, revenue must equal expenditure, including the (project-related) subsidies, but not including donations and membership fees.

The VAT must be calculated by the association itself and paid to the tax office (→ BMF)^{German text}.

Associations acting purely at association level – without exchanging services and without the intention of earning revenue – are not, in principle, liable to pay VAT. Genuine membership fees and donations or subsidies are not subject to VAT either, provided that the association does not pay any direct consideration.

Further links

• Austrian Chamber of Accountants and Tax Consultants (→ KSW)^{German text}
• "Associations and taxes" brochure (→ BMF)^{German text}