Input tax deduction
In accordance with section 12 of the Umsatzsteuergesetz (UStG), an entrepreneur is only able to claim input tax amounts for services (deliveries or services) that are carried out on behalf of their company domestically (in Austria) and that are shown separately in an invoice to him/her as taxes. The invoice must also comply with the requirements in section 11 of the UStG for input tax deduction to be granted.
Among other things, input tax deduction cannot be claimed for:
Input tax from advance travel services
Advance travel services are those deliveries and other services provided to third parties by an entrepreneur as part of travel services within the meaning of section 23 paragraph 1 of the UStG (margin taxation) and that directly benefit the traveller (e.g. hotel accommodation).
Input taxes from advance travel services are not deductible pursuant to section 23 paragraph 8 of the UStG.
More information on travel services can be found in Rz 2941 an following of the Umsatzsteuerrichtlinien 2000.
Private lifestyle expenditure
Input tax may not be deducted from private lifestyle expenditure (e.g. entertainment expenses) either.
Input tax may only be deducted from business meal expenses where it can be demonstrated that these meals were for advertising purposes and far outweighed the professional or business-related reason. See Rz 4823 of the Einkommensteuerrichtlinien 2000 for details regarding the evidence of the advertising purpose and the predominant professional or business-related reason
Expenditure associated with cars, estate cars or motorcycles
No input tax may be claimed for cars, estate cars and motorcycles (including those with sidecars), nor may it be claimed when purchasing (manufacturing) or renting or in the case of ongoing running or maintenance costs (e.g. fuel, servicing, repair, toll charges, parking), since these services are not provided on behalf of the company pursuant to the law.
Exceptions to the input tax exclusion are, however, driving school vehicles, demonstration vehicles and vehicles that are intended exclusively for commercial resale, and those vehicles which are used for commercial transport of persons or commercial leasing at least 80 per cent of the time.
This also applies to cars or estate cars with CO2 emission values of 0 grams per kilometre (e.g. cars or estate cars with exclusively electric or electro-hydraulic engines).
Input tax that is accrued in connection with vehicles, not only cars, estate cars or motorcycles but also, for example, lorries or minibuses, can be deducted provided that the other statutory requirements for tax deduction are met.
The regulation of the Federal Ministry of Finance on the tax classification of vehicles as vans and minibuses (BGBl II No 193/2002), which was issued in this regard, reveals the relevant conditions for the classification of a vehicle into the vehicle categories for which input tax may be deducted. In principle, evidence of whether these requirements are met for a specific vehicle would therefore be provided by the person liable for taxation, who is claiming input tax deduction for a particular vehicle. In the interests of legal certainty and administrative simplification, the Federal Ministry of Finance does, however, recognise specific vehicle types such as vans, delivery vans, flatbed trucks and small buses within the meaning of this regulation. The burden of evidence for these types of vehicles lies with the person liable for taxation.
Where tax deduction is claimed for vehicles eligible for tax deduction, in order to expedite proceedings - in particular during the VAT refund procedure - it is recommended that documents (copy of vehicle registration document/data sheet/vehicle log book) are submitted together with the original invoices when the application is made; these documents will show that the vehicle is not excluded from the right to deduct tax.
More information on input tax deduction can be found in the Umsatzsteuerrichtlinien 2000, Rz 1801 and following and in particular Rz 1914 and following.
- Sections 11, 12 and 23 of the Umsatzsteuergesetz
- Verordnung über die steuerliche Einstufung von Fahrzeugen als Kleinlastkraftwagen und Kleinbusse
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