From 13% to 10% from 1st November 2018
Almost three years after the tax reform in 2015/16 and the associated increase in VAT on accommodation from 10% to 13%, there is cause for joy for Austrian accommodation providers. From 1st November 2018, a uniform VAT rate of 10% applies to food and lodgings. The previously applicable tax split of 10% and 13% on food and lodging becomes obsolete.
The reduction of VAT applies:
- To all accommodation providers in Austria.
- For all businesses that charge a rental fee for camping.
What does the reduction in Sales Tax mean for accommodation provider?
- Invoices created and completed before change to the tax rate comes into effect are unaffected.
- For invoices created after the tax rate changes, accommodation charges must be correctly allocated with the new tax rate of 10%.
- For stays on 31st October to 1st November 2018, the accommodation charge is subject to the reduced tax rate of 10%, as this one night is considered as posted at the completion of the night.
- For bookings that span over several nights where the new tax rate comes into effect: for the first night, e.g. 30th October to 31st October, 13% VAT applies. For subsequent nights, e.g. 31st October to 2nd November 2018, 10% VAT applies. The bill has to be split: The night from 30th October to 31st October 2018 will be completed/created by 31st October at the latest and the accommodation will be taxed at 13%. The nights from 31st October to 2nd November will be charged from 13% to 10% after the reduction and conversion of the tax.
- Services (in accordance with VAT Guidelines Section 10.3.3.3. “All-Inclusive” Rz13733), which are considered regular services associated with the stay (e.g. welcome drink or sauna), continue to use the regular services aspect of the Sales Tax, at 10%.
- Accommodation tariffs that include a food/service aspect such as breakfast will be taxed at 10% from the 1st November 2018.
- Advance payments are always subject to the tax rate that will apply at the time the service is provided. If a guest books in March 2018 for a two night stay from 1st November to 3rd November 2018 for 600 euros and the deposit (50%) 300 euros is paid at the time of booking, i.e. 300 euros paid in advance in March, taxed at 13%. If the down payment of 300 euros was taxed at 13%, the difference (3%) of the VAT can be adjusted in the case of tax equalization. For more information, please contact your tax advisor.
JULIA creates your invoices?
For easybooking customers who already work with JULIA, our academy has created an illustrated guide showing the settings that you must change so that JULIA can continue to create your invoices correctly and automatically send them to your guests:
Are you looking for help with this?
If the above sounds complicated and you are looking for a solution to help with time-consuming administrative tasks? We can help with that! Find out more about the advantages of using JULIA for your accommodation business using this link > I would like to receive more information about JULIA, the virtual receptionist.