Reverse-charge
This section provides information on the reverse charge system and its application.
What is meant by “reverse-charge”?
Reverse-charge means that under certain conditions the liability to pay the VAT is shifted to the recipient. The recipient has to calculate and pay the VAT on the transaction. He has to announce that tax in his tax returns, and he is allowed to deduct that VAT under certain conditions.
When does the “reverse-charge system” apply?
In Austria, the reverse-charge system applies in the following situations:
1. if a foreign taxable person
- supplies goods that are assembled in Austria or
- supplies services (except for tolerating the use of toll roads, supplies of services according to Sec 3a para 11a Austrian VAT Act 1994 and letting of property)
and if the recipient is
- a taxable person or
- a legal person;
2. if a foreign taxable person supplies construction works that can be regarded as a supply of goods assembled in Austria
- to a taxable person or
- to a legal person;
3. if a foreign taxable person supplies
- gas through a natural gas system or
- electricity or
- heat or cooling energy through heating and cooling networks
in Austria and
- the recipient is a taxable person who is identified for VAT purposes in Austria;
4. if a foreign taxable person supplies
- goods provided as security by one taxable person to another in execution of that security,
- goods following the cession of a reservation of ownership to an assignee and the exercising of this right by the assignee,
- immovable property sold by a judgment debtor in a compulsory sale procedure;
Who is deemed to be a foreign taxable person?
A foreign taxable person is a taxable person
- without fixed establishment in Austria or
- with fixed establishment in Austria that does not intervene in the concerned transaction