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VAT in Austria 2026: what self-employed people actually have to charge

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You'll hear wildly different things from other freelancers: one never charges VAT, another claims back thousands of euros a year. Both can be right – it just depends which situation you're in.

As of: November 2026 · Reviewed by Pascal Schraml, Austrian certified tax advisor (Steuerberater), founder of PSTax

Is the small-business exemption right for you? → Small-business VAT exemption guideSoon

VAT is never your money

You add it to your invoice, collect it from your client, and pass it on to the tax office. Economically, you're not the one paying it – your client is.

Example: you invoice €1,000 net + €200 VAT, your business client pays €1,200 gross. You pass the €200 on to the tax office, your client claims it back as input tax. Net effect for a business client: €0. The only people who actually pay VAT are private end consumers, who get nothing back.

How much is VAT in Austria?

The standard rate is 20%, with reduced rates of 10% or 13% for certain services. That's unchanged for 2025 and 2026; from 1 July 2026 a new 4.9% rate applies to selected basic foods – not relevant for most freelance services.

Input tax deduction (Vorsteuerabzug): your offset for buying things

The VAT you pay yourself when you buy something comes back to you as input tax – you effectively only pay the difference between the VAT you charge and the VAT you've paid.

Example: you buy a laptop for €1,200 gross (incl. €200 VAT) and get the €200 back.

What invoice you need for the input tax deduction

For the full input tax deduction you need an invoice with all the legally required details; up to €400 gross, a simplified invoice (Kleinbetragsrechnung) is enough.

What this means for you: check incoming invoices are complete before you file them – one missing detail can cost you the entire deduction, not just part of it.

How often you file a VAT return (UVA)

It depends on your prior-year revenue: above €100,000, monthly; up to €100,000, quarterly; below €55,000, usually not at all – though the amount owed is still due. The UVA is due on the 15th of the second following month – for quarterly filers that's 15 February, May, August and November.

Do you even have to charge VAT?

Not necessarily: as a small business (Kleinunternehmer) with up to €55,000 annual revenue, you can stay exempt from VAT – but then you also don't get any input tax back. Which option makes sense for you mostly depends on your clients and expenses (more in the small-business exemption guideSoon).

Clients in other EU countries

If you provide services to a business in another EU country, you usually don't charge Austrian VAT. Your client pays the VAT in their own country (reverse charge). To do this, you need a VAT ID (UID), even under the small-business exemption. Your invoice must show your VAT ID, your client's VAT ID and a note that the tax liability passes to the recipient. You also report these sales to the tax office regularly in a recapitulative statement (Zusammenfassende Meldung, ZM). Different rules apply to private clients and to selling goods.

When opting into VAT voluntarily is worth it

If most of your clients are businesses that reclaim VAT anyway, or you're planning bigger investments, voluntarily opting out of the small-business exemption can be worth it – you then get the VAT back on your purchases. Sounds simple, but: opting in (Regelbesteuerungsantrag) locks you in for at least 5 calendar years. Not a decision to make on a whim.

Mistakes we see most often

• Issuing invoices without VAT after no longer qualifying as a small business
• Deducting input tax without a proper invoice – usually only caught in an audit
• Crossing the small-business threshold and reacting months too late
• Missing reverse charge on invoices from Google, Meta or other foreign providers
• Opting out of the small-business exemption without pricing in the 5-year lock-in

What does this mean for me? Whether the small-business exemption or VAT liability fits you depends on your clients and expenses – and on a 5-year lock-in if you change your mind. We work through it together in a free first call. Book a free first call.

Frequently asked questions

Keep reading 2-minute quick guide on this topicSoon · Small-business VAT exemptionSoon · VAT ID numberSoon

Official sources

• usp.gv.at: VAT overview – rates ↗, opens in a new tab
• usp.gv.at / wko.at: Small-business exemption (Kleinunternehmerregelung) ↗, opens in a new tab
• usp.gv.at: Invoice requirements for input tax deduction ↗, opens in a new tab
• usp.gv.at: VAT return (Umsatzsteuervoranmeldung) ↗, opens in a new tab

Pascal Schraml

Austrian certified tax advisor (Steuerberater), founder of PSTax

Advising self-employed people and freelancers in Austria since 2023, bilingual service in German and English, 600+ clients.