What are distance sellings?
Distance selling in the EU occurs when a supplier in one EU member state sells goods to persons in another EU member state who are not registered for VAT purposes or must only register, if their intra-EU acquisitions exeed the threshold of € 11 000 (for more details see below), and the supplier is responsible for the delivery of the goods. Under the distance selling arrangements, sales to customers in other member states who are not registered for VAT purposes are liable to pay VAT in the member state of the supplier provided that the threshold appropriate to the member state of the customer is not breached. If the amount of distance sales exceed the threshold in any particular member state, the supplier must register, account for VAT and pay VAT in that member state (member state of destination).
The Threshold applicable for Distance Sales to Austria is set with € 35 000 (until 31.12.2010: € 100 000).
Distance sales to Austria
Where the value of distance sales to persons in Austria by a supplier from another EU member state exceeds
€ 35 000,-- in one calender year, that supplier must register for VAT in Austria and must account for VAT at the appropriate Austrian rates. If the threshold is not exceeded, the supplier may, nevertheless, opt to register and account for VAT in Austria on his or her distance sales.
Recipients of distance sales
The recipients of distance sales will mainly be
- private individuals
- taxable persons who do not use the goods for their business
- taxable persons whose supplies are exempt (e.g. small enterprises)
- flat rate farmers
- public bodies who are not taxable persons or do not use the goods for their business activity
as long as the amount of their intra-EU acquisitions do not exceed the threshold of € 11 000.
An Italian supplier dispatches goods to a private individual in Austria. The threshold for Austria of € 35 000,-- is exceeded. The place of supply is transferred from Italy to Austria. The Italian supplier must register for VAT in Austria and account for VAT here on those sales.
Computation of the Threshold
It should be noted that a supplier who is engaged in distance sales to several member states is required to register in each member state in which the value of the distance sales exceeds the appropriate threshold. Sales of new means of transport, sales of excisable goods and sales where the margin taxation applies are excluded from the distance selling arrangements.
Suppliers who engage in distance sales in Austria have to calculate the Austrian VAT on the value of their distance sales
- if they have exceeded the threshold of € 35 000,-- in the previous year:
invoicing with Austrian VAT with the first supply in the current year
- if they exceed the threshold of € 35 000,-- in the current year:
invoicing with Austrian VAT beginning with the fist supply after exceeding the threshold.
The appointment of a Fiscal Representative is only mandatory in cases where the supplier has no residence, seat or permanent establishment in a member state and there is no appropriate mutual agreement procedure. Unlikely in cases of distance sales.
The distance seller is obliged to keep proper records so as to enable the VAT liability to be determined and make those records available for inspection by the Austrian Tax Authorities (Sec 18 UStG 1994). Cash transactions at fair trades or similar events have to be recorded in lists and the vouchers be collected.
A taxable person who supplies products subject to excise duty (e.g. alcohol and alcoholic beverages, manufactured tobacco, certain energy products, such as mineral oil) to Austria must register and account for VAT in Austria in respect of those sales irrespective of their value. The sales of excisable goods are always subject to VAT in Austria. Such supplies have to be declared at the Customs Office of Innsbruck and the Excise Tax duty to be paid accordingly. Appropriate customs documents have to be attached to the supply.
For more information concerning customs regulations, restriction on imports etc please refer to the following link: