The first half of 2026 brought several significant VAT developments in Austria. The principal change is the introduction of a new 4.9% VAT rate for specified essential foodstuffs from 1 July 2026. Other developments include a 0% VAT rate for feminine hygiene products and contraceptives, a mandatory VAT exemption for certain residential lettings, amendments to cash register requirements, revised Intrastat thresholds, and proposed measures relating to parcel deliveries.
1. New 4.9% VAT Rate on Essential Foodstuffs
Austria has introduced a 4.9% VAT rate for specified essential food products through an amendment to the VAT Act (UStG 1994), published as BGBl. I No. 37/2026. The legislation was approved by the National Council (Nationalrat) on 21 May 2026 and applies from 1 July 2026.
The new provision, § 10(1a) UStG 1994, applies to the supply and importation of goods listed in Annex 3 to the Act. Eligible products are identified by Combined Nomenclature (CN) codes and include milk, yoghurt, butter, fresh eggs, fresh and frozen vegetables, selected fruits, rice, wheat flour and semolina, uncooked pasta, bread and table salt.
Only products falling within the specified CN classifications qualify for the 4.9% rate. Other food products continue to be taxed under the existing VAT provisions.
2. Proposed Parcel Tax and Plastic Levy
The federal government has proposed two measures intended to offset part of the revenue impact of the reduced VAT rate on essential foodstuffs.
The first is a tax on non-recyclable plastics proposed to apply from October 2026. The second is a draft Parcel Tax Act, under which a €2 levy would apply to consumer parcel deliveries made by businesses with annual turnover exceeding €100 million. Quarterly reporting would take place through FinanzOnline. The public consultation closed on 26 May 2026.
At the end of the reporting period, the proposal remained under legislative consideration.
3. 0% VAT Rate for Feminine Hygiene Products and Contraceptives
From 1 January 2026, Austria applies a 0% VAT rate with the right to deduct input VAT to feminine hygiene products and contraceptives.
The measure was enacted through the Budget Accompanying Act 2025 (Budgetbegleitgesetz 2025, BGBl. I No. 25/2025) and applies to products including tampons, sanitary pads, menstrual cups, panty liners and contraceptives.
4. VAT Exemption for Certain Residential Lettings
The Fraud Prevention Act 2025 (Betrugsbekämpfungsgesetz 2025) introduced a mandatory VAT exemption for the letting of certain high-value residential properties with effect from 1 January 2026.
The exemption applies where acquisition and/or construction costs, including ancillary buildings, exceed €2 million (net of VAT) within a five-year period. In such cases, the option to tax is unavailable and the letting is exempt without the right to deduct input VAT. Existing input VAT deductions may be subject to adjustment under the ordinary adjustment rules.
5. Cash Register Package 2026
The Cash Register Package 2026, effective from 1 January 2026, introduced several amendments to Austria’s cash register regime while leaving the existing RKSV security framework unchanged.
The turnover threshold under the “cold hands” exemption increased from €30,000 to €45,000. The simplified recording of sales using up to fifteen product groups was made permanent. From 1 October 2026, businesses may issue digital receipts by QR code or web link, while continuing to provide paper receipts where requested.
6. Intrastat Thresholds
Austria increased its Intrastat reporting thresholds from the 2026 reporting year. The new thresholds are €5 million for arrivals and €1.2 million for dispatches. Businesses whose intra-EU trade remains below these thresholds are not required to submit Intrastat declarations.
7. Investment Gold
Austria has published its annual list of investment gold coins qualifying for the VAT exemption. For 2026, qualifying coins must have a purity of at least 900/1000 and be, or have been, legal tender in their country of origin. The Vienna Philharmonic continues to qualify.
8. E-Invoicing
Austria’s mandatory B2G electronic invoicing framework remains unchanged. Suppliers to federal government entities are required to submit structured electronic invoices through the e-Rechnung.gv.at platform or the Peppol network using the prescribed formats.
Following the adoption of the EU’s VAT in the Digital Age (ViDA) package, Austria will be required to implement the EU digital reporting framework within the applicable implementation timetable. No domestic B2B implementing legislation had been adopted by the end of the reporting period.
9. VAT Rates from 1 July 2026
From 1 July 2026, Austria’s principal VAT rates are:
20% – standard rate;
13% – specified cultural, agricultural and other supplies;
10% – reduced rate for supplies including most foodstuffs not covered by the 4.9% rate, pharmaceuticals, books, accommodation, restaurant services and public transport;
4.9% – specified essential foodstuffs listed in Annex 3 to the VAT Act;
0% – feminine hygiene products and contraceptives.
The VAT registration threshold for domestic businesses remains €55,000 annual turnover.
