On 10 October 2019, the upper house of Austria’s Parliament passed a digital advertising tax bill. The bill was approved by the Austrian lower house of Parliament on 19 September 2019. The Bill includes the following changes:
- Under the Digital Advertising Act, a new 5% tax on online advertising revenues will be introduced with effect from 1 January 2020. The tax of 5% on income from Austrian digital advertising applies to companies with a worldwide annual turnover of at least EUR 750 million and an annual turnover of EUR 25 million or more in Austria;
- With regard to the VAT rules for the online purchase of goods sold by sellers in third countries, the current exemption for goods of less than EUR 22 is repealed with effect from 1 January 2021;
- Also effective 1 January 2021, the supply threshold for distance selling from EU countries to non-entrepreneurs in Austria will be abolished, with the impact that distance selling from other EU countries to non-entrepreneurs in Austria will be subject to Austrian VAT from the first Euro; and
- Furthermore, under the bill stricter reporting obligations will be introduced for online platforms that connect the buyers and sellers of goods and services.
