Set up Austrian taxes in your Shopify store

The most critical difference in charging VAT in your store is whether your business is VAT-registered or not. You can read more about this topic in our Shopify VAT guide for selling to EU customers.

If your business is VAT-registered and you want to sell to both consumers (B2C) and business customers (B2B) in different countries of the European Union, you will need to set up your tax settings and tax rates properly.

• Tax settings
• Tax rates in Austria and the EU
• Selling physical goods to customers in Austria
• Selling physical goods to customers in other EU countries
• Selling within the “micro-business” threshold
• Surpassing the “micro-business” threshold
• Country-specific registration
• Selling digital goods

If you want to charge VAT to some customers in your Shopify store but not others, you have two options based on how you want to display product prices.

If you are selling for the most part to consumers (B2C), you may prefer to display product prices as including VAT.

To display your product prices, including VAT, but still allow your business customers to have VAT deducted at checkout:

1. In your Shopify admin, go to the Settings → Taxes and duties page.
2. In the Tax calculations section, check the All prices include tax checkbox and Save your changes.

1. Go to the Settings → Markets page.
2. In the Other markets section, click Preferences.
3. Check Include or exclude tax based on your customer's country checkbox.
4. Save your changes.

In case your customers are mostly businesses (B2B), you can choose to have your product prices displayed as excluding VAT.

To display your product prices excluding VAT:

1. In your Shopify admin, go to the Settings → Taxes page.
2. In the Tax calculations section, uncheck the All prices include tax and save your changes.

As of 2022, the current rate of VAT in Austria is 20%. There are also other reduced VAT rates of 13%, 10%, 5%, and 0% that apply to products such as firewood, wine production, books, newspapers, and digital services.

When selling digital goods and physical goods in the EU, there are different tax rates based on the taxable turnover of your online store.

When selling physical goods to customers in Austria—both VAT and non-VAT registered, you should always charge Austrian VAT.

When selling to non-VAT registered customers outside of Austria but still, within the EU you do charge VAT, and the VAT rate you charge will depend on whether you breach the “micro-business” threshold of €10,000 (excluding VAT).

If you are selling to VAT-registered businesses in the other countries of the EU, you should not charge VAT. Shopify calculates the tax rate automatically based on the type of registration set in your tax settings.

Selling within the “micro-business” threshold

If your taxable turnover during the last twelve months outside Austria but still within the EU is below the threshold of €10,000 (excluding VAT), you should charge Austrian VAT to all non-VAT registered customers in the European Union.

To use the “micro-business” taxation scheme, you need to apply for the “micro-business” exemption at your local tax authority and have just one VAT registration within the European Union.

Then, you can set up your tax settings in your Shopify admin. This task only needs to be performed once.

To set VAT rates for the “micro-business” exemption scheme and charge your home country's VAT rates on all orders:

1. In your Shopify admin, go to the Settings → Taxes and duties page.
2. In the Countries/regions section, click on European Union.
3. In the Shipping within the EU section, click on Collect VAT.
4. In the Collect VAT window, select the Micro-business exemption option and click Next.
5. Select your Registration country and enter your VAT number. Leave this field blank if you have applied for a VAT registration number but don't have one yet. You can update it later when you receive it.
6. Save your changes by clicking on the Collect VAT button.

Surpassing the “micro-business” threshold

If your taxable turnover in the last twelve months outside Austria but still within the EU is above the threshold of €10,000 (excluding VAT), you must register for VAT in each of the countries you are selling to and pay their rate of VAT in that country.

This means that customers from different EU countries should be charged with different VAT rates, varying from 17% to 27%.

For example, if your business is located in Austria, and you sell goods to consumers in Belgium and Germany, and your total sales to Belgium and Germany are below the €10,000 threshold, then you charge the Austrian VAT rate of 20%.

However, if your total sales in Belgium exceed the threshold of €10,000, then you must register for VAT in both Belgium and Germany, and you'll charge Belgium VAT at 21% on goods sold in Belgium and German VAT at 19% on goods sold in Germany.

When breaching the threshold, registering for VAT in each EU country can become time-consuming and complicated. In this case, you can choose to use the One-Stop Shop (OSS) Union scheme. This allows you to still charge VAT at the rate of the country where you are selling, but you only have to report on one OSS VAT return.

To charge your Belgium and German customers with the correct VAT rate, you need to set your tax settings accordingly. Shopify gives you the option to select OSS as your VAT registration type, allowing you to charge correct VAT rates automatically.

To set VAT rates for the OSS scheme and charge your customers' shipping country VAT rates on all orders:

1. In your Shopify admin, go to the Settings → Taxes and duties page.
2. In the Countries/regions section, click on European Union.
3. In the Shipping within the EU section, click on Collect VAT.
4. In the Collect VAT window, select the One-Stop Shop registration option and click Next.
5. Select your Registration country and enter your VAT number. If you have applied for a VAT registration number but don't have one yet, leave this field blank. You can update it later when you receive it.
6. Save your changes by clicking on the Collect VAT button.

Now, your customers' shipping country VAT rates automatically apply to all EU sales.

Selling with a country-specific registration

Some businesses may decide to continue to hold tax registration for each EU country they ship to. If that is your case, in Shopify, you are able to add a local VAT registration number for a different country, which allows you to charge the correct VAT rates. Shopify will then automatically apply VAT rates based on your VAT registration.

To add the local VAT registration number:

1. In your Shopify admin, go to the Settings → Taxes and duties page.
2. In the Countries/regions section, click on European Union.
3. In the Shipping within the EU section, click on Collect VAT.
4. In the Collect VAT window, select the Country-specific registration option and click Next.
5. Select Country and enter your VAT number. If you have applied for a VAT registration number but don't have one yet, leave this field blank. You can update it later when you receive it.
6. Save your changes by clicking on the Collect VAT button.
7. To add the local VAT registration number for every country you are registered in, click on the Add country option and confirm the selection by clicking on the Add country button.

If you are not able to select the additional country you are VAT-registered in, you may need to create a shipping zone first. To create a shipping zone:

1. In your Shopify admin, go to the Settings → Shipping and delivery page.
2. In the Shipping section, click Manage rates → Create shipping zone.
3. Type in the name of the shipping zone, add the country (or countries) you are VAT-registered in using the search bar, and when finished, click Done.
4. To make this zone available, add the shipping rates.
5. Save your changes.

There are special rules for selling digital goods from Austria to other EU countries and the UK. But firstly, it is critical to understand what exactly digital services are.

Digital goods or services include radio and television broadcasting services, telecommunication services, and electronically supplied services, such as online magazines, music, films, and games.

Even though a company uses the internet to facilitate trading, this does not always mean that they provide e-services. For example, the sale of goods where the order and processing are done electronically (such as through a Shopify store) is not a supply of digital services. This is regarded as a sale of goods and follows the usual VAT rules set out above.

The VAT rules when selling digital services

If you are making supplies of digital services from Austria to other EU countries or to UK consumers, there is no registration threshold (such as the exemption for micro-businesses of €10,000).

Therefore, if you are selling to individuals or non-VAT registered businesses, you must register for VAT in that country and charge its VAT rate to your customers there.

If you are selling digital services to VAT-registered businesses, then they are responsible for any VAT due to the tax authorities in their country.

Having to register for VAT in multiple countries can be quite time-consuming. Shopify store owners in Austria selling to other countries in the EU (excluding Northern Ireland) can register for VAT Mini One Stop Shop (MOSS). The MOSS scheme allows businesses to report the VAT due on services in their own country via a web portal.

Once you set your tax rates correctly in your store, Sufio will automatically create valid invoices with an exact breakdown of the charged VAT.

Invoices can be created in multiple languages and include all the necessary details to make them compliant with invoicing legislation in the EU.

Issuing invoices with the correct tax breakdown is crucial for your bookkeeping and tax purposes.

If you are selling to businesses (B2B), Sufio invoices include all the required information, as well as the VAT registration number (USt-IdNr. or Umsatzsteuer-Identifikationsnummer) of your online store and your business customers.