Transition from the Small Business VAT Exemption Scheme to Standard VAT Taxation
Receipts relating to supplies or services performed during the period in which the VAT small business exemption was in effect and invoiced without VAT continue to be exempt from VAT, notwithstanding their subsequent collection after the transition to the standard VAT regime.
In a recent decision, the Austrian Federal Finance Court (Bundesfinanzgericht, BFG) confirmed that, for the purposes of qualifying as a VAT small business and calculating the relevant turnover threshold, the decisive factor is the year in which the turnover is actually generated (i.e. the time the supply or service is performed), rather than the date on which payment is received.
Recommendation: If a business’s (expected) annual turnover is likely to be slightly above or below the current small business threshold of EUR 55,000 gross, it is advisable to seek professional advice at an early stage. This helps ensure that any necessary changes to bookkeeping and invoicing procedures can be implemented in a timely manner.