Value Added Tax
According to EU VAT law, participation fees for congresses and fairs are always taxable in the country where the congress takes place. Congresses held in Austria and their participation fees are subject to Austrian VAT legislation which stipulates that these fees are, in general, subject to 20% VAT which need to be charged to the participants and paid to the local Austrian tax authority.
In in order to make the payments to the authority it is necessary to register with the Austrian tax authority, obtain an Austrian VAT-ID number and file VAT returns in Austria.
A significant part of the costs that are incurred by the congress organiser in Austria will be charged by the suppliers with Austrian VAT. The standard VAT rate in Austria is 20% and applies, for example, to the rent of the congress venue. Hotel room rates are subject to 10% Austrian VAT and transportation services are subject to 10% Austrian VAT. The VAT rate for catering services depends on the actual service (10% for food and 20% for drinks). This input VAT (i.e. VAT that is charged to the organisation by its suppliers) is deductible according to the general rules under Austrian VAT law.
Income from sponsoring and the rental of exhibition stands is usually seen as a service that falls under the B2B general rule and is therefore taxable at the place where the recipient has established its business (reverse charge).
Special rules for charitable organisations
Austrian tax law has very attractive tax privileges for charitable organizations.
Whether or not an organisation is regarded as charitable organisation for Austrian tax purposes has to be scrutinised under Austrian tax law only. Given that the regulations concerning charitable organisations are not harmonised within the European Union, the charitable status in another EU member state may only be an indication but is not sufficient from an Austrian tax perspective. The prerequisites for being tax exempt for charitable organisations in Austria needs to be checked in detail on a case-by-case basis.
If an organisation is treated as a charitable organisation under Austrian tax law, it has the following options:
The organisation could opt to be treated as a non-entrepreneur in connection with the congress in Austria so that no VAT would be payable. Consequently, the organisation would not be allowed to deduct input VAT, resulting in higher costs for the congress (i.e. rental of the congress venue, catering, etc.).
If the organisation opts to be treated as an entrepreneur, it can apply the reduced VAT rate of 10% for the participation fees. Input VAT can be fully deducted under the general rules.
In order to determine the most favourable option, it is usually preferable to prepare a budget of the expected revenue and costs of the congress.
If the participation fees are dictated by the market, the option to charge 10% VAT is usually more favourable (10% VAT for participation fees would need to be paid to the tax authority whereas usually 20% input VAT for services received can be reclaimed).
Both for registering an organisation for VAT purposes in Austria as well as checking the charitable status (if applicable), professional tax advice is highly recommended. It is not possible under Austrian tax law to not register for VAT purposes without a detailed check of a possible charitable status of an organisation. If Austrian taxes are not correctly paid, the legal representatives of the organisation may be held personally liable and subject to severe penalties under the Austrian Fiscal Penalty Law.
If required, you can use the services of a specialised Austrian tax accountant such as: