Updated: Jul 27
In this article:
While VAT systems around the globe might work similarly, the following explanations only refer to the Austrian VAT system, which itself is based on the EU VAT system. VAT rules within the EU are very similar, with only very few exceptions (the most important being VAT rates and the range and application of certain exemptions from VAT), however, please take into consideration that the topic of VAT can in some cases get quite complex and only some cornerstones can be explained here. If after reading this part you’re still unsure whether VAT applies to your business, or how to deal with documentation and reporting, we strongly advise you to ask for individual consultations with an expert.
The VAT system
VAT is a tax on consumption. This means that it should be borne by the end consumer. Yet, it’s invoiced together with the sales price of a product and paid to the tax office by the supplier of a product or service.