News out of Austria hints that the reduced VAT rate will be increased next year. Most goods and services - including livestock, seeds, cultural services, museums, zoos and hotels - will see the rate go up to 13%, from the current 10%.
However, the standard VAT rate of 20% will not change and the current reduced 10% rate will continue to apply to food and pharmaceuticals. It creates a three-tier system for VAT in Austria.
The changes will take effect from 1 January 2016; VAT on hotel accommodation will increase from either 1 April or 1 May 2016.
While precise details of the Budget measures are not yet known, it is expected that certain anti-fraud measures will also be introduced; the likes of mandatory electronic cash registers for small businesses, a prohibition on cash payments in the construction industry may be introduced, as well as other unspecified measures to combat VAT fraud in general and specifically in the case of distance sales.
Further details of these changes are expected in coming months.
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