Austrian VAT (Mehrwertsteuer) 2026: Rates, Reduced Rates and Exemptions

Almost every purchase and service in Austria includes VAT, even when it is not shown separately on the bill. In this guide, you can find the VAT rates applicable in 2026, what the reduced rates cover and which activities are exempt.

What is Austrian VAT and who pays it?

Value-added tax is officially called Umsatzsteuer (USt) in Austria and is commonly known as Mehrwertsteuer. It is generally charged on goods and services supplied by businesses to consumers.

In practice, the business collects the tax from you when you make a purchase and then pays it to the tax office, the Finanzamt. As a consumer, you pay VAT as part of the final price. If you operate a business, you may need to collect and remit it. The rules are based on the Austrian Value Added Tax Act, the Umsatzsteuergesetz (UStG).

How much is VAT in Austria in 2026?

The main Austrian VAT rates are:

• 20%: the general or standard rate and the basic rule
• 4.9%: selected basic food products
• 10%: for example, residential renting, accommodation, food and books
• 13%: for example, live animals, plants, firewood and artistic activities

The 20% rate is the general rule. Reduced rates are exceptions, and the complete list is set out in Section 10 of the UStG, or § 10 UStG. Items and services not listed there generally fall under the standard rate.

The 4.9% rate: selected basic foods

The 4.9% rate is the lowest VAT rate and applies to selected food products. Examples include bread, butter, eggs and milk.

Not every food product qualifies. The supply of food generally falls under the 10% rate, while the 4.9% rate applies only to selected products.

What does the 10% rate cover?

Examples of goods and services covered by the 10% rate include:

• residential letting,
• accommodation in furnished living and sleeping rooms, including regularly associated ancillary services and heating,
• letting plots of land for camping,
• waste collection, known as Müllabfuhr,
• the supply of books, newspapers, periodicals and food.

What does the 13% rate cover?

Examples of goods and services covered by the 13% rate include:

• live animals, live plants and firewood, known as Brennholz,
• income from activities performed as an artist,
• film and circus performances,
• admission tickets to sporting events.

These are examples only. If the classification of a particular product or service is unclear, Section 10 of the UStG determines the applicable treatment.

What VAT exemptions are available?

There are two types of VAT exemption. The key difference is whether input VAT can be deducted through the Vorsteuerabzug.

Genuine VAT exemption (echte Steuerbefreiung)

Under a genuine exemption, the transaction is VAT-free but the right to deduct input VAT remains. Examples include:

• exports to countries outside the EU, known as Ausfuhrlieferung, and supplies between EU Member States; separate rules apply to so-called tourist exports,
• the processing and refinement of goods for another party, known as Lohnveredelung.

Non-genuine VAT exemption (unechte Steuerbefreiung)

Under a non-genuine exemption, the input VAT cannot be deducted. Examples include:

• income of small businesses, known as Kleinunternehmen,
• financial and banking transactions, such as granting loans,
• sales of building plots,
• certain types of commercially oriented letting,
• services provided by insurance agents,
• medical and similar services, such as those provided by doctors, midwives, psychotherapists and medical massage therapists,
• training provided by certain private schools and educational institutions,
• the activities of certain carers, day mothers and foster parents,
• income of hospitals, medical and nursing institutions and residential care homes for older people.

Can you opt out of a VAT exemption?

For some non-genuine exemptions, opting for taxation is possible. One example is the sale of building plots. This is known as Option zur Steuerpflicht.

If you waive the exemption, the 20% standard rate must be applied. In return, you receive the right to deduct input VAT. A separate declaration to the tax office is not required: it is sufficient to treat the transaction accordingly in the advance VAT return, known as the Umsatzsteuervoranmeldung, and in the annual return.

Frequently asked questions

Are Mehrwertsteuer and Umsatzsteuer the same?

Yes. The official term is Umsatzsteuer, while Mehrwertsteuer is commonly used in everyday language.

Are all food products taxed at 4.9%?

No. The 4.9% rate applies only to selected basic food products, such as bread, butter, eggs and milk. Food generally falls under the 10% rate.

How much VAT is included in residential rent?

Residential letting is subject to the reduced 10% rate.

Where can I check VAT rates in other EU countries?

The European Commission’s Steuern in Europa, or Taxes in Europe, database contains the VAT rates of the Member States.

Practical steps

1. Check your invoice or receipt to see whether VAT is included and which rate has been applied.
2. For food, do not assume that the 4.9% rate applies automatically; confirm whether the product is one of the selected basic foods.
3. If you run a business, compare the product or service with the classifications in § 10 UStG.
4. Determine whether an exemption is genuine or non-genuine, because this affects your right to deduct input VAT.
5. If you are considering opting for taxation, make sure the transaction is reported correctly in the Umsatzsteuervoranmeldung and annual return.
6. For a specific case, consult the Finanzamt or a qualified tax professional. This information is not tax advice.

Sources: usp.gv.at, oesterreich.gv.at