Works Deliveries under Austrian VAT Law

For­eign plant con­struc­tion com­pa­nies look­ing to do busi­ness in Aus­tria must under­stand the con­cept of “works deliv­ery.” This arti­cle explains what works deliv­er­ies are and how they are treat­ed under Aus­tri­an VAT law. It offers prac­ti­cal insights – from reg­is­tra­tion require­ments to the role of a fis­cal rep­re­sen­ta­tive in Aus­tria (Fiskalvertreter in Öster­re­ich) – to pro­vide real val­ue for inter­na­tion­al busi­ness­es.

Works deliv­er­ies are not every­day trans­ac­tions; they are com­plex oper­a­tions com­bin­ing ele­ments of goods sup­ply and ser­vices. Espe­cial­ly in the inter­na­tion­al plant engi­neer­ing sec­tor, this leads to numer­ous tax ques­tions: Where is the turnover taxed? How should invoic­es be issued cor­rect­ly? What oblig­a­tions arise vis-à-vis the tax author­i­ties? Mis­takes in clas­si­fi­ca­tion can result in dou­ble tax­a­tion or penal­ties. The fol­low­ing sec­tions pro­vide a struc­tured overview – from the def­i­n­i­tion to the tax treat­ment to hands-on imple­men­ta­tion tips – so that for­eign entre­pre­neurs can car­ry out their projects in Aus­tria con­fi­dent­ly and suc­cess­ful­ly.

Definition of a Works Delivery

In sim­ple terms, a works deliv­ery is a sup­ply con­tract mit Mon­tage (with instal­la­tion) – the sup­pli­er not only deliv­ers goods but also installs or process­es them at the customer’s site. Aus­tri­an law (speziell § 3 Abs. 4 UStG) pro­vides a pre­cise def­i­n­i­tion: A works deliv­ery occurs when a busi­ness accepts an order to work on or process an item pro­vid­ed by the cus­tomer and uses its own prin­ci­pal mate­ri­als in doing so. In oth­er words, the client con­tributes some­thing (e.g. a machine, a build­ing, or a com­po­nent) and the sup­pli­er sub­stan­tial­ly incor­po­rates mate­ri­als of its own into that work.

Cru­cial­ly, the mate­ri­als sup­plied by the con­trac­tor must be more than mere ancil­lary items (like minor ingre­di­ents or sup­plies); they form the core of the fin­ished work. Works deliv­er­ies in plant con­struc­tion typ­i­cal­ly involve deliv­er­ing major plant com­po­nents com­bined with on-site instal­la­tion at the customer’s facil­i­ty. A clas­sic exam­ple is installing a con­trol cab­i­net, cus­tom-built for the client’s pro­duc­tion line, direct­ly into the exist­ing sys­tem. Because it becomes per­ma­nent­ly inte­grat­ed with the client’s equip­ment, it is clear­ly not a sim­ple goods deliv­ery but a sin­gle per­for­mance com­pris­ing both a sup­ply and a ser­vice.

This con­cept is dis­tinct from a work per­for­mance (Werkleis­tung). In a work per­for­mance, the con­trac­tor also per­forms work for the client but uses no sig­nif­i­cant mate­ri­als of their own – the pri­ma­ry mate­ri­als are pro­vid­ed by the client. For VAT pur­pos­es, a work per­for­mance is treat­ed as a ser­vice, not a goods deliv­ery. This dis­tinc­tion affects the place of sup­ply and the VAT treat­ment, which the next sec­tion exam­ines in detail.

Like­wise, a works deliv­ery must be dis­tin­guished from a pure goods deliv­ery with­out instal­la­tion. If a for­eign com­pa­ny sim­ply deliv­ers equip­ment to the customer’s door with­out any on-site assem­bly or pro­cess­ing, it con­sti­tutes an ordi­nary sup­ply of goods. In such cas­es, the stan­dard VAT rules for cross-bor­der trade apply: For a deliv­ery to an Aus­tri­an busi­ness, the trans­ac­tion can be han­dled as an intra-Com­mu­ni­ty sup­ply (0% VAT), where­as for a deliv­ery from a non-EU coun­try, import VAT is paid by the importer. Only when deliv­ery and instal­la­tion are com­bined does the trans­ac­tion become a dis­tinct works deliv­ery for tax pur­pos­es.

VAT Treatment of Works Deliveries

The VAT treat­ment of a works deliv­ery depends large­ly on the place of sup­ply. Under EU VAT rules (Direc­tive 2006/112/EC) and Aus­tri­an law, for sup­plies of goods with instal­la­tion the place of sup­ply is defined as the place where the instal­la­tion actu­al­ly takes place. Thus, if the assem­bly occurs in Aus­tria, the entire works deliv­ery is sub­ject to Aus­tri­an VAT, regard­less of where the sup­pli­er is estab­lished or where the goods orig­i­nate. For for­eign entre­pre­neurs in plant con­struc­tion, this means they must address Aus­tri­an VAT require­ments for projects per­formed in Aus­tria.

Reverse charge mech­a­nism: In many cas­es, Aus­tria applies the reverse charge mech­a­nism when a for­eign entre­pre­neur per­forms a works deliv­ery. Reverse charge means the VAT lia­bil­i­ty shifts to the recip­i­ent of the ser­vice. Specif­i­cal­ly, if a non-estab­lished busi­ness car­ries out a tax­able works deliv­ery in Aus­tria for a tax­able busi­ness or legal enti­ty, then the Aus­tri­an recip­i­ent must self-assess the VAT. The for­eign sup­pli­er issues its invoice with­out Aus­tri­an VAT, explic­it­ly not­ing that the “tax lia­bil­i­ty of the recip­i­ent” applies (for exam­ple, by indi­cat­ing “Reverse Charge”) and stat­ing the Aus­tri­an customer’s VAT iden­ti­fi­ca­tion num­ber.

The reverse charge sys­tem spares for­eign com­pa­nies from hav­ing to reg­is­ter for VAT in Aus­tria for one-off projects – at least as long as their ser­vice is pro­vid­ed to a tax­able busi­ness in Aus­tria. The sit­u­a­tion is dif­fer­ent for B2C: If a for­eign sup­pli­er pro­vides a works deliv­ery to a pri­vate indi­vid­ual or non-busi­ness enti­ty in Aus­tria, reverse charge does not apply. In that case, the for­eign sup­pli­er must charge Aus­tri­an VAT (cur­rent­ly 20% stan­dard rate) on the invoice and remit it to the Aus­tri­an tax author­i­ties.

It is impor­tant to cor­rect­ly clas­si­fy the trans­ac­tion as a works deliv­ery to avoid mis­tak­en­ly treat­ing parts of it as VAT-free intra-Com­mu­ni­ty sup­plies. As soon as on-site instal­la­tion in Aus­tria is part of the deal, the entire per­for­mance is con­sid­ered car­ried out in Aus­tria. For­eign sup­pli­ers should there­fore not, for exam­ple, zero-rate the goods por­tion as an intra-EU sup­ply and only sep­a­rate­ly tax the instal­la­tion. Instead, the trans­ac­tion is treat­ed uni­form­ly as a works deliv­ery tax­able in Aus­tria. Mis­clas­si­fi­ca­tion can lead to tax reassess­ments and issues in the event of an audit. Addi­tion­al­ly, the for­eign sup­pli­er should not mis­tak­en­ly charge its domes­tic VAT on the project – since the place of sup­ply is Aus­tria, the trans­ac­tion is tax­able only in Aus­tria (either via the cus­tomer under reverse charge or via the supplier’s own VAT reg­is­tra­tion in Aus­tria).

VAT Registration Requirements for Foreign Businesses

When­ev­er a for­eign entre­pre­neur con­ducts tax­able activ­i­ties in Aus­tria, the ques­tion of VAT reg­is­tra­tion aris­es. In the case of works deliv­er­ies, thanks to reverse charge a sup­pli­er with no estab­lish­ment in Aus­tria usu­al­ly does not need to reg­is­ter for VAT in B2B sit­u­a­tions. How­ev­er, as soon as a works deliv­ery is pro­vid­ed to a non-busi­ness recip­i­ent in Aus­tria (e.g. a pri­vate cus­tomer), reg­is­tra­tion in Aus­tria becomes manda­to­ry. The com­pa­ny must noti­fy the Aus­tri­an tax office and obtain an Aus­tri­an VAT iden­ti­fi­ca­tion num­ber (UID) in order to prop­er­ly report and remit the VAT.

In prac­tice, B2C sce­nar­ios in plant con­struc­tion are rare, since large instal­la­tions are typ­i­cal­ly ordered by busi­ness­es. But if a pri­vate client or an orga­ni­za­tion not enti­tled to input tax cred­it in Aus­tria is to receive a deliv­ered-and-installed project, the for­eign sup­pli­er can­not avoid a VAT reg­is­tra­tion. From the very first euro of turnover in Aus­tria (unlike domes­tic small busi­ness­es, for­eign firms have no sales thresh­old exemp­tion here), a VAT num­ber must be obtained. The Aus­tri­an small busi­ness regime (annu­al turnover up to €55,000 exempt) gen­er­al­ly does not apply to busi­ness­es with­out an estab­lish­ment in Aus­tria. Even if the vol­umes are small, for­eign providers of tax­able works deliv­er­ies must com­plete a nor­mal VAT reg­is­tra­tion.

One spe­cial con­sid­er­a­tion: if a for­eign sup­pli­er brings goods into Aus­tria or pur­chas­es goods local­ly for use in the project. Even if the main con­tract with an Aus­tri­an busi­ness falls under reverse charge, intra-Com­mu­ni­ty move­ments of goods or imports into Aus­tria can trig­ger a reg­is­tra­tion oblig­a­tion. For exam­ple, a Ger­man con­trac­tor trans­ports its own parts to Aus­tria to install at the client’s site. If this trans­fer of goods is treat­ed as an intra-Com­mu­ni­ty sup­ply to Aus­tria, the for­eign busi­ness in prin­ci­ple would have to account for an intra-Com­mu­ni­ty acqui­si­tion in Aus­tria – which requires hav­ing an Aus­tri­an VAT num­ber. In such cas­es, it’s advis­able to involve a tax expert or rep­re­sen­ta­tive who can assist with plan­ning (e.g. choos­ing the right deliv­ery method or import arrange­ments). In some sit­u­a­tions, the Aus­tri­an client can take on the import of the goods, spar­ing the for­eign sup­pli­er from need­ing to reg­is­ter. These sce­nar­ios illus­trate that ques­tions of reg­is­tra­tion around works deliv­er­ies should be clar­i­fied in advance with pro­fes­sion­al advice.

Role of the Fiscal Representative in Austria

For for­eign com­pa­nies that face VAT oblig­a­tions in Aus­tria, the fis­cal rep­re­sen­ta­tive in Aus­tria plays a cru­cial role. A fis­cal rep­re­sen­ta­tive is a tax agent based in Aus­tria who acts on behalf of the for­eign com­pa­ny. Par­tic­u­lar­ly for com­pa­nies estab­lished out­side the EU, appoint­ing a fis­cal rep­re­sen­ta­tive is manda­to­ry in order to obtain a VAT reg­is­tra­tion. How­ev­er, even EU-based busi­ness­es with­out a per­ma­nent estab­lish­ment in Aus­tria often vol­un­tar­i­ly use a fis­cal rep­re­sen­ta­tive to min­i­mize risks and out­source the admin­is­tra­tive bur­den.

The tasks of a fis­cal rep­re­sen­ta­tive in Aus­tria include, among oth­ers:

• VAT reg­is­tra­tion: They apply for the Aus­tri­an VAT num­ber (UID) for the for­eign com­pa­ny and set up all nec­es­sary fil­ings with the tax author­i­ties.
• Ongo­ing book­keep­ing and fil­ings: The fis­cal rep ensures that all peri­od­ic VAT returns (UVA) are sub­mit­ted on time (month­ly or quar­ter­ly depend­ing on turnover) and that tax pay­ments are made prompt­ly. They also pre­pare annu­al returns and EC Sales Lists (if required).
• Com­mu­ni­ca­tion with author­i­ties: As a local con­tact, the fis­cal rep han­dles cor­re­spon­dence with the Aus­tri­an tax office and oth­er pub­lic agen­cies, for exam­ple in case of inquiries or audits.
• Advice and com­pli­ance: A good fis­cal rep­re­sen­ta­tive in Aus­tria also advis­es the com­pa­ny regard­ing opti­mal VAT struc­tur­ing. They explain the appli­ca­tion of the reverse charge mech­a­nism, review invoic­es for Aus­tri­an require­ments, and help avoid mis­takes (such as incor­rect tax rates or miss­ing manda­to­ry infor­ma­tion).

By engag­ing a fis­cal rep­re­sen­ta­tive, a for­eign plant builder ensures that all local tax oblig­a­tions are prop­er­ly ful­filled. Espe­cial­ly for large plant-con­struc­tion projects with high val­ues, this pro­vides peace of mind: all VAT amounts are han­dled cor­rect­ly, dead­lines aren’t missed, and the com­pa­ny can focus on its core busi­ness. The term “fis­cal rep­re­sen­ta­tive in Aus­tria” thus rep­re­sents a key part­ner who builds the bridge between the for­eign com­pa­ny and the Aus­tri­an tax author­i­ty.

Not least, a fis­cal rep­re­sen­ta­tive also helps over­come lan­guage and admin­is­tra­tive bar­ri­ers, since all for­mal­i­ties with the Aus­tri­an author­i­ties are con­duct­ed in Ger­man.

Typical Case Examples from Plant Construction

To illus­trate how things work in prac­tice, here are some exam­ple sce­nar­ios show­ing the VAT han­dling of works deliv­er­ies in plant con­struc­tion under var­i­ous cir­cum­stances:

• Exam­ple 1: Ger­man plant builder with an Aus­tri­an busi­ness client (B2B) – A Ger­man machin­ery com­pa­ny deliv­ers and installs a pro­duc­tion line at an Aus­tri­an man­u­fac­tur­ing plant. The place of sup­ply is Aus­tria, so a tax­able works deliv­ery is tak­ing place in Aus­tria. How­ev­er, the Aus­tri­an cus­tomer is a VAT-reg­is­tered busi­ness with a VAT ID. There­fore, the reverse charge mech­a­nism applies. The Ger­man sup­pli­er invoic­es the project net (with no Aus­tri­an VAT) and notes “Reverse Charge – VAT to be account­ed by recip­i­ent” along with the customer’s VAT num­ber on the invoice. In this sce­nario, the Ger­man com­pa­ny does not need to reg­is­ter in Aus­tria. The Aus­tri­an busi­ness owes the VAT and can typ­i­cal­ly claim it simul­ta­ne­ous­ly as input tax.
• Exam­ple 2: US plant builder with an Aus­tri­an busi­ness client (B2B) – A com­pa­ny from the USA installs new equip­ment in an Aus­tri­an facil­i­ty. Although the sup­pli­er is based out­side the EU, the VAT treat­ment is no dif­fer­ent from the pre­vi­ous exam­ple: If the Aus­tri­an client is a busi­ness or legal enti­ty, reverse charge applies. The US firm there­fore issues an invoice with no VAT, and the Aus­tri­an client assumes the tax lia­bil­i­ty. An impor­tant con­sid­er­a­tion here is the import of goods: since the machin­ery com­po­nents are shipped from out­side the EU, it should be decid­ed in advance who will han­dle the import and pay the import VAT. Often the Aus­tri­an cus­tomer acts as the importer, as they can deduct the import VAT as input tax. This way, the US sup­pli­er doesn’t have to deal with the import tax. The US com­pa­ny would only need an Aus­tri­an VAT reg­is­tra­tion if it also made oth­er tax­able sup­plies in Aus­tria with­out reverse charge or if it want­ed to reclaim Aus­tri­an input tax.
• Exam­ple 3: Swiss plant builder with a pri­vate cus­tomer in Aus­tria (B2C) – A Swiss com­pa­ny deliv­ers and installs an auto­mat­ic gate sys­tem at an Aus­tri­an pri­vate res­i­dence. Here, the place of sup­ply is Aus­tria, which means Aus­tri­an VAT is due. Unlike in the B2B cas­es, the Swiss con­trac­tor can­not use reverse charge because the recip­i­ent is not a busi­ness. Con­se­quent­ly, the Swiss com­pa­ny must reg­is­ter for VAT in Aus­tria in advance and appoint a fis­cal rep­re­sen­ta­tive in Aus­tria. The invoice to the cus­tomer is issued with 20% Aus­tri­an VAT. The Swiss com­pa­ny must report and remit this tax to the Aus­tri­an tax office (usu­al­ly via its fis­cal rep). While the Swiss busi­ness can claim any Aus­tri­an input VAT incurred (e.g. on mate­r­i­al pur­chas­es or cus­toms) in its returns, the admin­is­tra­tive bur­den is sig­nif­i­cant. This exam­ple shows that serv­ing pri­vate clients in Aus­tria requires care­ful tax plan­ning from the out­set. (Note: If the sup­pli­er in this sce­nario were an EU com­pa­ny, it would also need to reg­is­ter, though it would not be legal­ly required to appoint a fis­cal rep­re­sen­ta­tive. Many EU busi­ness­es still choose to use a fis­cal rep in Aus­tria to sim­pli­fy the process.)
• Exam­ple 4: Pure instal­la­tion ser­vice with­out sup­ply­ing mate­ri­als – A Pol­ish assem­bly team erects a pro­duc­tion line in Aus­tria using all main com­po­nents pro­vid­ed by the Aus­tri­an client. In this case, there is no works deliv­ery but rather a work per­for­mance (ser­vice), since the Pol­ish com­pa­ny is not con­tribut­ing sig­nif­i­cant mate­ri­als of its own. The place of sup­ply for this instal­la­tion ser­vice is also Aus­tria (the loca­tion where the work is phys­i­cal­ly car­ried out). For VAT pur­pos­es, the reverse charge mech­a­nism applies here as well in the B2B sce­nario: the Aus­tri­an busi­ness cus­tomer is liable for the VAT, while the Pol­ish ser­vice provider can invoice with­out VAT. The Pol­ish com­pa­ny does not need to reg­is­ter in Aus­tria, pro­vid­ed it engages in no oth­er tax­able activ­i­ties in Aus­tria.

The exam­ples demon­strate that whether a for­eign sup­pli­er faces VAT oblig­a­tions in Aus­tria for a works deliv­ery depends chiefly on the customer’s sta­tus (busi­ness or pri­vate) and on how the move­ment of goods is han­dled. In many B2B cas­es, the reverse charge mech­a­nism relieves the for­eign con­trac­tor from hav­ing to pay VAT in Aus­tria. In oth­er sit­u­a­tions, how­ev­er, a thor­ough knowl­edge of the rules and time­ly ful­fill­ment of oblig­a­tions are indis­pens­able to avoid prob­lems.

In sum­ma­ry, it becomes clear that for­eign entre­pre­neurs need sol­id tax plan­ning for works deliv­er­ies in Aus­tria. The use of the reverse charge mech­a­nism in most B2B cas­es does sim­pli­fy pro­ceed­ings, but all for­mal­i­ties must still be strict­ly observed. When in doubt, it is rec­om­mend­ed to seek expert advice ear­ly to avoid lat­er tax reassess­ments and penal­ties.

Practical Implementation and Tips

Final­ly, here are some prac­ti­cal tips on how for­eign plant builders can suc­cess­ful­ly and com­pli­ant­ly exe­cute works deliv­er­ies in Aus­tria:

1. Define scope and deter­mine place of sup­ply: Clear­ly spec­i­fy in your con­tract which ser­vices (deliv­ery, instal­la­tion, etc.) you will pro­vide, as this influ­ences the VAT treat­ment. Ana­lyze at the start of each project whether a works deliv­ery in the VAT sense is present and whether the place of sup­ply will be Aus­tria. If an instal­la­tion in Aus­tria is part of the deal, plan from the begin­ning with Aus­tri­an VAT rules in mind.
2. Con­firm cus­tomer sta­tus (B2B vs B2C): Deter­mine whether your Aus­tri­an cus­tomer is a busi­ness (with a VAT ID) or a pri­vate cus­tomer. The tax han­dling will fol­low accord­ing­ly: For B2B, be sure to obtain the customer’s VAT ID and apply the reverse charge mech­a­nism. For B2C, bud­get addi­tion­al time for the VAT reg­is­tra­tion process.
3. Apply for VAT reg­is­tra­tion ear­ly: If a reg­is­tra­tion in Aus­tria is required, take care of it well in advance. Obtain­ing a VAT num­ber can take a few weeks. Pre­pare all nec­es­sary doc­u­men­ta­tion (e.g. proof of com­pa­ny reg­is­tra­tion, pow­er of attor­ney for the fis­cal rep, a descrip­tion of your activ­i­ties in Aus­tria).
4. Engage a fis­cal rep­re­sen­ta­tive in Aus­tria: For non-EU busi­ness­es, a fis­cal rep is manda­to­ry. But EU busi­ness­es should also con­sid­er hir­ing a fis­cal rep­re­sen­ta­tive in Aus­tria. This rep­re­sen­ta­tive will assist with reg­is­tra­tion, han­dle com­mu­ni­ca­tion with the tax office, and ensure all dead­lines and oblig­a­tions are met.
5. Issue invoic­es cor­rect­ly: Draw up your invoic­es accord­ing to Aus­tri­an require­ments. Under reverse charge, no VAT amount should be shown; instead, note the rea­son (“Reverse Charge”) and include the customer’s VAT num­ber. For invoic­es where Aus­tri­an VAT is charged, your own Aus­tri­an VAT num­ber must appear on the invoice, and the tax rate must be clear­ly indi­cat­ed. In all cas­es, ensure all required infor­ma­tion is present (names and address­es of both par­ties, date of sup­ply, con­sid­er­a­tion, etc.) so as not to jeop­ar­dize the customer’s input tax cred­it. Apply the same prin­ci­ples to any advance or install­ment invoic­es: under reverse charge, do not show any VAT (but do note what the advance pay­ment is for); if you are liable for the tax, include Aus­tri­an VAT on the advance invoice and remit it accord­ing­ly.
6. Main­tain records and ful­fill report­ing duties: Keep detailed records of the sales made in Aus­tria and any input VAT incurred. Sub­mit all required fil­ings (VAT returns, annu­al return, and if applic­a­ble EC Sales Lists or Intra­stat dec­la­ra­tions for goods move­ment). Omis­sions can lead to sub­stan­tial penal­ties.
7. Seek expert advice: Inter­na­tion­al VAT law is com­plex. Do not hes­i­tate to con­sult an Aus­tri­an tax advi­sor or your fis­cal rep­re­sen­ta­tive for guid­ance. This helps you avoid tax traps – for exam­ple, mis­judg­ing a trans­ac­tion as tax-exempt – and ensures your project is set up cor­rect­ly from the start.
8. Con­sid­er VAT refunds: If you do not have your own VAT reg­is­tra­tion in Aus­tria due to reverse charge, you can still reclaim any Aus­tri­an VAT you have paid. EU com­pa­nies use their home country’s elec­tron­ic VAT refund por­tal, while non-EU com­pa­nies can file a refund claim under the 13th Direc­tive. Have your fis­cal rep assist with this to meet all dead­lines and for­mal­i­ties.

By fol­low­ing these mea­sures, for­eign com­pa­nies can car­ry out their
works deliv­er­ies in Aus­tria
smooth­ly. The com­bi­na­tion of good plan­ning, knowl­edge of the reg­u­la­tions, and pro­fes­sion­al sup­port (through a fis­cal rep­re­sen­ta­tive in Aus­tria) ensures both cus­tomer sat­is­fac­tion and com­pli­ance with the tax author­i­ties.