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Austria Announces Approval of Several COVID-19 Measures — Orbitax Tax News & Alerts

Austria's Ministry of Finance issued a release on 24 April announcing the approval of several COVID-19 measures, including the VAT exemption on face masks and refunds of tax credits, which must normally be set off against other tax liabilities.


Blümel: Rapid assistance and the greatest possible goodwill are paramount

Budget Committee adopts numerous COVID-19 measures put forward by the Federal Ministry of Finance — VAT exemption for protective face masks, relief on travel expense allowances for sportspeople, Grant Audit Act for auditing COVID-19 grants.

The Austrian federal government has assembled an aid package totalling EUR 38 billion. The aid funds are being made available rapidly and with a minimum of bureaucracy using various instruments, with the aim of protecting the health of Austrian citizens, securing jobs and guarding as many companies as possible against insolvency. At today's Budget Committee meeting, numerous policy measures of the Austrian Finance Ministry were adopted, intended to make things easier for people and enable structured implementation of the relevant measures.

"At times of crisis, we need goodwill and flexibility. Through measures such as VAT exemption for face masks, or full payouts where relief is granted, we are providing direct assistance and directly relieving the burden on Austrian citizens," explained Finance Minister Blümel.

At today's Budget Committee, a legislative proposal was approved which grants full exemption from value added tax on domestic purchases of face masks. This is intended to ensure that the financial burden on individuals arising from the obligatory wearing of masks is kept as low as possible. The new provision applies to all masks delivered between 13 April and 1 August 2020, and will have retroactive effect.

Similarly, through an amendment to the Federal Fiscal Code, the opportunity is now being created, in addition to any relief which may have been applied for or approved, such as tax deferrals or payment in instalments, of receiving payment of any credit in full. Previously, credit balances had to be used to pay off any tax debts owed. Finally, steps are now being taken to ensure that retired doctors returning to work due to the corona crisis will not suffer any tax disadvantages. The favourable tax rate on profits from sale or relinquishment of a medical practice will therefore remain in place even when a doctor returns to work.

Tax exemption on standard travel expense allowances for sportspeople during periods in which sporting venues are closed due to the crisis constitutes a further measure. In addition, in order to ensure the swift, unbureaucratic and efficient processing of these financial measures, the new Section 6c of the Act establishing a State-Owned Company for Wind-Down Purposes ("ABBAG"-Gesetz) sets out a less stringent formal requirement, corresponding to wind-down via Austria Wirtschaftsservice GmbH.

Today the Committee also adopted the Grant Audit Act, which provides for retrospective auditing of grants relating to the Covid-19 pandemic through a tax office audit. This is intended to check the accuracy and plausibility of the data and documents submitted by grant beneficiaries for the purpose of obtaining a fixed-cost grant, a grant from the hardship fund or short-time working assistance. Checks are only intended within the framework of audit operations of the tax office (external audit, follow-up, monitoring). An audit report will only be prepared if there exists a reason to act and thus incorrect details or other circumstances have been identified. The audits undertaken will be published on the website of the Austrian Finance Ministry in a statistical report for the respective previous calendar year.

"We are helping as well as we can, and showing goodwill and flexibility in many areas. Our measures are supporting affected businesses and securing jobs in Austria; that is our highest priority. The money must get to those who need it. However, this also means that there will be no tolerance for those seeking to profit by reaping taxpayer funds in the crisis. Times of crisis do not mean there is a legal vacuum. We are showing as much goodwill as possible, while checking only as much as we need to," explained Finance Minister Blümel.