Austria calls its value added tax the Umsatzsteuer, and for most purchases the rate is a flat 20 percent already folded into the shelf price. The complication is not that headline number but the reduced bands sitting beneath it, because 2026 added a fourth rate to the list. A basket of groceries can now carry three different rates at the same till. This guide sets out every rate in force this year, shows which goods fall where, and works the arithmetic in both directions so you can pull the tax out of a gross price or add it onto a net one.
The four rates in force for 2026
The standard rate, the Normalsteuersatz, is 20 percent and covers anything not written into the reduced lists: electronics, clothing, fuel, alcohol, furniture and most services. Below it sit three reduced rates, each tied to a specific list in section 10 of the Umsatzsteuergesetz rather than to a broad category, so the rate on a receipt depends on the exact item rather than the aisle it came from.
The 13 percent rate covers live animals, plants and seeds, firewood and wood pellets, admission to cultural venues such as theatres and museums, entry to sporting events and to swimming and thermal baths, works of art and antiques, and wine sold straight from the producer’s own farm. The 10 percent rate is the broad reduced band: rent on residential housing (heating billed separately), hotel and guest accommodation, restaurant and catering meals, books, newspapers and periodicals, passenger transport by road and rail, medicines, and repairs to shoes, bicycles and clothing.
The newcomer is a 4.9 percent rate that took effect on 1 July 2026. Austria’s Federal Ministry of Finance introduced it on a short list of unprocessed basic foods: milk including lactose free milk, yoghurt, butter, fresh hen eggs, fresh, chilled or frozen vegetables, pome and stone fruit, rice, wheat flour and semolina, plain uncooked pasta, bread and table salt. The relief stops the moment food is processed, combined or served. A plain loaf from the bakery counter qualifies; the same loaf turned into a filled roll, or handed over with a coffee, moves back to the higher catering rate. The Chamber of Commerce publishes the full list.
Two alpine pockets run on their own number. Jungholz and Mittelberg, reachable by road only through Germany, apply a 19 percent standard rate, one point under the national figure, a leftover of their old customs ties with the neighbour next door.
Adding and removing the tax
Adding VAT to a net price is direct multiplication. At the standard rate, multiply the net figure by 1.20, so a service quoted at 500 euros net becomes 600 euros gross. For the reduced bands, multiply by 1.13, 1.10 or 1.049 instead.
Pulling the tax back out of a gross price is where people slip, because you cannot just take 20 percent of the total. At 20 percent the tax sitting inside a gross price is exactly the total divided by six: a 600 euro invoice holds 100 euros of VAT and 500 euros of net value. For the 10 percent band the hidden tax is the gross divided by eleven, and at 13 percent it is the gross multiplied by 13 and then divided by 113. The Austria VAT calculator runs either direction at any rate, which beats reaching for the right fraction each time.
Who has to register and charge it
Small traders can stay outside the system. The Kleinunternehmer exemption lifts VAT off businesses whose annual turnover stays at or below 55,000 euros, a ceiling raised from 35,000 euros on 1 January 2025. There is a cushion at the top: go over the limit by no more than 10 percent in a year and the exemption still holds until the year ends, so one strong month does not drag you into backdated tax. A business under the exemption charges no VAT and files no return, but it also cannot reclaim the VAT on its own purchases, which is why some register voluntarily anyway.
Once inside the system, VAT is a pass through rather than a cost. A registered business adds it on sales, subtracts the VAT it paid on supplies, and sends the difference to the Finanzamt. The charge lands on the final consumer, which is why it never touches the take-home figure in the Austria salary calculator or the bands in the income tax calculator. Those cover what leaves your pay; VAT is what your spending picks up afterwards.
FAQ
What is the standard VAT rate in Austria for 2026? 20 percent, applied to most goods and services. Reduced rates of 13, 10 and 4.9 percent cover specific lists, and the enclaves of Jungholz and Mittelberg use 19 percent.
What does the new 4.9 percent rate cover? Selected unprocessed basic foods from 1 July 2026: milk, yoghurt, butter, fresh eggs, fresh and frozen vegetables, pome and stone fruit, rice, flour, plain pasta, bread and salt. Processing or serving the food moves it back to a higher rate.
How do I work out the VAT already inside a gross price? At 20 percent, divide the total by six. At 10 percent, divide by eleven. At 13 percent, multiply by 13 and divide by 113. The VAT calculator does each rate without the fractions.
When must a business register for VAT? When taxable turnover passes 55,000 euros in a calendar year, with a 10 percent tolerance that keeps the exemption valid until year end. Below that, registration is optional and lets a business reclaim its input VAT.
Is the 4.9 percent food rate permanent? It was written into section 10 of the VAT Act as a standing measure rather than with a stated end date, but reduced food rates are the kind of relief governments revisit, so check the current position before counting on it for the long term.
Sources: Reduced VAT rates, 4.9%, 10% and 13% (Austrian Chamber of Commerce, WKO), VAT cut on selected foods (Federal Ministry of Finance), Small business VAT exemption (USP, Austrian Business Service Portal). This is general information, not tax advice.