Austrian VAT declaration / Umsatzsteuervoranmeldung 2020

Following up on my latest blog, let me continue with the specific setup for the VAT return in Austria. This electronic VAT declaration called Umsatzsteuervoranmeldung “UVA” must be uploaded monthly or quarterly (depending on the company’s turnover) in a proprietary XML format to the web site FinanzOnline of BMF, the Austrian Ministry of Finance. The interface is well maintained by the DACH support team for Dynamics, but there was nowhere on the Internet a description of the barebone setup. Well, up until now.

The only documentation is the class TaxReport_ReportAT, which is used by the periodic function VAT payment in the Tax module to produce a “UVA” declaration, both printed and the electronic. I reverse engineered it, and it should be noted that

It requires a non-continuous number sequence XML VAT package number to form a message ID.
The printed PDF version is not accepted by the ministry anymore, but it is quite useful to visualize and check the VAT return prior to the booking. The latest template required by the class can be downloaded here.
The printed form expects an exotic address format of the legal entity primary address, one with a separate house number Street number.
The tax number (not to mix with the European VAT (UID)-number) MUST be present in the legal entity, Tax registration number field in the format xxx/yyyy-ZZ, where ZZ is the number of the BMF’s local office. The same can be seen without dashes and slashes on FinanzOnline.
The class uses a set of hardcoded 4 digit codes to map tax codes to cells on the tax return. There are cells (and the respective XML elements) for a total tax base per tax period per VAT rate, or a tax amount per tax period per VAT rate.

Below are the most relevant VAT return cell codes. For more information on the individual VAT return cells, please refer to the comprehensive description (de-at) on the BMF site.
You should add the 16 codes to the table VAT reporting codes with the Report layout = Austrian report layout.

Reporting code	Report text	Brief description
1122	Gesamt Umsatzsteuer: 20% Normalsteuersatz	Total sales VAT: full 20%
1022	Gesamt Bemessungsgrundlage: 20% Normalsteuersatz	Total sales base: full 20%
1011	Bemessungsgrundlage: Ausfuhrlieferungen § 6 Abs. 1 Z 1 iVm § 7	Sales base: Export 3rd country tangible
1021	Bemessungsgrundlage: Steuerschuldübergang § 19, grenzüberschreitende Leistungen	Sales base: Reverse charge incl. export of services IC, 3rd
1020	Bemessungsgrundlage: übrige steuerfreie Umsätze ohne Vorsteuerabzug	Sales base: Other exempt sales
1017	Bemessungsgrundlage: IgL Art. 6 Abs. 1 ohne Fahrz	Sales base: IC delivery
1160	Vorsteuer ohne…	Total purchase VAT except for…
1157	Steuerschuldübergang bei Bezug gemäß § 19 Abs. 1 zweiter Satz, § 19 Abs. 1c	IC purchase payable VAT: Reverse charge on service acquis
1166	Vorsteuer: Steuerschuldübergang gemäß §19, grenzüberschreitende Leistungen	IC purchase receivable VAT: reverse charge on service acquis
1183	Vorsteuer: Einfuhrumsatzsteuer geschuldet (§ 12 Abs. 1 Z 2 lit. b)	Purchase 3rd country import VAT (payable)
1172	IgE Steuerschuld: 20% Normalsteuersatz	IC purchase payable VAT: full 20%
1072	IgE Bemessungsgrundlage: 20% Normalsteuersatz	IC purchase payable base: full 20%
1106	Gesamt Umsatzsteuer: 13% ermäßigter Steuersatz	Total sales VAT: reduced 13% (agro B2C)
1006	Gesamt Bemessungsgrundlage: 13% ermäßigter Steuersatz	Total sales base: reduced 13% (agro B2C)
1129	Gesamt Umsatzsteuer: 10% ermäßigter Steuersatz	Total sales VAT: reduced 10% (foodstuffs, print media)
1029	Gesamt Bemessungsgrundlage: 10% ermäßigter Steuersatz	Total sales base: reduced 10% (foodstuffs, print media)

Finally, the above 16 reporting cells are assigned to my 12 VAT codes in the VAT codes table:

Report setup

exF

exS

euF

euA

euR

euS

doF

doA

doH

doR

Taxable sales

1022

1006

1029

Duty-free sale

1011

1021

1017

1021

1020

VAT payable

1122

1106

1129

Taxable purchases

Duty-free purchase

VAT receivable

1160

Taxable import

1072

1073

Offset taxable import

Import VAT/ purchase VAT

1183

1172

1173

1157

Offset import VAT/ purchase VAT

1166

(EU sales list excluded)

yes

(Country type)

3rd

Dom

The Report setup – credit note of the VAT code records is identical.

The full list of the Austrian VAT reporting codes can be downloaded here. The not relevant codes are marked “N/A”. My criteria for the relevance for a typical manufacturing or a service business were:

Reselling of cars, scrap, gas, electricity, CO2 certificates are ‘exotic’ businesses, as well as seafaring, trucking, taxi services, real estate agencies;
Small businesses below the 100 000 EUR turnover threshold would never use Dynamics AX either;
The Jungholz and Mittelberg exclave valleys with the German VAT are too small to get noticed;
It is not practical to apply a dedicated tax code to goods intended for the self-consumption by the company owner: such goods do not reduce the income/corporate tax base either and should better not appear in the accounting at all, or be simply sold to the owner via a sales order as everything else.

Happy tax paying!

Blog series on Finance and VAT in the EU

Minimalistic EU VAT Configuration in Dynamics AX

Introduction

Let me present my 4th iteration of the EU VAT setup in Dynamics. The below concise VAT configuration in Dynamics 365 for Finance has been tested over 3 years of my operations. It has been constantly updated with the changes in taxation. It covers intra-community import, export and import of services within the European Union and beyond, domestic supplies, travel within the EU and abroad.

Before we begin with the setup let me explain some background facts and assumptions:

- Any export of goods or services in or outside of the European Community is tax-free, but reported
- An export of services is special: in accordance with Directive 2008/8/EC any service rendered for customers abroad is subject to reverse charge
- In the case of an intra-community (IC) delivery, goods and services are presented separately on the EU Sales List
- On the contrary, goods and services delivered in the home country are reported together and should not be distinguished
- Intra-community deliveries are reported separately from the foreign trade with the so-called 3rd countries (i.e. countries which are not the 28 members of the EU, e.g. Norway or Switzerland). IC trade appears of the EU Sales list, while 3rd country trade does not, but it is reported to the INTRASTAT instead.
- Most of the countries apply a full rate and several reduced rates. The reduced rates are there mostly for the basic consumer services and goods (Austria: 10%). They normally do not affect enterprises, until the employees start reporting travel expenses.
- A semi-reduced “hotel” rate of 13% stands out in Austria, but also in Switzerland and France for accommodation. Update 2018: 13% were reverted back to 10% in Austria, but I am going to keep it in my scheme.
- A grocery may have separate tax codes for an IC acquisition of Polish potatoes (self-assessed 10%) or French wines (self-assessed 13%). However, the reduced-% goods and services are rarely imported by manufacturing or professional service businesses, with the exception of foreign books and printed media (self-assessed 10%).
- In Switzerland, the VAT receivable from investments is reported separately from the VAT received from current assets or services (de-ch: “Vorsteuer auf Investitionen und übrigem Betriebsaufwand” vs “Vorsteuer auf Material- und Dienstleistungsaufwand“) despite the same rate.
  Since 2019, a similar aspect has become valid in Austria too. The mandatory Chamber of Commerce contribution (de-at: “Kammerumlage 1” or KU1) is evaluated at 0,29% of the total VAT receivable excluding any investments i.e. assets acquired either domestically or abroad.
  The reduced VAT (foodstuffs, pharmaceuticals) may be neglected: milk is unlikely to become a long-term asset, unless condensed 😉
- From the system point of view, there is a difference between a “zero rate” and “no rate”. A tax code with a 0,00 rate still logs the tax base for reporting, as long as a record in the tax Values table exists.
- From the fiscal standpoint, there is a difference between a “zero” an “no” rate too. For example, in the UK public transportation is taxable at 0% which is considered a tax rate of its own. In France, 0% is applied to newspapers. To enable a zero rate, just open the Values table in connection with the tax code, let the system create a record, leave the Value = 0,00000 and save the record.
- It is a good practice to have a valid tax code, i.e. a valid Customer/Item group combination in every business case whenever it is reported on the tax declaration or not. This is enforced by keeping the tax parameter Check VAT groups active. For example, on a business trip from the UK to Hungary the VAT may theoretically be recovered, but hardly any company does it. The tax codes TF and NR below help stay compliant to the Check VAT groups setting.

VAT codes (en-us: Sales tax codes)

Tax code	Name	Rate AT	Example
vatF	Domestic VAT, full	20%	Sales or purchase of regular goods and services, e.g. raw materials, office consumables, car expenses (electric cars or ‘fiscal cars’ only)
vatA	Domestic VAT from assets, full	20%	Investments in long-term assets, i.e. machines, office equipment, electric car fleet
vatH	Reduced “hotel” rate	13%	This reduced rate applies to accommodation, but not restaurant bills
vatR	Domestic VAT, reduced	10%	Public transportation, taxi, and basic foodstuffs, including restaurant bills with non-alcoholic beverages, books and newspapers
TF	Tax free Out of scope	0%	Exempt international air and sea transportation, or services delivered by “non-genuine” tax exempt suppliers such as insurances, postal services (de-at: “unechte Steuerbefreiung“), but also the City tax (de-at: “Tourismusabgabe“, “Ortstaxe“) component on hotel bills. The base on purchases may still be reported to the authorities.
NR	Not recoverable	–	On a travel abroad, services consumed by the employee are taxable per se, and within the European Community the tax may even be recovered, but very few companies do so. The code is not reported to the authorities. Running expenses from traditional personal cars with internal combustion engines fall into this category too.
euF	IC export IC acquisition	0% 20%	Delivery of goods to another country of the European Community is tax free, but the value of the goods is reported to the tax authority. On a regular import of goods from another member of the European Community the full domestic tax is levied; the tax is self-assessed with a zero effective tax load (what you pay is what you get recovered). This is achieved with the Use tax (en-us) i.e. Import VAT / purchase VAT (en-gb) setting in the VAT group.
euA	IC asset export IC asset acq.	0% 20%	It is highly likely, that the investments into long-term assets (machinery, other equipment) go into another EU country. Less probably but also possible, is that used assets are sold into an EU country.
euR	Reduced IC export IC acquisition	0% 10%	Delivery of goods to another country of the European Community is tax free, but the value of the goods is reported to the tax authority. On goods that would be subject to the reduced tax rate domestically (e.g. books), the same reduced tax rate is applied when procuring such goods from another member of the EU; the tax is self-assessed with a zero effective tax load and the Use tax setting in the VAT group.
euS	IC services export IC services import	0% 20%	Delivery of services in another country of the European Community is tax free but reported. The buyer, however, must obey the reverse charge principle. The setup for the reverse charge and the zero tax impact is similar to the above IC goods acquisition.
3rdF	Export 3rd county Import 3rd country	0% ~20%	The export of goods is tax free in most of the countries, but the value has to be reported. Tangible goods imported into the EU from a 3rd country is subject to an import tax, whose base is hard to calculate because it includes the portion of insurance and freight up until the border. Normally the import tax is calculated and paid by the customs broker; in the exotic import tax self-assessment mode (de-at: “Einfuhrumsatzsteuer geschuldet”) this 3rdF tax code may be used to post the tax.
3rdS	Services export 3rd Services import 3rd	0% 20%	If the place of supply of services is outside of the EC, the export is tax-free but still have to be reported (as taxable elsewhere under the reverse charge regime). The procurement of services outside of the EC is subject to a self-assessed reverse charge.

VAT groups (en-us: Sales tax groups)

In every business case in Dynamics 365 for Finance, the tax code is deducted by the system from an intersection between the customer/supplier VAT group and the product Item VAT group. Aside of the basic “F”, “S”, “TF” item VAT groups I recommend “H”, “Food” and “PubT” for the travel expense reporting. The reason to separate the latter 2 groups is my reverence to companies recovering foreign taxes: tax rates for these categories vary across Europe.

The group AP-NR is used in the Travel and Expense module to have a formal tax code TF even if the VAT is not recoverable, and satisfy the Check VAT groups validation in the tax module.

Tax codes to be marked Exempt in the VAT group configuration are stroke through in the table below, and those marked as a Use tax are in italic:

Customer or supplier VAT group	Item VAT group “F” (full)	Item VAT group “A” (assets)	Item VAT group “S“ (services)	Item VAT group “TF“ (tax free)	Item VAT group “H” (hotel)	Item VAT group “Food“	Item VAT group “PubT“ (public transp.)
*Suppliers*
AP-DOM	vatF	vatA	vatF	TF	vatH	vatR	vatR
AP-EU	euF	euA	euS	TF		euR
AP-3RD	3rdF		3rdS	TF
AP-NR	NR	NR	NR	NR	NR	NR	NR
*Customers*
AR-DOM	vatF	vatA	vatF	TF	vatH	vatR	vatR
AR-EU	euF	euA	euS	TF		euR
AR-3RD	3rdF		3rdS	TF

Disclaimer

The above configuration is going to work well in the D-A-CH countries, in Scandinavia, and even in Spain. Yet it doesn’t account for the “VAT on payment” aka Conditional tax common in France (de: “IST-Besteuerung“), and it will probably not work for countries with inflated reporting requirements (Italy).

This blog is followed by Part 2 – selection of the VAT reporting codes for the Austrian VAT declaration.

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