On 10 October 2019, the upper house of the Austrian Parliament (Bundesrat) approved the bill on the new digital advertising tax package (Digitalsteuerpaket). The lower house of the Austrian Parliament (Nationalrat) approved the bill on 19 September 2019.
Under the digital tax bill, a new tax of 5% on revenue derived from online advertising will be introduced effective 1 January 2020. The 5% tax on Austrian digital advertising revenue applies to companies with worldwide annual turnover of €750 million or more and annual turnover of €25 million or more in Austria.
With respect to Value Added Tax (VAT) rules applicable to online purchases of goods sold by third-country sellers, under the bill the current exemption for goods with a value of less than €22 will be abolished effective 1 January 2021. Also effective 1 January 2021, the supply threshold for distance selling from European Union (EU) countries to non-entrepreneurs in Austria (which currently stands at €35,000) will be abolished, with the impact that distance selling from other EU countries to non-entrepreneurs in Austria will be subject to Austrian VAT from the first Euro. Sales made by small businesses (of up to €10,000 annually) will still be subject to VAT in the other state.