The question whether the tax liability should be transferred to the tenant when a foreign entrepreneur rents out a domestic property to a domestic entrepreneur and does not have a permanent establishment (PE) in Austria was raised for the first time over 20 years ago. At that time the Austrian tax authorities adopted a practical solution und took the following stand in margin note 2601b of the Guidelines on Turnover Tax 2000 (VAT Guidelines 2000):
“A trader, who owns immovable property in Austria that he or she lets subject to tax, must be treated as a national trader regarding the rental turnover. The rental turnover resulting from that transaction has to be declared via tax assessment.”
The Federal Ministry of Finance now takes the following view in margin note 2601b of the VAT Guidelines 2000: “As of January 1st, 2022, a trader who owns immovable property in Austria that he or she lets subject to tax, must be treated as a national trader only if the owner of the property employs his or her own staff authorised to autonomously perform services related to the letting (see ECJ 3.6.2021, in case C- 931/19, Titanium Ltd.). “
Source TPA
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