- 🔹 Austria has enacted a new 4.9% super-reduced VAT rate for a defined basket of staple foods — including milk, yoghurt, butter, eggs, vegetables, fruit, rice, flour, pasta, bread, and salt — effective 1 July 2026, replacing the current 10% reduced rate. [vatupdate.com]
- 🔹 The reform introduces a hierarchical cascading structure for reduced rates (4.9% → 10% → 13%), improving legal clarity and eliminating ambiguity where goods could potentially fall under multiple reduced-rate categories. [vatupdate.com]
- 🔹 Product eligibility is defined by precise Combined Nomenclature (CN) codes, requiring businesses to carefully verify tariff classifications to confirm VAT treatment, and the mid-year effective date creates transitional compliance obligations for advance payments and continuous supplies. [pwc.at]
Article: Austria’s Value Added Tax Reform Act 2026, published in the Official Gazette on 10 June 2026 (BGBl. I 37/2026), formally introduces a 4.9% super-reduced VAT rate on selected essential food items from 1 July 2026. The measure — approved by the Austrian Parliament’s lower house on 21 May 2026 — effectively halves the tax burden on everyday grocery spending. Eligible products are defined by reference to Combined Nomenclature (CN) codes and include milk (including lactose-free), yoghurt, butter, fresh eggs, fresh and frozen vegetables, selected fruits, rice, wheat flour and semolina, uncooked unfilled pasta, bread, and table salt. A key structural innovation is the new cascading hierarchy: the 4.9% rate takes precedence where applicable, followed by 10% and then 13%. This eliminates classification ambiguity and simplifies audit controls. Businesses must implement cut-over controls for supplies spanning the June–July transition, including correct treatment of advance payments and continuous supply contracts. The reform is counter-financed through measures including a non-recyclable plastics tax and fees on parcels imported from third countries. [vatupdate.com], [vatcalc.com]
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