The "Titanium" verdict

Since January 1, 2022, foreign landlords in Austria must issue their invoices to leased-in companies without VAT if they have no staff in Austria. If this remains unconsidered, the tenants, for their part, cannot claim input tax. Many consulting cases of the tax consulting and auditing company Mazars show that this regulation has not yet arrived in practice.

Verena Ziegler, Local Partner at Mazars Austria:

"We see that there is still a lot of need for information in this context. This is not only problematic for the issuer of the invoice, who, if he places it as has been the case up to now, owes the falsely stated tax, but also for the recipient of the invoice, as he cannot deduct such VAT as input tax."

The verdict called "Titanium" by the European Court of Justice brought a change in the view of the Austrian tax authorities. And it has far-reaching consequences for commercial tenants of foreign real estate providers who do not have their own staff in Austria to provide rental services. All taxable rental transactions by a foreign entrepreneur to other entrepreneurs are therefore subject to a so-called "reverse charge procedure" with immediate effect, according to which the tax liability is transferred to the recipient of the service.

Foreign landlords must consequently issue rental invoices to commercial tenants without VAT and must indicate in their invoices with immediate effect that the tax liability is transferred to their contractual partner.