Austria’s 2025 Tax Reform for Small Businesses

Austria’s 2025 tax reform introduces significant relief for small businesses, including a higher VAT exemption threshold of €55,000, simplified invoicing for amounts over €400, and a planned exemption from issuing receipts for payments under €35. Additional measures include a NoVA tax exemption for light commercial vehicles starting July 2025 and streamlined approval processes to reduce red tape and support SME growth.

 

Starting in 2025, Austria is introducing a set of tax reforms aimed at lowering the tax burden, modernizing the system, and supporting small and medium-sized enterprises (SMEs). The changes are designed to encourage investment, simplify administration, and help new and growing businesses.

What are the changes?

• Higher VAT Exemption Threshold

From January 1, 2025, businesses with annual revenue up to €55,000 (up from €35,000) will be exempt from VAT. This helps small businesses and freelancers reduce compliance costs.

• Simplified Invoicing Rules

Businesses can issue simplified invoices for amounts over €400, as long as they include six required details: date, issuer, address, service description, total amount, and VAT rate. If VAT exemption applies, it must be noted on the invoice.

Additional tax relief for SMEs:

• NoVA Tax Exemption

NoVA stands for Normverbrauchsabgabe, which translates to Standard Consumption Tax in Austria. It is a one-time tax that applies when a new vehicle is first registered in Austria.

Light commercial vehicles will be exempt from the NoVA tax starting in July 2025.

• Receipt Exemption for Small Payments

Businesses will no longer be required to issue receipts for payments under €35. The Austrian government announced plans to abolish the mandatory issuance of receipts for purchases up to €35, it is still not officially confirmed.

• Faster Approvals and Less Red Tape

The government plans to speed up business approvals and reduce administrative barriers.