Most people assume VAT is a single percentage. It isn’t. Almost every EU country applies different rates to different categories of goods and services — and Austria, with four active VAT brackets, is one of the most instructive examples to understand why this matters for your invoices.
Why multiple rates exist
Governments use reduced VAT rates as a policy lever. Essentials like food, medicine, and public transport are taxed lightly (or not at all) to keep them affordable. Luxury goods and general services get the full standard rate. The result is a tiered system where a caterer, a pharmacist, and a software consultant can all be VAT-registered but charge entirely different percentages.
Austria’s four VAT brackets
Austria (BMF — Bundesministerium für Finanzen) applies the following rates:
| Rate | Category | Common examples |
|---|---|---|
| 20% | Standard | Consulting, software, electronics, clothing, most services |
| 13% | Intermediate | Accommodation, wine from producers, live animals, cultural events, domestic flights |
| 10% | Reduced | Basic food, books, newspapers, medication, public transport, cinema |
| 5% | Super-reduced | Certain publications, ebooks, some cultural venues |
The 20% standard rate is the default — it applies unless there is a specific legal provision reducing it. The lower rates are defined category by category in Austrian law, which means a minor difference in what you’re selling can change your rate entirely. A hotel room is 13%; the mini-bar in that room is 20%.
Rates can change. Always verify the current applicable rate with the Austrian BMF or a local tax adviser before issuing invoices.
How Austria compares to its neighbours
If you operate across borders, it helps to know the range you’re dealing with:
| Country | Standard | Reduced rate(s) |
|---|---|---|
| Austria | 20% | 13%, 10%, 5% |
| Germany | 19% | 7% |
| Greece | 24% | 13%, 6% |
| France | 20% | 10%, 5.5%, 2.1% |
Germany’s two-rate system is straightforward: 19% for most things, 7% for food, books, and a handful of other categories. France goes further than Austria with four rates. The point is that there is no single European standard — every country sets its own brackets within EU minimum/maximum rules.
The practical problem this creates
Once you’re VAT-registered, you can’t apply a single percentage to every invoice and call it done. You need to look at each line item and apply the rate that legally corresponds to it. A single invoice to a restaurant supplier might include items at three different rates: 20% on cooking equipment, 13% on wine, and 10% on flour.
This is genuinely complicated. Accountants who specialise in VAT spend significant time just on rate classification.
How Billino handles it
Instead of asking you to enter a percentage, Billino uses item categories — labels like Standard, Reduced, Second Reduced, and Super Reduced. When you create a product or service, you pick its category. Billino knows what percentage each category maps to in your jurisdiction: for an Austrian account, Standard is 20%, Reduced is 10%, Second Reduced is 13%, and Super Reduced is 4.9%. You never type a rate.
Those categories travel with the item. Every future invoice that includes the product automatically carries the correct rate, calculated by Billino’s server. If you sell across categories — standard consulting alongside a book — each line item shows its own rate and tax amount, and Billino groups and totals them correctly without any manual work on your part.
This also means Billino’s rates stay accurate as legislation changes: when a country adjusts a bracket, the update happens on the server and flows through to every invoice without you touching anything.
For an overview of when you even need to charge VAT, see our VAT basics guide.
