Retailers will soon have to pay two euros per delivery delivered in Austria to the tax office. Dealers with sales of less than 100 million euros per year are excluded. The Austrian federal government has decided this. Sounds simple, but the details are complicated. The new “package levy” is expected to bring in 280 million euros and thus finance part of the decision to halve the VAT on selected foodstuffs. This measure tears a hole of 400 million euros in the budget, which should be closed.
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Vienna originally planned to only collect its parcel tax on parcels from third countries under the banner of protecting stationary retail. But that would be a tariff, and since the European Economic Area (EEA) is a customs union, Austria cannot impose new tariffs on its own. So the parcel levy now also applies to parcels that arrive from within the EEA – in addition to the tariffs decided at EU level.
From July onwards, three euros will be due in the EEA for every parcel arriving from abroad with a value of up to 150 euros. From November onwards, a processing fee will be charged by all EU states. There is talk of two euros per package. It should not be confused with the significantly higher processing fees charged by carriers and customs service providers.
Difficult enforcement in third countries
It is unclear whether the sales threshold of 100 million euros in annual sales applies worldwide, only to the EEA, or only to sales in Austria, and whether it only concerns sales from online trading, or from trading itself, or from total sales. It is also uncertain how third-party retailers who sell through large platforms such as Amazon.com will be treated. But even if only domestic online retail sales of individual retailers are taken into account, the parcel levy by no means only affects large corporations such as Amazon and Temu.
For example, Otto Austria, Ikea and its competitor XXXLutz, Mediamarkt and, ironically, supermarket chains with home delivery would be affected. Food in particular should become cheaper. The Carinthian retailer Electronic4you also has to pay, which is particularly painful in the tough price war for electronics. The trade association points out that the sales threshold for Asian retailers is difficult to control. In fact, it is difficult to imagine how Austrian finance will efficiently determine whether or how a Far Eastern 176-671 AG is linked to a 176-617 AG.
The devil is in the details
The announcement leaves many more questions unanswered. Can the retailer show the parcel delivery separately and charge it directly to the customer? Or does he have to factor it into the price of the goods or the delivery costs and then generally add 20 percent sales tax? The two euros would quickly become 2.40 euros per package for consumers.
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What exactly is “a package”? Are multiple boxes or baskets delivered together considered separate deliveries, even if they come from the same sender? This would be an incentive for additional packaging, such as wrapping in otherwise unnecessary plastic film. What applies to flower deliveries to the cemetery or restaurant orders? Is the delivery of a replacement device under warranty also taxed? Or the delivery of a repaired device? How are incorrect deliveries or lost packages taken into account?
Where is the line between tax-free “picking up the goods in the store” and taxed “depositing a package in a branch”? What about ongoing obligations, such as the regular delivery of printer ink? Or if an order can only be partially fulfilled and will be delivered later? Are affiliated companies allowed to send and charge each other for items without paying parcel taxes? There will probably be an exception for subscriptions to newspapers and magazines; but would the current Yps booklet be about the printing press or the prehistoric crabs? What about individual periodicals, say a back-ordered edition of c’t? Austria’s lawyers and tax investigators don’t have to worry about work.
Company cars, plastic and food
Even if the package levy brings in 280 million euros, there will still be a gap of 120 million euros. This should actually be closed through a tax on plastic packaging. After violent protests from business, the Austrian government is refraining from doing so. According to the grocers, the plastic tax plus administrative costs would have cost more than the reduction in sales tax, meaning food would have become more expensive overall.
Instead of the plastic tax, the Austrian government now wants to tax company cars higher – how exactly is being worked out. In any case, there is an “appropriateness limit” of 40,000 euros per new car that has not been adjusted for 21 years. The Vienna Chamber of Commerce is calling for this limit to be raised and arguing with the mobility transition. Companies account for more than 70 percent of all new registrations of electric and hybrid vehicles in Austria, and such vehicles usually cost significantly more than 40,000 euros.
The sales tax rate for selected foods is to fall from ten to 4.9 percent. This applies to animal milk without additives (i.e. not cocoa milk etc.), yoghurt, butter, chicken eggs, vegetables (fresh and chilled), fresh stone fruit as well as fresh apples, pears and quinces, bread and pastries (unless they contain honey, eggs, cheese or fruit), unfilled pasta, rice, wheat flour and semolina and table salt. In catering establishments, the full tax rate of ten or twenty percent continues to apply even when selling such food, for example a fresh pear or a glass of milk.
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