Supreme Administrative Court has confirmed VAT liability for roaming services – It is time to act now

Whenever customers of foreign telecommunication providers use their phones or tablets in Austria, two services are provided simultaneously from a VAT point of view. First, an Austrian telecommunication provider operating the mobile network will perform a telecommunication (roaming) service to the foreign (non-EU) telecommunication provider. At the same time, the foreign telecommunication provider will provide a service to its (non-EU) customer. Until recently, it was unclear if any of these two services are subject to VAT in Austria.


In order to avoid double taxation, non-taxation or distortion of competition Austria has implemented provisions based on Art. 59a EU VAT Directive shifting the place of supply for certain telecommunication services to Austria if the services are used in Austria (so called “Use and Enjoyment Rule”).

However, due to contradictory jurisdiction it was questionable if and to what extent these provisions are in line with Austrian and EU VAT law in the past.

Supreme Administrative Court Ruling.

In November 2018 the Austrian Supreme Administrative Court ruled that the Austrian “Use and Enjoyment Rule” provisions are in line with both national and EU law. Therefore, both services mentioned in the introduction are subject to VAT in Austria resulting in both input VAT incurred and VAT payable for the foreign telecommunication provider.

However, it is still unclear whether the “Use and Enjoyment Rule” also applies to cases where a comparable taxation exists in the foreign country. Apparently the Austrian tax authorities are not making a distinction in this regard. While the aforementioned ruling does not expressly address the issue of VAT , it is important to note the telecommunication provider in the case at hand is based in Saudi Arabia and VAT was only introduced years after the services in question were performed.


The Austrian tax authorities have started to act on the Supreme Administrative Court’s ruling by issuing VAT assessments and initiating VAT audits for foreign telecommunication providers. Moreover, it is highly likely that financial criminal proceedings will be initiated against the affected companies and their representatives and employees at a later stage.

We are already aware of proceedings against telecommunication providers based in the USA and Japan. Understandably, the Austrian tax authorities seem to prioritize telecommunication providers that filed input VAT refund claims in Austria in the past. Given that the Austrian tax authorities obtained a complete list of all telecommunication providers that received roaming services from Austrian providers, we would assume that it is only a matter of time until other affected companies will be put under scrutiny as well.

Conclusion and recommendation.

All affected companies should register for VAT purposes in Austria and start filing VAT returns for current and previous periods (unless statute-barred). At the same time, a voluntary self-disclosure within the meaning of Sec 29 Austrian Financial Criminal Act should be filed in order to mitigate the risk of financial criminal proceedings. Since these are highly technical proceedings and any technical mistakes may result in the initiation of criminal proceedings against an affected company and their representatives and employees, we highly recommend consulting with an Austrian tax adviser beforehand.

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