What is the small business threshold in 2026?

Since 1 January 2025 the threshold has been €55,000 gross turnover per calendar year — this also applies in 2026. There is also a tolerance rule: if you go over the threshold by no more than 10% (so up to €60,500), the exemption still holds for the current year.

What happens if I go over the threshold?

Up to €60,500 (the 10% tolerance) the exemption still applies for the current year; from the following year you are liable for VAT. If you also exceed the tolerance threshold, the amount above it already becomes taxable.

Do I have to apply for the small business VAT exemption?

No. It applies automatically if your turnover is below the threshold. You can, however, voluntarily opt out of it (standard taxation) if you want to deduct input tax — you are then bound by that choice for five years.

Do I pay no tax at all as a small business?

No, you still pay tax — the exemption only concerns VAT. You still pay income tax once your annual profit is above the tax-free threshold (2026: €13,539). And SVS contributions run independently of this.

Does the small business VAT exemption have anything to do with the SVS?

No. The small business VAT exemption concerns only VAT. The SVS has its own, similarly named rule — the micro-business exemption: on request, it exempts you from health and pension insurance if your turnover is below €55,000 and your profit is below €6,613.20. The two rules apply independently of each other.

Becoming self-employed

Small Business VAT Exemption: No VAT up to €55,000 Turnover

The small business VAT exemption makes starting out easy: you charge no VAT, you do not file VAT prepayment returns, and your prices stay lower for private clients. Here is how it works — as of 2026.

Last updated on 20.07.2026 · All figures as of 2026, without guarantee

What is the small business VAT exemption?

Anyone in Austria with a maximum of €55,000 turnover (gross) per calendar year is exempt from VAT.^[1] In practice, this means:

You charge your clients no VAT — your prices are final prices.
You do not file VAT prepayment returns — less paperwork.
In return, you may not deduct input tax — you do not get back the VAT on your purchases.

Turnover threshold: €55,000; gross per calendar year, since 2025
Tolerance threshold: €60,500; +10% — exemption still applies for the current year

Why is this good for you if you work for private households?

Private clients cannot claim back VAT. If you do not have to charge VAT, your hourly rate is up to 20% cheaper for clients — or you keep more of it yourself. For cleaners, garden help, tutoring, and care work, this rule is therefore almost always the best choice at the start. You can read how to set your prices wisely in the guide Self-employed as a cleaner.

When is opting out of the exemption worth it?

You can voluntarily switch to standard taxation and then deduct input tax. This is only worth it if you have high expenses with a lot of VAT (machinery, a vehicle, materials) and work mainly for business clients, who claim back the VAT anyway. Note: once you opt out, you are bound for five years.^[1] If in doubt: do the maths first, then decide.

Keep an eye on the threshold

The €55,000 refers to turnover (all income), not profit. If your business grows, check during the year where you stand — otherwise the VAT liability will catch you by surprise. bop shows you continuously how close you are to the threshold.

What does this mean for your invoices?

As a small business, you write invoices without VAT and with a note about the tax exemption, for example: "VAT-exempt under the small business VAT exemption (§ 6 Abs 1 Z 27 UStG)." All the other mandatory details — from the sequential number to the service period — are covered in the guide Writing invoices.^[4]

How does this connect to the SVS and income tax?

SVS: runs independently of VAT. Your contributions are based on profit — details in the guide SVS explained simply. Despite the similar name, this is a separate rule: the micro-business exemption — on request, it exempts you from health and pension insurance if turnover is below €55,000 and profit is below €6,613.20.^[3]
Income tax: applies once your annual profit is above the tax-free threshold (2026: €13,539) — regardless of whether you are a small business or not.^[2]
Records: you still need income-expense accounting. Keeping clean records pays off.

Do you have to keep track of all this yourself?

No. bop writes your invoices automatically with the correct small-business note, tracks your turnover, and warns you before you get close to a threshold — explained in your language. You can find the full roadmap to starting up at Becoming self-employed in Austria.

Frequently asked questions

: Since 1 January 2025 the threshold has been €55,000 gross turnover per calendar year — this also applies in 2026. There is also a tolerance rule: if you go over the threshold by no more than 10% (so up to €60,500), the exemption still holds for the current year.
: Up to €60,500 (the 10% tolerance) the exemption still applies for the current year; from the following year you are liable for VAT. If you also exceed the tolerance threshold, the amount above it already becomes taxable.
: No. It applies automatically if your turnover is below the threshold. You can, however, voluntarily opt out of it (standard taxation) if you want to deduct input tax — you are then bound by that choice for five years.
: No, you still pay tax — the exemption only concerns VAT. You still pay income tax once your annual profit is above the tax-free threshold (2026: €13,539). And SVS contributions run independently of this.
: A note about the tax exemption, for example: "VAT-exempt under the small business VAT exemption (§ 6 Abs 1 Z 27 UStG)." Without this line, the invoice is not correct.
: No. The small business VAT exemption concerns only VAT. The SVS has its own, similarly named rule — the micro-business exemption: on request, it exempts you from health and pension insurance if your turnover is below €55,000 and your profit is below €6,613.20. The two rules apply independently of each other.

Sources

Official information, retrieved on 20.07.2026:

WKO: Kleinunternehmerregelung (Umsatzsteuer) — Threshold, tolerance rule, opting out
BMF: Steuertarif und Steuerabsetzbeträge — Income tax brackets
WKO: Sozialversicherung der Kleinunternehmer — SVS micro-business exemption
WKO: Erfordernisse einer Rechnung — Mandatory details, including the small business note

This article was partly researched, translated and written with the help of language models (AI). We check the content carefully, but errors can still slip in — please cross-check important details with the official sources linked above.

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