Trade professionals and freelance workers can apply the so-called basic global (“blanket”) accounting both to their operational expenditures and to the input tax deduction. This means that portions of the operational expenditures and input taxes are determined by means of a lump-sum rate. This does not have to be documented. Revenues, on the other hand, must always be recorded exactly.
Lump sum for operational expenditures
The prerequisite is that mandatory accounting does not apply (e.g. for a GmbH); that double-entry accounting is also not done voluntarily; that the company’s turnover of the previous year did not amount to more than €220,000; and that the tax return shows that blanket accounting has been made use of.
Please note: A complete statement of revenues and expenditures may be prepared in tandem with this.
Attention: If an entrepreneur subject to mandatory accounting introduces blanket accounting for the first time, a transitional profit/loss must be determined.
The lump sum for operational expenditures amounts to 12% of the net turnover, subject to a maximum of €26,400.
For certain professions, it is 6%, maximum €13,200. This concerns income from commercial or technical consulting (consultant), from asset management; wages and other remunerations from a substantial stake in a joint stock company (e.g. shareholder/managing director with a stake of more than 25%); as well as income from activities as a writer, lecturer, scientist, teacher or educator.
If the activity goes beyond mere consultancy, the lump sum amounts to 12%. This applies, for instance, to the creation of construction plans, conducting of structural analyses, supervision of building works, hourly accounting and window dressing.
Please note: The following in particular are covered by the lump sum for operational expenditures of 12% or 6%, respectively:
depreciation on investments, expenditures for energy procurement, car, rent, repairs, telephone, interest, tools, consumables, insurance policies, advertising, travel expenses, etc. Costs for tax consultancy can be deducted as special expenses.
The lump sum is a net value. With regard to sales tax exemption without credit (e.g. as small business owner), which entails the loss of the right to deduct input tax, the non-deductible sales tax apportionable to the lump sum operational expenses is a cost factor and thus deductible from the income tax in addition to the lump sum.
For reasons of simplification, when an entrepreneur who is exempt from sales tax without credit makes use of basic blanket accounting, the sales tax apportioned to the lump sum of operational expenditures, with the input tax lump sum, can be additionally recorded as an operational expenditure in the amount of 1.8%.
Apart from the lump sum, the following expenditures reduce the profit:
- Goods receipt according to the goods receipt book (merchandise, raw materials, semi-finished goods, auxiliary materials and ingredients)
- Wages, salaries and ancillary wage costs (employer contribution to the statutory social insurance, employer contribution to the family assistance fund, municipal taxes, provisions for severance pay)
- Third-party wages insofar as they enter into the deliveries or services
- Contributions of the entrepreneur to compulsory insurance (health, accident, pension) and contributions to unemployment insurance and mandatory contributions to company pension schemes
- Travel expenses, provided that there is an equivalent cost reimbursement; these travel expenses reduce the basis of assessment for the calculation of the lump sum for operational expenditures.
Operating revenues (turnover) must be consistently registered and recorded in their actual amount.
Transit items, i.e. amounts received and passed on behalf of and for the account of another person, are to be recorded neither as revenues nor as expenditures.
|Actual travel expenses||1.000,-|
|Total operating revenues||201.000,-|
|Goods purchase (net)||- 90.000,-|
|Labour costs||- 40.000,-|
Ancillary wage costs (municipal tax, employer’s share
in health insurance, employer surcharge, employer contribution)
|Third-party wages (net)||- 2.000,-|
|Commercial Social Insurance||- 6.000,-|
|Actual travel expenses||1.000,-|
|12% lump sum for operational expenditures of €200,000||- 24.000,-|
|Total operating expenditures||- 182.200,-|
|Tax-free profits||- 2.444,-|
Approach in the case of gross accounting
If revenues and expenditures are recorded as gross sums (including sales tax), then the sales tax liability is another operational expenditure and a sales tax credit an operational income.
The actual input tax from the “global” operational expenditures can then be deducted, decreasing the profit, if only the lump sum for operational expenditures has been made use of.
If the input tax is also determined on a blanket basis (globally), the lump-sum input tax and the input tax from asset purchases must be recorded additionally as operational expenditures.
In principle, the entrepreneur has the option of recording revenues and expenditures as gross (gross approach) or as net (net approach). In practice, the net approach has largely prevailed.
Attention: If basic global accounting is only used in relation to the input tax, it is mandatory to prepare the statement of revenues and expenditures according to the gross approach.
Comparison of advantages
In order to be able to decide whether basic global accounting or the recording of all operational expenditures is more advantageous, a comparative calculation with the figures of the previous year should be performed.
This has but little effect on recording obligations: The current revenues, sales tax, input tax, goods purchase and wages must be recorded as before. Only the register of assets no longer has to be maintained because the depreciation of fixed assets is covered by the operational expenditures lump sum. It is advisable to continue the register of assets because you might opt for the preparation of a statement of revenues and expenditures at some time in the future.
Every entrepreneur is free to switch back from basic global accounting to the statement of revenues and expenditures. After that, another switch to basic global accounting is possible at the earliest after the expiration of 5 fiscal years.
Please note: The decision whether the operational expenditures lump sum is to be made use of must be taken at the latest upon submission of the tax return. This is done in form E1a by placing a checkmark on the first page and by entering the determined lump-sum operational expenditures under item 9259.
Lump sum for input tax
For businesses whose turnover in the previous year does not exceed €220,000, a lump sum for the input tax of 1.8% of the net turnover (without turnover from auxiliary transactions, e.g. asset sales), a maximum of €3,960 can be made use of.
The other prerequisites for basic global accounting for income tax (no mandatory accounting and no voluntary accounting) do not apply to the consolidation in a lump sum of the input tax. Hence a joint stock company, for example, with accounting obligation can use a lump sum for input tax.
Beside the lump sum, the input tax (acquisition tax, import turnover tax) for the following are taken into account:
- purchase or production of fixed assets that cost more than €1,100 net,
- goods, raw materials, semi-finished goods, auxiliary materials, ingredients,
- third-party wages.
The use of the lump sum for input tax is declared by an informal notification to the fiscal authorities. To this end, the sum of the lump sum input tax must be entered into Item 084 of the annual sales tax return U1. This can be done until the annual sales tax assessment enters into legal force.
The declaration commits the entrepreneur for at least 2 calendar years. It can be revoked only with effect from the beginning of a calendar year. The revocation must be declared in writing to the fiscal authorities before the assessment enters into legal force. Switching back to lump sum input tax is possible at the earliest after the expiration of five calendar years.
Basic global accounting for income tax and sales tax can be opted for independently of one another.
Attention: If basic global accounting is used only in relation to input tax, it is mandatory to prepare the revenues and expenditures statement according to the gross approach.
Alongside the basic global accounting, there are special ordinances in place in terms of the consolidation in lump sums for trade professionals without mandatory accounting as well as for pharmacists, restaurateurs, trade representatives, food retailers and grocers, athletes, artists and writers.
Relation to tax-free profit
If the profit is calculated based on average rates or partial or full lump sums, the basic tax-free amount of the profit can be claimed, but not an investment-based tax-free allowance.
If an investment-based, tax-free amount of profit is to be claimed in addition to the basic tax-free allowance (e.g. with regard to investments in specific fixed assets or the purchase of discounted securities), basic global accounting must be waived and all operational expenditures documented. Please refer to the “Tax-free profit allowance” information leaflet.
This information leaflet is a joint product of all Chambers of Commerce.
Note: Despite careful editing, no responsibility can be taken for the correctness of this information. Any liability of the Austrian Chambers of Commerce is excluded. The terms used for references to persons always apply to both genders!
Status: January 2019.