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Austrian Leading Sights calls for VAT reduction beyond 2021

The tourism industry continues to struggle with the consequences of the Corona crisis. Austrian Leading Sights calls for the retention of the VAT rate of 5% as an important prerequisite for overcoming the crisis.

The Corona crisis has left a serious mark on the tourism and leisure industry. The effects of the crisis are still being felt both in the tourism sector and in our partner industry of the gastronomy and hotel industry, for many companies, sales as in 2019 still seem unattainable. To help these industries, the Federal Government has initiated a VAT reduction on food, drinks and overnight stays from 10% to 5% as a support measure. To recover and relieve the economically dramatic situation in the industry, Austrian Leading Sights pleads for the reduced tax rate to be maintained beyond 2021.

Learning from past mistakes for the future

By increasing the tax rate, Austria would fall far behind its German-speaking neighbours. The situation is like that in 2009, when Germany reacted to the consequences of the severe financial and economic crisis with targeted tax relief in the hotel industry with the Growth Acceleration Act. While Germany secured new jobs and recorded record sums, Austria fell behind in the role of passive spectator. Such a wrong decision must not happen again. Otherwise, there is a risk of losing guests, sales and jobs.

The extension of the five percent tax rate, on the other hand, enables Austrian tourism companies and our partners in the gastronomy and hotel industry to remain competitive. In turbulent times of crisis, the reduced tax creates an important basis for steering the industry back on the road to success. For legal reasons, this will require the abolition of the 13 percent tax rate.

Stefan Isser, Managing Director of D. Swarovski Tourism Services GmbH and member of the executive committee of Austrian Leading Sights, is in favour of this reversal in the tax system and emphasizes explicitly: “In order to come out of the crisis stronger, the extension of the VAT reduction to 5% beyond 2021 is urgently needed”.