A construction service is provided on a construction site, so the proof of arrival should be easy to provide. I assume that the client is taxable in Germany and not, in turn, Austrian, because then one could easily go crazy with the whole procedure
Also wrong.
Proofs of arrival are only prerequisites for tax exemption in the country from which the goods are dispatched in the case of
deliveries.
In the case of construction services, it is a
other service.
A construction service by an Austrian contractor on a German construction site is not tax-exempt in Austria at all, but is not subject to tax in Austria. Even though it sounds similar and many confuse the whole thing, this is a huge difference.
§1 (1) No. 1 USTG initially determines what
taxable transactions are.
§ 1 Taxable Transactions
(1) The following transactions are subject to VAT:
1. deliveries and other services that an entrepreneur within the country performs for consideration within the scope of his business.
In contrast to some other paragraphs of §3a USTG, §3a (3) No. 1 USTG does not require certain characteristics of the recipient (domicile domestic or foreign / entrepreneur yes/no) etc. Therefore, the location of the transaction is determined purely by the location of the property.
For taxability in Austria, the "domestic" requirement is missing. The "domestic" is only given within the framework of the German USTG.
Only afterwards is it examined whether the delivery or other service is taxable or exempt.
The construction service is therefore not taxable in Austria, but taxable and subject to tax in Germany.
For comparison:
The delivery of windows from a Polish entrepreneur to a German entrepreneur would be taxable in Poland, but tax-exempt if the proof of arrival is provided by the receiving entrepreneur. In return, the German entrepreneur must pay VAT through the intra-community acquisition according to §1a USTG and if entitled to input tax deduction, also recover it again.
For deliveries from a Polish entrepreneur to German private individuals, certain turnover limits apply (often €30,000/year) determining where it must be taxed. Thus, the windows can be invoiced with Polish VAT if these are individual cases for the Polish entrepreneur. (as written by )
If it happens more frequently and the limit of e.g. €30,000/year is exceeded, the Polish window supplier must register in Germany and show German VAT.
Note: The paragraphs are from the German USTG. Due to the harmonization of VAT laws via the 6th EC Directive, the Austrian USTG is structured quite similarly.