International tax experts at Ernst & Young have analyzed the local tax code and international tax treaties with Austria to establish the following tax guidelines for RecruitiFi hires within Austria.
AUSTRIA GENERAL CONSIDERATIONS
How does RecruitiFi supply its services to Employers in Austria?
Before diving into the FAQs, let’s clarify the legal tenets underpinning RecruitiFi’s business model:
RecruitiFi’s base of operations: RecruitiFi is a US-based entity with no physical presence beyond American borders.
Distinct legal relationships: In line with the terms and conditions outlined for our business operations in Austria, we establish two separate and exclusive agreements:
A service agreement between RecruitiFi and the Employer, for the supply of services by RecruitiFi to the Employer
A service agreement between RecruitiFi and the Recruiter, for the supply of services by the Recruiter to RecruitiFi
Payment process: The transaction process entails Employers paying RecruitiFi for the services rendered, and subsequently, RecruitiFi paying the Recruiter for its services.
Absence of direct interactions: There are no direct contractual or monetary exchanges between the Employers and Recruiters.
Recruitment procedure: Should an Employer decide to recruit a Candidate via the RecruitiFi platform, the employment process ensues without involvement from RecruitiFi.
Precedence of terms: In cases where an Employer and an Agency have had prior contracts, the terms stipulated by RecruitiFi will supersede these existing contracts for the period of engagement through RecruitiFi.
For more information, see Terms | RecruitiFi.
AUSTRIA CONSIDERATIONS FOR EMPLOYERS
This section of the FAQ applies to Employers in Austria to that acquire services from RecruitiFi.
Will RecruitiFi charge VAT to Employers?
No, RecruitiFi will not charge VAT on its Fees for the services supplied to Employers in Austria, provided that the Employer provided RecruitiFi with its valid VAT number.
RecruitiFi will validate through the VAT Information Exchange System (VIES) that the VAT number belongs to the entity associated with the Employer’s account and that it’s valid.
Legislative reference: Article 44 of the EU VAT directive: EUR-Lex — 02006L0112-20240101 —EN — EUR-Lex (europa.eu)
How can an Employer communicate a VAT number?
To communicate your VAT number to RecruitiFi, please email finance@recruitifi.com.
For the structure of VAT numbers, see: Vies on-the-Web — European Commission (europa.eu).
Who will be responsible for paying VAT on the services provided by RecruitiFi?
If an Employer provided a valid VAT number, the Employer is responsible for paying VAT through the reverse charge mechanism. VAT is self-assessed over the amount paid or payable to RecruitiFi.
RecruitiFi encourages Employers consulting their (indirect) tax advisor to obtain guidance on how to apply the reverse charge mechanism and whether the Employer can recover the self-assessed VAT.
If an Employer does not provide a valid VAT number, RecruitiFi will be responsible for collecting and paying VAT.
Legislative reference: Article 44, Article 58 and 196 of the EU VAT directive: EUR-Lex —02006L0112-20240101 — EN — EUR-Lex (europa.eu)
Why doesn’t RecruitiFi charge VAT on its services if the Employer provided a valid VAT number even when the Candidate and/or Recruiter are in Austria?
If an Employer provides RecruitiFi with a valid VAT number, RecruitiFi will charge no VAT.
RecruitiFi deems its services as Electronic Supplied Services (ESS).
If an Employer does not provide a valid VAT number, RecruitiFi will consider this Employer as non-VAT taxable person and charge VAT and pay this VAT to the tax authorities in Austria through its One Stop Shop registration.
Legislative reference: Article 58 the EU VAT directive: EUR-Lex — 02006L0112-20240101 —EN — EUR-Lex (europa.eu) and Article 18 of EU VAT Implementing Regulation EUR-Lex —02011R0282-20220701 — EN — EUR-Lex (europa.eu)
What if an Employer does not provide a valid VAT number?
If an Employer does not provide a valid VAT number, RecruitiFi will charge VAT.
In accordance with RecruitiFi’s Terms, all fees that are agreed between RecruitiFi and Employers are exclusive of VAT, so RecruitiFi will charge VAT in addition to the Fee payable.
Does anything change depending on where the Recruiter, JobCast and/or Candidate is located?
No, other factors, such as the location of the Recruiter, Candidate and/or JobCast, do not change the VAT treatment as explained above.
The VAT treatment is determined by the nature of RecruitiFi’s services and location of the RecruitiFi as service provider and the Employer as service recipient, the location of Recruiter, Candidate and/or JobCast are not relevant to determine the VAT treatment.
Legislative reference: Article 58 the EU VAT directive: EUR-Lex —02006L0112-20240101 —EN — EUR-Lex (europa.eu) and Article 18 of EU VAT Implementing Regulation EUR-Lex —02011R0282-20220701 — EN — EUR-Lex (europa.eu)
AUSTRIA CONSIDERATIONS FOR RECRUITERS
This section of the FAQ applies to Recruiters in Austria that supply services to RecruitiFi.
Will a Recruiter charge VAT to RecruitiFi?
No, as a Recruiter your agreement is with RecruitiFi. RecruitiFi is a nonresident business entity with no physical presence in Austria.
Services provided by Recruiters in Austria to RecruitiFi are not subject to VAT in Austria.
Legislative reference: Article 44 of the EU VAT directive: EUR-Lex — 02006L0112-20240101 —EN — EUR-Lex (europa.eu)
Why are services from a Recruiter not subject to VAT in Austria?
The services provided to RecruitiFi by Recruiters in Austria are out of scope for VAT on the basis that RecruitiFi qualifies as a VAT taxable person that’s not established in Austria. On this basis, the place of supply is outside Austria.
Legislative reference: Article 44 of the EU VAT directive: EUR-Lex — 02006L0112-20240101 —EN — EUR-Lex (europa.eu)
Does anything change depending on where the Employer, JobCast and/or Candidate is located?
No, other factors, such as the location of the Employer, Candidate and/or JobCast, do not change the VAT treatment as explained above.
However, RecruitiFi recommends consulting your (indirect) tax advisor to confirm that there aren’t any special “use and enjoyment rules” that may be applicable to your services.
Is the service subject to any other taxes?
RecruitiFi will not pay any VAT or other taxes to Recruiters in Austria.
In this regard, the RecruitiFi Terms stipulate that any Agency Placement Fee and other fees payable to Recruiters are inclusive of any VAT and other taxes.
GLOSSARY
Term | Definition |
RecruitiFi | RecruitiFi, Inc. |
JobCast | Job positions to be filled by Candidates that are submitted/suggested by Recruiters to RecruitiFi |
Recruiter | Recruiters and agencies that provides services to RecruitiFi by submitting/suggesting Candidates to fill JobCasts |
Employer | Employers that hire the services from RecruitiFi to receive the suggested Candidates by RecruitiFi to fill their JobCasts |
Employer placement fee and processing fees | Fees paid by employer to RecruitiFi — if certain conditions are met — upon hiring a Candidate |
Agency placement fees | Fees paid by RecruitiFi to Recruiter — if certain conditions are met — upon placement of a Candidate suggested by the Recruiter |
VAT | Value-added tax; please note “VAT” will be understood to include all non-US indirect taxes (e.g., VAT, GST, JCT) |
EU VAT directive | Council Directive 2006/112/EC of 28 November 2006 on the common system of VAT |
EU VAT implementing regulation | Council Implementing Regulation (EU) No 282/2011 of 15 March 2011 laying down implementing measures for Directive 2006/112/EC on the common system of VAT |
5. DISCLAIMER
The information in these frequently asked questions (FAQs) is intended to provide general guidelines regarding the indirect tax treatment of RecruitiFi Inc.’s (“RecruitiFi” or “we”) procurement of Services from Recruiters and supply of Services to Employers in the countries here covered.
The information in these FAQs is provided by Ernst & Young LLP (EY) and is solely provided for the use of RecruitiFi. The information that EY provided to RecruitiFi is to be understood based on a “should” level of advice regardless of any wording (such as “is“ or “will”) referenced in the information provided to RecruitiFi or as reflected in the FAQs.
The FAQs reflect how, in general, i.e., not in specific cases, RecruitiFi believes the local indirect tax rules apply to RecruitiFi’s business model and services supplied by Recruiters to RecruitiFi and services provided by RecruitiFi to Employers.
The FAQs for individual Member States in the European Union (EU) are not based on the individual Member State’s value-added tax (VAT) legislation. Instead, this information is based on VAT rules as included in Council Directive 2006/112/EC of 28 November 2006 on the common system of VAT (the EU VAT directive). As the implementation of the rules in the EU VAT directive into the legislation of an individual Member States may vary country by country and/or the interpretation and corresponding guidance in relation to these rules may also be different between EU Member States, it’s possible that the FAQs for an individual EU Member State may not fully reflect the VAT rules of that EU Member State.
Recruiters, Employers and/or any party other than RecruitiFi cannot, in any form, rely on advice provided by EY to RecruitiFi. Recruiters and Employers are encouraged to consult their own (indirect) tax advisor to confirm the indirect tax treatment as applicable in their specific case as the application and impact of tax laws can vary widely, from case to case, based upon the specific or unique facts involved that are not known to RecruitiFi and/or EY. If your (indirect) tax advisor’s advice does not correspond with the position as outlined in the FAQs, please reach out to RecruitiFi’s tax team.
While RecruitiFi used its best efforts in preparing these FAQs, RecruitiFi makes no representations or warranties with respect to the accuracy or completeness of the content in the FAQs. Neither EY nor RecruitiFi shall be liable for any damages in relation to the information included in the FAQs. Note also that inadvertent errors can occur, and tax rules and regulations often change.
Latest update: January 2025