If you operate as a foreign company conducting construction works in the territory of Austria and if you place your employees in temporary job positions with your Austrian client, your Austrian client will deduct a 20 % withholding tax in invoices.
You may, of course, ask the Austrian tax office for tax refund; however, the processing period at the Austrian tax office may last as long as 9-12 months.
If you want to avoid the given deductions, you should have your employee wages administered according to Austrian regulations and pay the income tax to the Austrian tax office. That will make you eligible to ask the Austrian tax office for exemption from the withholding tax. The exemption is valid for 6 months and it may be renewed repeatedly. Issuance of the exemption and its prolongation are conditioned by timely payment of the income tax for the employees and absence of outstanding payments towards the Austrian tax office.
An Austrian firm will deduct a 20% tax in every invoice if you perform work in Austria through temporary detachment of your employees.
Yes, of course, you may request refund of the withholding tax. However, you should be aware of a rather long processing period, which may last 9-12 months.
